Now that the negative ads are off the air and we can return to our normal lives what does the Democratic victory mean for the mortgage industry. Well, there is an interesting article at Bankrate via. Yahoo! that attemts to give some insight.
What do Democrats mean to mortgages?
Homeowners and prospective home buyers will see changes when the Democrats take control of both houses of Congress early in 2007. Democrats have different priorities from Republicans on issues such as affordable housing, land-use restrictions and predatory lending.
The political party that has the most influence over the size of Americans’ monthly mortgage payments didn’t get a single vote. That’s because the Chinese Communist Party wasn’t on the ballot.
Every day, we Americans buy more foreign-made stuff than we peddle to other countries. And every day, we consume more government services than we are willing to pay for via taxes. The cash to pay for these things has to come from somewhere, and in recent years America’s most enthusiastic lender has been China’s central bank. Japan, the United Kingdom, South Korea and “petro-nations” are other big creditors.
These countries lend us money by buying myriad types of bonds: U.S. Treasury notes, mortgage-backed securities and corporate bonds. If investors didn’t want these bonds, yields would have to be high to entice buyers. But the world overflows with investors who want to buy U.S. Treasuries and mortgage-backed securities. With lenders eagerly lining up for the privilege of extending credit, we can pay them low yields. That keeps mortgage rates low, too.
Read full article: http://biz.yahoo.com/brn/061116/20227.html