Photo by Joaquín Martínez.

Buyers from across the nation are enjoying the lowest mortgage interest rates ever.  Unfortunately the 4.09 percent interest for a 30-year loan has done little to boost home sales, according to MSNBC.com.  In fact, this has been the worst year for home sales since 1997.

Many Americans are in no position to buy or refinance. High unemployment, scant wage gains and large debt loads have kept them away.

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Others can’t qualify. Banks are insisting on higher credit scores and 20 percent down payments for first-time buyers. Some homeowners have too little equity invested in their homes to meet loan requirements.

Most people must also pay extra fees to get the low mortgage rates. Those fees are known as points, with one point equaling 1 percent of the total loan amount.

If more people could refinance, it would be an economic boost for America.  However, it seems to be a waiting game for the return of consumer confidence.

For the sixth week in a row, mortgage rates have dropped.  Now at 4.35 percent, this is the lowest rate Bankrate has recorded in the last 26 years.  According to the site,

One year ago, the mortgage index was 4.58 percent; four weeks ago, it was 4.46 percent.  The benchmark 15-year fixed-rate mortgage remained the same, after dropping 15 basis points last week.

While some predict that rates will not go lower, other observers believe the suffering job market may cause them to drop further.

In a conversation several days ago, one friend described how she was told to cheat in order to be approved for a mortgage loan when she bought her house.  She felt very uncomfortable following her lender’s instructions on the “declared income” loan she acquired.   Another friend said, “I can beat that!”  In detail she described how her real estate agent FILLED OUT a new FALSIFIED tax return and said, “These never get audited.”

As a Realtor, I was horrified and appalled to hear that this agent – who was very well known in my local area – actually FILLED OUT a fake tax return herself!  She went on to call the lender who was her best friend and asked for instructions on certain parts!

This is why it is now so hard to find a mortgage.  There were not enough checks and balances in place to stop this kind of fraud.  And there were lenders who blindly turned their eye from the criminal activity.

Now the party is over and it is time to pay the band.  The U.S. government through Fannie Mae and Freddie Mac is set to sue some of the big banks over their negligence in not performing due diligence in the home loans they packaged to the Feds.  According to MSNBC.com,

The suits will argue the banks, which assembled the mortgages and marketed them as securities to investors, failed to perform the due diligence required under securities law and missed evidence that borrowers’ incomes were inflated or falsified. When many borrowers were unable to pay their mortgages, the securities backed by the mortgages quickly lost value.

Fannie and Freddie lost more than $30 billion, in part as a result of the deals, losses that were borne mostly by taxpayers.

If *I* have heard so readily about cases of falsified mortgages, then there is no excuse for the banks to have allowed them to go through without question.  Sad how these crooks have helped bring the U.S. economy to its knees.