Yes, it's all About Oil – and Downpayments

Mortgage lenders and servicers should've been drinking champagne this morning. The national unemployment rate fell below 9% which means (in theory) that fewer mortgagors will default on their loans, and a whole new crop of employed citizens might feel good enough to buy a home this spring.  But if only it were that simple. Over the past two years there has been an unprecedented tightening of mortgage underwriting standards, leaving thousands (if not hundreds of thousands) of applicants on the sidelines – especially the self-employed. And just a few days ago, Freddie Mac told its seller/servicers that borrowers now need 5% down, otherwise they can go visit Uncle Dave over at FHA. And then there's oil. This morning West Texas Crude was at $103 and not only are there major concerns about Libya's oil fields but come March 11 the good citizens of Saudi Arabia are expected to hold a 'rally' in that oil rich nation. Where am I going with this? Answer: As oil goes, so goes inflation. If the price of doing business in America rises, firms that have been hiring new workers might turn off the spigot. As for state and local workers, everything we see in the news today suggests that the job security they've enjoyed is quickly becoming a thing of the past.