Ilan Awerbuch:         Hello and welcome to Mortgage Watch for Friday, January 9, 2009. I am Ilan Awerbuch with UniTrust Mortgage in San Diego.  I wish you all a Happy New Year. With the New Year, and new administration there is going to be some great changes coming. We know that we're definitely struggling in our United States economy as are most countries around the world, but I think we're going to have a very, very strong and effective program put forth by the new administration and it's going to try to take charge right away.

We have a lot of obstacles to overcome and a lot of difficulties, but one thing that I keep stressing to people is that the United States is the largest, most developed, broad ranging economy in the world. We basically dwarf the next sized economies behind us. Japan which is number two, is one-third the size of the US economy, and it basically goes down from there.

So the world is looking to us for changes, for leadership, and for a way out of the recession that we're seeing. In terms of where we are for you - an individual, a homeowner, or a business owner, I feel comfortable in saying that the administration is going to be working very, very hard to bring interest rates down.

One way to get the economy going is to spur refinances and also purchases of entry-level and other step-up kinds of real estate. It's important to note that in many parts of the country, entry-level homes have bounced off their lows and are starting to see definite buyer interest.

This may not be true in areas that have an over-abundance of over-built condos like Miami Beach, Phoenix and Downtown San Diego, but in most other areas, there is definitely good solid buyer action. The plan is to spur more of that action by lowering interest rates. A recent study showed that if interest rates were down around 4% for buyers, it would motivate most of the potential, eligible, and qualified buyers to step forth and buy now.

At that rate, it would make owning cheaper than renting before even taking into account the tax benefits of owning. So we look for that to happen over the coming months. Interest rates right now should be for 30 year fixed rate loan at par meaning no points somewhere around four-and-a-half or a little bit less percent, but we don't have that yet.

Part of it is investor reluctance to buy the large blocks of treasuries and mortgage-backed securities. Actually, investors are buying treasuries but not mortgage-backed securities. What we're looking for is for the Federal Government to step in through Fannie Mae and Freddie Mac and buy large blocks of mortgage-backed securities on full doc  already made mortgages and spur the economy and spur the market that way.

So we urge you and encourage you to get a hold of your lender. You can contact us at unitrustmortgage.com. If you go to our website, there is an email there to reach us. You can also phone us, for those of you who need our phone number, it is on our website,(858) 404-7300, extension 120 is our Customer Service Center and lets get started.

A lot of times during Refi waves, there is definitely a large group of people who wait way too late before they start their activity. Last time in 2003 and 2004, fully 20% or 25% of eligible homeowners did not take advantage of refinance opportunities. This time around, it probably will be a little bit different because so many people are desperate or really need some kind of boost financially.

So we urge you get started early, don't wait until the wave is in full swing. If you watch surfers get on top of their boards to ride a wave, they don't wait till the wave has crashed or is breaking or anything else, they are out there paddling hard as the wave starts to pick up its head and that's what we urge you to do, get started early and look at the possibilities. It would definitely be a benefit to a very, very large group of homeowners and potential buyers and we're looking for rates to be in the mid fours, come spring time.

The second part of our Mortgage Watch answers the question, should Bernard Madoff be in jail? And a lot of people are saying no, he doesn't pose a flight risk. He isn't a threat to the community. I'd like to disagree. I think the danger and the outcome of the scam that he has been pulling for 20 years is so large and so great that he should be imprisoned.

After all, if someone committed any kind of crime that damaged any number of people, they’d be behind bars and they would have a bail set so high that they probably couldn't make it. The inference in our country has been that a white collar crime doesn't really damage people in a physical way and therefore the people who perpetrated this crime shouldn't really be put behind bars until they're actually sentenced, I disagree.

The enormity of his crime and the scale of pain that he has caused, rivals many, many parts of the sub-prime boom and the sub-prime bust that we're looking at. $50 billion is a lot of money to lose and to basically take, swindle, and con people out of.

It's shown that even in the last weeks of his operation, he was trying desperately to raise money and in one case, actually raised $250 million from a friend of his, and an early sponsor and someone who worked with him in raising funds for his operation.

That's someone who is a very, very devious person. It basically also came out this past week that he was caught trying to mail jewelry and valuables to family members. Now, that might have been an act of nostalgia from a man and a woman, his wife who rightfully see that they are going to be facing years of trials and probably spend the rest of their life behind bars, but it is still no excuse.

You really can't send off a million dollars of jewelry when you've been ordered by the court to not touch any of your possessions. Now, it's also come out that you sent about $170 million, this is before his arrest, to a subsidiary in London and they are trying to track that money down.

But really, we have to send the strong message that people who perpetrate crimes like that are going to be dealt with like common criminals. Just because it's white collar and paper crime, it doesn't make it okay, it doesn't entitle someone to live in $5 million penthouse all through their trial and everything else, as they go through this I think at least until this case takes its early stages and there are indictments that he should definitely be behind bars where he belongs.

Well, that's Mortgage Watch for this week. I’m Ilan Awerbuch with UniTrust Mortgage in San Diego, California. Again, you can reach us at our website unitrustmortgage.com and as always, we welcome your comments, questions, and feedbacks. Remember to get started on your refinance as soon as possible and remember the feds are sending a strong message that crime doesn't pay, even white collar crime.

Thanks very much and take care. We wish you a happy, safe, and productive week, and look forward to being in touch with you again next week at Mortgage Watch.

Total Duration: 08 Minutes.