The Loan Source

The Greek-American and Our Mortgage Markets

Tue, 22 Jun 2010 16:18:06 GMT

As a Greek-American I have being watching the financial crisis and the upheaval it is creating in Greece with what I think is a different perspective than many other Americans. I want to share a perspective on what another Greek-American is dealing with and how his actions affect our mortgage market.

In the 1960’s a Greek economist named Andreas Papandreou was teaching economics at UC Berkeley. His American-born wife wanted to spend some time in her native country, and Andreas had the chance to be a visiting professor at Cal for several years.

The family lived in the Berkeley Hills, and their son, Georgie, played baseball with his neighbors, joined the Cub Scouts, and went to Cragmont Elementary School, one of Berkeley’s public schools.

He was a typical ten year old, carefree, living the life of an American boy, much like Tom Sawyer and every other kid.

Where is he today?

Today, he goes by George rather than Georgie, and today he has the worst job in the world: He’s the Prime Minister of Greece. He’s often referred to in the press as The Beleaguered George Papandreou.

What’s going on over there, and why is it making the front pages with scary headlines?

Essentially, Greece ran huge deficits and is close to national bankruptcy. Like all governments, it finances itself partly by selling bonds, but their financial house is in such disorder that they might not be able to sell new bonds or refinance old ones.

Like individuals that accumulate too much debt, the Greek government is cutting expenses, but government workers are unhappy seeing their wages cut. A general strike shut down Greek airports, tourist sites and public services and some 50,000 demonstrators marched against the planned public spending cuts and tax rises. You’ve seen the violence on TV.

Because Greece is part of the Europeans Union (EU), people are deeply concerned that their problems will spread to the rest of Europe. The global markets are very scared, and when this happens, nervous investors turn to the strongest currencies and deepest markets in what is referred to as a Flight to Quality.

This has meant global investors moving their money to the dollar, and in buying up U.S. Treasuries as a safe haven, bond prices have risen and rates have dropped.

What happens to Treasury bond rates almost immediately happens to mortgage rates, and you’ve already noticed how mortgage rates have dropped pretty significantly of late.

I don’t know if Greece will be kicked out of the EU or if they’ll solve their fiscal woes.

I do know that as long as there’s financial turmoil around the world, in Greece or elsewhere, people will turn to the U.S.

This should big a great summer selling season!

Rick Soukoulis

Sylvia Nanez

Tue, 27 Apr 2010 00:24:50 GMT

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The Loan Source

The Greek-American and Our Mortgage Markets

Sylvia Nanez

Terri Bertrand

Mortgage That Matters - vol 4 2010

IT’S AMERICA’S TIME TO SHINE

The other countries having hard times are Portugal, Italy and Spain, and when you add Greece, the initials for Portugal, Italy, Greece and Spain spell out PIGS. You may have seen this term in the news.

Why do we point this out? Why is this at all relevant to selling homes and getting mortgages for homebuyers?

The reason we find this relevant and interesting is that the PIGS countries are just starting to sink into their economic problems. They’re going through now what we went through two years ago.

They’re just starting to grapple with their problems, and we’re starting to come out of our recession.

Two years ago a lot of Americans thought the world was coming to an end. Washington Mutual, Bear Stearns, Lehman Brothers and Indy Mac all failed, and AIG, General Motors, and our biggest banks had to get emergency financing from our government.

Serious people on the news and in the newspapers would ask if the Bank of America would fail, and when questions like this can be part of our national dialogue, you know people are scared.

Things are different now.

We’re hearing more and more from Realtors that prices have bottomed out, and multiple bids seem to be coming back.

Things could obviously be better, but when we look at the PIGS and their problems, we are reminded of how much better things are here.

We certainly had our share of serious economic problems, but we’ve controlled some of them and are working our way through the rest.

The economy is going to be just fine.

Thank you -

Rick Soukoulis

Chairman and CEO

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