Since the feds put Freddie and Fannie into receivership federal rates have gone down, but not necessarily mortgage rates. “Investors have kept the rates up because they need to offset the losses they are taking on the foreclosures,” said Bill May of Accent Mortgage.

“At this point the bill that President Bush signed to theoretically help the people that have gotten into these loans and so forth, it does not do really do much for them,” said May. “If a customer has had a late payment, and when I say late payment I mean late 30 days or more in the past 12 months, these people are pretty much not going to be able to refinance.”

The former president of the Alabama Mortgage Brokers Association says the state needs a law which covers mortgage bankers as well as mortgage brokers.

“Right now if you deal with a company that is not a mortgage broker but a mortgage banker the state can’t help you and if you check with the state banking department they will tell you that 90% of every claim they’ve ever received is from a HUD approved lender that cannot be audited,” said May.

While Alabama has not been devastated with foreclosures as badly as other states, May said this is the worst housing market he has ever seen. “Back 2-3 years ago we were closing 75% more loans than we are today, but the people that are hard workers are staying in the business and they’re making it. It’s just tight. It’s harder to get business.” “If you sell your house for 200,000 dollars and go buy one for 200,000 you’re going to have trouble getting one as good as you’ve got. It’s that simple.”

Homewood resident Barry Staples is one of the few satisfied sellers in a neighborhood where many frustrated homeowners have taken for sale signs out of their yards to wait until the buyer’s market is over.

“It wasn’t painful at all we sold it in about..We were under contract about a week after we put it on the market. We came off of our listing price during the negotiation process but not more than we wanted to. I think we got fairly close to what we were happy with. The house almost directly across the street sold in I think less than a week to 10 days as well,” said Barry Staples.

Despite all the chaos Bill May said interest rates are low and it might be a good time for homeowners with good credit and no late payments to consider refinancing their mortgage.

But this month marks the end of an era for many first time buyers who will no longer be able to get 100% financing for a down payment. Beginning in October buyers will need 3.5% of the sale price on hand to qualify for a mortgage.

At the median price of a Birmingham home $150,000, that adds up to $5,250 on top of any closing costs required by the contract. If those average $2,500 new buyers would be looking at nearly $8,000 out of pocket before they could get financing.

“And that’s where the real problem comes in. Young people will start having a real problem coming in with those funds and they can’t be borrowed funds,” said Bill May.

All things considered, the veteran mortgage broker said the government made the right move by fixing a crack in the very foundation of the housing market earlier this week.

“If they allowed Fannie Mae and Freddie Mac to collapse our whole economy would have collapsed,” said Bill May.