It was a record-setting week all around, which adds up to good news for mortgage shoppers:

• The Federal Reserve lowered the Fed funds rate to a range of 0% to 0.25%
• It was announced that the Consumer Price Index fell by a record 1.7% in November
• Oil plunged to below $40 a barrel
• 30-year mortgage rates fell to 5.19%, the lowest level on record

While economic weakness is enough to give some home buyers pause, it is important to remember this same economic weakness is creating the extraordinary buying opportunity.

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An April 13^th article from the San Francisco Chronicle stated that it will be more costly than ever to walk away from a mortgage just because the investment didn’t pan out. New guidelines bar lenders from making Fannie Mae loans to applicants who went through foreclosure within 5 years unless they can prove extenuating circumstances. And even after 5 years the borrowers will have to come up with at least 10 percent down and have gotten their credit scores back up to at least 680. Rival mortgage clearing house Freddie Mac indicated that it is going after walk-away borrowers in court to collect deficiencies (the difference between what a borrower owes and what the lender gets in a foreclosure sale). Fannie and Freddie’s actions should be far-reaching — 76% of all new mortgages are bought by the giants and must therefore meet their guidelines. These actions should be welcomed by taxpayers and homeowners alike — very few neighborhoods haven’t felt the blight of a foreclosure and the resulting hit to the adjacent property values, and making those truly responsible face their consequences should lighten the burden for everyone else.