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A look at how mortgage rates are set.

As a result investors, rather than mortgage brokers and bankers, are in control of the rates. When economic news suggests the economy is heating up, investors demand higher yields from the lenders. This happens because they don’t want to buy low yield bonds now, in case the Fed raises rates to cool the economy, which would mean they will make higher yield bonds later. The only way that lenders can get their loans sold in this situation is to raise the yields they offer investors. In turn, this drives the rates higher for consumers.

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Read more from this blogger: How Lender’s Set Mortgage Rates

Still can't tell whether the bubble is popping, but OFHEO says housing prices are declining.

New evidence of a housing market slowdown emerged Tuesday - growth in the price of a single family home was just 1.17 percent in the second quarter, a decline of more than one percentage point from the prior quarter when prices grew 2.20 percent.

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Read more from this blogger: Sharp home price pullback

Click for the historical chart of housing prices.

Atrios has a chart of housing prices going back to 1890. The values are all adjusted for inflation, of course. Take a look, and then tell me: do you think the housing boom of recent years is likely to continue?

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Read more from this blogger: Yikes! Spikes!

Mortgage insurance is just one of the costs built into reverse mortgages.

All loans have fees associated with them. There are home appraisals, paperwork fees, mortgage insurance fees, and additional “points” added to the cost of the loan. In general, the costs of taking out a reverse mortgage are higher than those associated with a traditional mortgage. There are several reasons for this, including the fact that the time period for receiving repayment of the loan is indefinite, typically depending on how long the borrower lives. This uncertainty is added into the loan in the form of additional fees.

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Read more from this blogger: Reverse Mortgage – Be Sure You Need It Before Applying For One

Do mortgage brokers take your legs when they sell ARMs?

That would be the hedge funds, who making huge profits gouging the unwary with option Adjustable Rate Mortgages (ARM). Business Week details the slippery accounting practices, greedy hedge funds, unscrupulous mortgage brokers and banks - as well as how some homeowners will soon find their itty bitty mortgage payment just got way more costly. Some, unquestionably, will lose their homes.

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Read more from this blogger: Pack of vultures