The FASTER they raise rates, the FASTER the economy slows down, to include loan origination. If anything, they were too SLOW to raise rates. They didn't raise rates to cause problems in the mortgage industry - they raised them to head off the rising prospect of inflation, which looked like it was becoming a problem earlier this year. It's still a concern, and you're not likely to see any cuts soon...especially with the dollar's worth being counted in matches. Don't blame the Fed. Blame idiots who agreed to debts they had no hope of repaying and unethical mortgage brokers who qualified anyone and everyone simply to earn a commission. The current situation is bad, but it is grotesquely overblown in the media. If you closely analyze some of the bizarre statements you hear and read, you will note that there's a political aspect to the current situation. Democrats would love nothing more than the economy being totally in the crapper when November rolls around. I certainly can't explain why, but many of those millionaire New York bankers at GS, MS, LEH, etc are left-wing liberal nutjobs who are forsaking their economic ethics to advance their political goals.