The mortgage and energy industries have delivered a one-two punch.  Fortunately, it will have a positive impact.  Oil prices and interest rates have dipped, providing a source of debt relief for people looking for a mortgage refinance.  

The government's bold step of assuming control of both Fannie Mae and Freddie Mac has helped stabilize the shaky mortgage market, and spurred a slight drop in interest rates.  This is great news for homeowners in desperate need of debt relief.  

Energy prices have also taken a turn for the better:  Oil has dropped closer to the $100 per barrel mark, down nearly 30 percent from its mid-summer high.  Lower oil prices, coupled with the drop in interest rates and the newfound presence of the Federal Government, are both positive signs.  But our economy isn't out of the woods yet.

Crisis of confidence

Perhaps the most difficult hurdle to overcome is a lack of consumer confidence in the economy.  More than any other economic system in the world, America relies on people spending money and feeling confident about the future.  Generally, a consumer will exhibit an optimistic outlook if one of three trends is taking place:  his job is secure, his investments are doing well, or home values are rising.

At the moment, despite the best efforts of the Federal Government, none of these events is occurring.  Housing values continue to slide.  Wall Street has experienced titanic downturns.  Unemployment is reaching 6 percent, and there's no telling what the future holds, as companies begin to tighten their belts even further.

Back to basics

While the Federal Government's work with interest rates, coupled with lower oil prices, has helped quell inflation, there's little doubt that we're suffering from a market correction.  The most likely outcome of all this is that banks will learn their lessons, and those dalliances with subprime mortgages will become a black mark in their history, coupled with red ink on their balance sheets.  Lenders are already raising the amount of they require on down payments for a house or a mortgage refinance.  They're getting back to basics, and hopefully, this more prudent approach will help avoid these types of economic disasters in the future.

Seeking interim debt relief

What do all those macro-events mean for you, the average consumer?  Just as the overall market is getting back to basics and becoming attentive to its bottom line, you'll need to do the same.  Frivolous spending and poor money management skills could bring ruin to you and your family if you're not careful.  With credit so tight, you can no longer count on a mortgage refinance in today's economy.  It's time to budget and watch your finances like never before.

Lower interest rates and energy prices are a welcome sight for battered consumers.  They shouldn't be misinterpreted, though, as a sign that the good old days of easy credit are back.  Times are still tough.  The sooner consumers adapt to the new economic climate, the better their chances of survival.