TAG | conventional loan
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Federal Reserve: It’s Time the Market Stands on its Own
Comments | Posted by admin in Uncategorized
According to Pedro Nicolaci da Costa and Reuters News, April 1 will be the first day that the Federal Reserve will end its debt purchase program and allow the struggling U.S. mortgage market to operate unassisted. As a result, the Fed believes mortgage rates will rise about three-quarters of a percent to about 6 percent, Boston Fed President Eric Rosengren said Saturday.
Fear of a worldwide perception that the U.S. government is simply printing money to use to purchase mortgage-related securities is a big reason the Fed has pulled back, analysts say. If that fear caused a sell-off of U.S. government bonds, it would push borrowing costs substantially higher and derail the economic recovery.
“We are still in uncharted waters,” Fed Vice Chairman Donald Kohn said in an unrelated speech Saturday. “We will need to be flexible and adjust as we gain experience.”
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Regional Fed Chief Says MBS Purchase Program Should End in March
Comments | Posted by admin in Uncategorized
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said the central bank should end its purchases of mortgage debt as planned in March. This program has been instrumental in keeping home loan interest rates at or near the record lows of the last year.
U.S. FED bankers have debated whether increasing and extending asset purchases should the economy weaken, with a few favoring the move and one seeking a reduction in their Dec. 15-16 meeting. They pledged to complete $1.25 trillion in purchases of mortgage securities and $175 billion of agency debt by March. Read More
After housing and mortgage loan applications were up for 5 straight months, it appears that there may be a double dip forming in the housing market. Home Buyers have benefited from the record low interest rates, courtesy of the Federal Reserve’s MBS buying program and the $8000 tax credit. Both programs are set to expire in a few months, leaving the housing market to stand on its own. Read More
The trend of rising interest rates appears to be gaining momentum. According to a recent Washington Post Article, Freddie Mac sees rates hitting 6% or above in the next year. If you are considering purchasing or refinancing a home and you are on the fence about your interest rate offer, it looks like the time to act is now. With rising rates, waiting to obtain a home mortgage loan could prove to be costly.
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Mortgage Rates moving higher in the near future
Comments | Posted by admin in Uncategorized
The U.S. federal government is slowly extracting itself from the MBS market for home loans, closing out several emergency measures put into place in the throes of distress last year to prevent a collapse of mortgage finance.
According to a recent WSJ online article, The Federal Reserve’s $1.25 trillion program to purchase mortgage-backed securities, considered the most critical support, will draw to a close in the first quarter of 2010. Fannie Mae, Freddie Mac and Ginnie Mae will then be without a government buyer of last resort for their home loans for the first time since the mid-1990s and will have to rely solely on private investors.
Simply put, this means that interest rates can not remain at their present levels for much longer. If you are on still on the fence about a refinance or home purchase, the time to move is now. Learn more about Home Mortgage Loans, FHA Loans, USDA Loans, VA Loans and Jumbo Loans and Conventional Loans at www.loans-101.com.
