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January 2009
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Mortgage Interest Rates May Reduced by the Fed Again

The mortgage industry has been awaiting some good news and Michigan homeowners have been waiting out the present state-wide housing slump that could receive a big boost, particularly for those looking to refinance. If you thought mortgage rates couldn’t fall any further,  think again. Some economists expect the Federal Reserve to reduce current mortgage interest rates as low as 3.85 %. That would be truly amazing. I don’t know if mortgage rates have ever been that low,” said Amanda Crews, the housing director at Metro Housing in Flint.

Fed Cuts Rates to Target Range of 0%-0.25%

Watch Roundtable Reaction to the Federal Reserve and Potential Mortgage Rate Cuts.

Currently, conventional home mortgages are being published below 5%. Just a few months back, they were in the low 6% range. A cut below four % could save home owners a ton of cash. “One thousand dollars a year for every point for a $100,000 loan — two points. That would save a borrower $200 a month after refinancing a $100,000 mortgage loan.”

The average rate on 30-year fixed mortgage loans rose last week to 5.12 %, from a record low of 4.96 % a week earlier, according McLean, Virginia-based Freddie Mac. After the Federal Reserve announced plans to buy $500 billion of bad credit home loan security bonds, rates fell from 6.46 % in October, about tripling the pace of home loan applications between the four weeks ended Jan. 16 and Nov. 21, according to the Mortgage Bankers Association. If mortgage lenders introduced even lower rates, they would not be able to handle the resulting surge in applications, Heiden said. “As mortgage interest rates improve, volume increases,” she said.

Lowest Mortgage Rates of All Time?

The current mortgage rates pulse posts interest rates online for conforming, FHA loans, home equity loans and refinancing.  We guarantee the lowest rates and best loans around. The Federal Reserve reduced key rates to the lowest levels of all time.

Get Locked into the Best Mortgage Rates Nationally Guaranteed!  Take advantage of the Feds Giant Rate Cuts.

Treasury Down After Bernanke Says Fed May Buy US Debt

Treasury prices declined Tuesday as yields moved higher, with bond traders playing off Federal Reserve chief Ben Bernanke’s comments restating that the U.S. central bank could buy longer-term Treasury’s to keep loan rates low. Last week, mortgage rates dropped below 5% on thirty year mortgage loans and FHA home loans.

More aid to the banking system would be needed to foster an economic recovery, Bernanke also said in a speech he delivered in London. Two-year note yields (UST2YR) rose 4 basis points to 0.79%. A basis point is one one-hundredth of a percent. Ten-year note yields (UST10Y) were little changed at 2.31%.

The timing and strength of any global recovery remain “highly uncertain,” Bernanke said. The Fed has begun a plan to buy billions of dollars in mortgage-backed securities and debt sold by housing agencies including Fannie Mae (FNM) and Freddie Mac (FRE) to lower mortgage rates and spur growth in the housing market.

So far, the program has been successful in bringing down mortgage interest rates by reducing the gap between Treasury’s is a benchmark for many types of home loans, and yields on mortgage or agencies bonds. Bernanke also said it may expand its program to buy asset-backed securities, which pool borrowings such as car loans and credit-card debt. Also Tuesday, a government report showed the U.S. trade deficit in November plunged to $40.4 billion, reflecting weakening demand for imports as the nation’s economic woes deepened

New York Fed Begins Purchasing Mortgage-Backed Securities

The Federal Reserve Bank of New York today began purchasing fixed-rate mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae. Selected private investment managers are acting as agents of the New York Fed in these purchases. Summary data detailing these operations will be available on the New York Fed’s website beginning Thursday, January 8, 2009, and will be updated on a weekly basis each Thursday.

Get updated home loan guidelines and daily mortgage interest rates online. Many insiders believe that the Fed will continue to keep interest rates low for home purchase and refinancing through 2010, or when the housing markets recover.

This program, first announced on November 25, 2008, is intended to support the mortgage and housing markets and foster improved conditions in financial markets more generally. Read the original financial article>