Mortgage Backed Securities reacted negatively to the days new of socialism, by giving up 19bp (30 YR 4.5% FNMA).  Lenders released a mid day price increase which hit both FHA and confirming mortgage rates.  Once the Subsidy chatter hit the wires, the DOW recouped its losses, while MBS gave up there gains.

The plan to subsides the Housing market has been backed by both Fannie and Freddie.  This plan is essentially a Loan Modification, from the earliest outlines.  Audios crooked Loan Mod firms!

On a negative note, all the borrowers still sitting on the fence who thought the GOV would bring rates down to the low 4%, SORRY!
“Officials weighed, but have shelved for now, another plan that would have the government stand behind low-cost mortgages of between 4.0 percent and 4.5 percent, the sources said. (Patrick Rucker, 2009)”
It always made be sit back and scratch my head when a qualified borrower who could qualify for 30 YR FIX 4.625% mortgage rate, would tell me “I am going to wait for the Government to lower rates to the low 4s”.   My first thought was, if the GOV lowered the rate or subsides the rate, there would most assuredly be strings attached.  Nothing is free, as the saying goes “NO SUCH THING AS A FREE LUNCH”. Not to fret that 4.625% mortgage rate is now only 4.75%, don’t miss this Bus.

The FEDs MBS dedicated purchase plan (Agency Mortgage-Backed Securities Purchase Program) has now reached $114.96B, the FED snatched up $23.220B this week. Only $385.04B and 4.5 months to go.  Obama era rates meet Carter era rates.  No worries right Carter gave us Paul Volcker and Obama has in the ranks.
“We should be fine RIGHT?”

[where: 98109] [where: 85012]

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