Well when Federal Reserve Chief Bernake took his first swing it was a big one. As previously written a .50% rate cut was not the consensus of the Fed watchers. Now we have the cut and we have to see how the markets react. Initially the Dow took off, but the bonds were slow to follow. At this time the mortgage backed securities are up 13/32 on the day which is just shy of .5% in our pricing, not quite the equivalent of .125% to the consumer. Should make 6.25% a hard number for tomorrow, but the question will be what about the day after and the day after that. Too many people are trying to guess what the next move will be.
Here is a link to the comments from the Fed Meeting today; http://www.marketwatch.com/News/Story/text-fomc-statement/story.aspx?guid=%7B7BCD1FBF%2D03D6%2D4008%2D9F48%2D430A2BD55C6C%7D
Will this decision help the homebuyers; in all probability this move will not make a difference. It is the next move and the next move that will drive mortgage rates to a level where buyers can afford more house again and we can help eliminate the credit debt that is piling up. If we start refinancing people again to get them out of the mess that they have created, will they have learned their lesson or will they pile the debt back on?
A follow up to last weeks post about the FHA Secure Mortgage. We now have one investor who has stepped up and will purchase these loans. As I listened to a conference call last Wednesday hosted by HUD, many companies across the nation where complaining that no investors were purchasing the loans. HUD had a presentation on Wall Street on Thursday to the top companies. Hopefully more will get into the game on this loan. This is the loan that will help all those people who were put into 2 year adjustable rate mortgages by the dark side figure out a way to hold onto their houses.
For more information on the FHA Secure Mortgage or any other mortgage information contact
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