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Pasadena Mortgage Rates Report: September 19, 2008

Pasadena Mortgage Rates Report: September 19, 2008

by Brian Brady

Hold off on that Pasadena mortgage rate lockThe government is here to help.

 

I initially thought this massive government purchase of defaulted mortgage proposal would lead to higher mortgage rates, but quickly reversed course.  Here’s me today, on Zillow Mortgage Blog:

This action is an obvious attempt to stabilize the volatile mortgage market.  His rationale is that this plan (a massive MBS purchase) will cost the taxpayers a lot less than the alternative. Whether or not that’s true remains to be seen.  He specifically references the “spread” or yield difference between treasury notes and mortgage-backed securities.  If the US Treasury is going to buy mortgage-backed securities to narrow that spread, rates will drop in the near term.

I think we’ll see conforming 30-year fixed rates work down to 5.75% or below, next week.  Stay tuned.

 

Originally posted on Millionaire Real Estate Lender

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Posted on September 20th, 2008
Posted by: Irina Netchaev

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