Mortgage Girl

The Treasury, Fed and FDIC really seem to be pushing the right buttons. The last bit of news that the Fed introduced this week that it would look hard at actually buying the toxic stuff- MBS's if it needed to, is a great shot in the arm for mortgage rates.

What we've experienced in the last eight months is a confidence crisis with mortgage backed securities. The secondary market that sells these investment products, after they are packaged, hasn't been able to offload them onto the investment markets at reasonable rates. The investors- ie pension funds, sovereign funds, hedgefunds, etc just didn't want them unless the return was substantially higher than pervious periods. The risk spread was/is much higher than the norm. In turn obviously the increase return needed to offload the MBS's translated to increased cost for the consumer.

My team is predicting that rates will start easing quickly into the fives today. Looking at current yields in other financial products, the fives are not a big surprize.

Whether your buying, selling or refinancing Fed efforts to stablize the markets that buy mortgage investment products is solidly good news. Check in with us for current rates.