This morning I saw a interesting status update on Facebook, by the ever opinionated and knowledgable Brian Brady.
Here are snippets from various sources:
- Coming out of the two day policy meeting, the Fed is purchasing an additional $750 agency mortgage backed securities + $100 billion more for mortgage debt to help spur private credit markets. Business Week
- This caused a rally in bonds and mortgage backed securities which SHOULD cause lenders to reprice. Lew Corcoran, Trulia Voices
- But…it’s not happening (see Facebook dialogue above) because….lenders are keeping the spread? Because markets will revolt against inflationary policies? Because…
What do you think? What will happen and why? We’d love to hear your opinion.
Popularity: 4% [?]
`
March 19th, 2009 at 3:48 pm
I wish that all mortgage loan officers would understand how the rates are set.
Rates have already moved yesterday. Actually, rates are going higher this afternoon!
When the Fed makes a move or a piece of news comes out, the market (and the rates) change.
Don’t wait, get a good rate because if rates go to 3%, your house will be worth less than your mortgage balance and you will not be able to refi!
March 23rd, 2009 at 3:59 pm
Banks are keeping the spread, but not to make more money or take advantage of consumers and brokers. Banks have lost so much money in the past few months as a result of rates fluctuating and borrowers moving locked files to another lender. So, they need to make their money back from that problem. Plus, banks are understaffed and need to keep rates slightly higher just to control volume a little.