Blog of the Mortgage

Madyalook!!

Hey, it might not happen today but if you think about how Henry Paulson can flush away $700 billion overnight as he just did then, well, this story might just come to fruition.

This administration or next.

Some key points of the article found here: Treasury thinking about 4.5% interest Rates

"The plan, which is in the development stage, would temporarily use the clout of mortgage giants Fannie Mae and Freddie Mac to encourage banks to lend at rates as low as 4.5%, more than a full percentage point lower than prevailing rates for a standard 30-year fixed-rate mortgage."

Okay.. the last time banks were "encouraged" with $700 Billion they paid back bonuses, wages and other crap and bought other banks with the money.

Even today BofA head of state - Ken Lewis was quoted that this would be a good time to hoard cash!

Huh? You took your handout to hoard it? It's no wonder the we're in such a mess.

"But Treasury Secretary Henry Paulson views lowering mortgage rates as key to fixing the housing crisis, which he says is at the root of the widespread economic and financial problems, hence the mortgage-security-buying program announced last week." - WOW! REALLY? Thanks DUUUDE! All of us in the Trenches can award this guy the NSS Plaque of the week (that's No Shit-Sherlock - excuse me here).

"On the refinancing front, the Mortgage Bankers Association said its index of refinance applications had tripled, the largest increase since it began tracking this data in 1990." - Hey, I'm looking around, my business is 90% purchase, yours? Did you get 3 more apps than last week? 300% increase. This doesn't mean much since fully 50-60% of homeowners are underwater in California.

"I don't think it's the answer to the foreclosure problem because that problem is a combination of negative equity with unemployment," said Mark Zandi, chief economist of Moody's Economy.com. "Lower rates aren't going to help those homeowners under water refinance or get a job, at least not quickly."  We know this is the case, we have some 11 months of supply and overall it's an interesting world out there. to say the least.4.5% would help new homeowners most definitely although I'd be happy to not have prices go right back up to unaffordable because of this (it wouldn't happen because too many in the middle have been burned- the once bitten twice shy thing).