Did you read this article http://www.cnbc.com/id/23372795? It describes how mortgage rates will stay on the higher side even though Federal regulators have eased investment caps on Freddie Mac and Fannie Mae, the biggest providers of mortgage money in the nation. It makes sense that because there is more money available to loan for home loans, that the rates will go down due to this latest influx of cash.
But no! Check this quote out from the article. "In a mortgage market where lack of liquidity has been a recurring issue in recent months, this is a positive step," said Greg McBride, senior financial analyst at Bankrate.com. "But it's unlikely to result in wholesale changes in mortgage rates overnight, and the impact will probably come at a gradual pace."
And does that "impact" mean lower rates? We'll see. All I know is that this is just another crazy chapter in this wild mortgage free for all. We've seen repricing for mortgage rates just about daily and sometimes twice a day. But today, the rates are higher for a 30 year fixed.
"We have a problem, which is that the spreads between the Treasury rates and lending rates are widening, and our policy is essentially in some cases just offsetting the widening of the spreads, which are associated with signs of illiquidity," Federal Reserve Chairman Ben Bernanke said in remarks before the House Financial Services Committee.
I'm not so sure you want your Fed Chairman to start off a sentence with the words "We have a problem". There is a problem. There are many problems. The biggest problem is that no one is sure how to solve the problem.
It's like cooking on a stove with 4 pots burning at the same time. Which one are you going to save?
If you have any comments on this article, I would love to hear what you have to say! Feel free to comment below.
Thanks for reading!
Dan Tenchall
Great Lakes Mortgage Funding
For FREE Mortgage tips, Mortgage Calculators,must have articles and much more please visit my website!
Michigan Mortgage Rates
(586) 532-0600
dan@glmf.com
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