Interest Rates And Obama’s Refinance
Rates have continued to increase. This morning mortgage-backed securities are trading in positive territory. As we already know higher interest rates could cause a problem with the recovery. “Rising interest rates threaten to dim prospects for a housing recovery and choke off a refinance wave that was a major plank of the Obama administration’s economic-stimulus efforts.”
I do believe we are going to see rates improve over the next few weeks especially with the Fed meeting on the 23rd and 24th. Hopefully they comment on their buying of bonds. The article below makes a great point about how bonds are selling off as though they are risky investments. They aren’t. They are bonds.
Enough negative talk. This could be great news if it really happens and there aren’t huge costs involved on the higher loan to values. “A Treasury Department official said the administration is considering a range of tweaks to the program, including extending the program to borrowers with loan-to-value ratios as high as 125%. Freddie Mac on Friday announced changes designed to make its program easier to use.”