November 26, 2008 8:42AM
The Fed-Backed Refinance Wave
By Brian Sullivan
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One of the paragraphs in a Wall Street Journal story today says it all:
Rates on 30-year fixed-rate mortgages dropped by roughly half a percentage point to about 5.5%, for borrowers with good credit scores and substantial equity in their homes, say mortgage brokers and lenders.
The Fed’s actions in the mortgage markets should help housing, at least on the refinancing side. This is also likely a fairly temporary move in interest rates given the volume of the Fed buying in the debt markets. Of course, homeowners cannot refinance if they owe more than the house is worth, but for those with real equity it may be worth a call to check on rates.
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The Bailout Bunch
Here`s the story of Ben Bernanke
who took over for Greenspan on his own
there were bad loans and banks were failing
but he was all alone
Here`s the story of a man named Paulson
Who knew the Wall Street problems all too well
they were both screwed and they knew it
so they said what the hell
So then Paulson and Bernanke went to congress
and they knew that it was much more than a hunch
that the three would somehow form a family
that`s the way they all became the bailout bunch
The bailout bunch , the bailout bunch
That`s the way they became the bailout bunch
With Angelo Mozzillo as
Alice
Now, I wish the true maker of this collapse of this economy, Barney Franks could give us working and paying our bills on time a break. I remember back in 2000 I had to give up %20 down payment on my mortgage loan. And go through a credit check. When in the world will these incapable feds give us a bone? I think a 2 percentage point drop would help the economy. People could refinance, reduce their principle and become more liquid with cash. And maybe even buy new cars from the newly government supported automakers, we all know they will get the money. After all, some of the Obama voters were UAW members.
The officials who were elected owe this to UAW. I am a conservative, but I really know the UAW and they put much money and voter arm twisting into getting Obama elected.
Show them the money-you go $71.00 an hour.
Hope this spurs purchases at not just refies. The Atlanta housing market as well as most others could use the stimulus that reduced mortgage rate can supply.
Rick
I agree! 4% mortgages would be better than any other solution thrown at the wall so far. The Tax Cut that keeps on giving. It would start the whole economy rolling. Free cash in our pockets (refi’s), it would take housing inventory off the market, once this started to roll you couldn’t stop it.
And it would happen fast (as fast as the refi’s could be done) also the the positive attitude/energy created would be infectious.
The goverment has the ability to lower rates at anytime on VA and FHA loans as they are not connected to any index. To get money moving again in this country the goverment should lower the mortgage rates on these kinds of loans.That would be a true grassroots stimulus of the economy and leave more money in the middle class homeowners pockets.It would also give these folks if they took some money out of their equity the money to pay down higher interest debt. Rick Kedzierski Mortgage Broker Tampa, Fl.