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News: Interest Rates Low Even as Fed Pulls Back
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Interest Rates Low Even as Fed Pulls Back
Author: Bendix Anderson, AOL News
Date: March 15 de 2010
Average interest rates for home loans are expected to rise close to 6 percent by the end of 2010, as the federal stops spending trillions to prop up the mortgage market.
Average interest rates for home loans are expected to rise close to 6 percent by the end of 2010, as the federal stops spending trillions to prop up the mortgage market. It's like taking a crutch away from someone healing from a broken leg: Even if this person is on the mend, you'd expect him to wobble a little.
However, so far the mortgage market remains unmoved. Borrowers can still get long-term, rock-bottom low interest rates below 5 percent. What's going on?
Mortgage companies usually raise the money they need to make new home loans by selling bonds to investors. But during financial crisis, the bond market collapsed and the federal government took over, becoming one of the biggest buyers of these bonds, called mortgage-backed securities.
Now, in a huge shift for the mortgage industry, the federal government is stepping back. This month, the massive federal program to buy mortgage-backed bonds is finally running out of money to buy new bonds. One piece of the program, run by the Treasury, stopped buying mortgage-backed securities at the end of last year. And this March, the Federal Reserve will wind down another piece of the program that bought up $1.25 trillion in Fannie Mae and Freddie Mac mortgage-backed securities, according to coverage in Mortgage News Daily.
Average interest rates for 30-year, fixed rate mortgages slid back down to 4.95 percent in the week ending March 11, plus an average origination fee of 0.7 percent of the mortgage amount, according to Freddie Mac's Primary Mortgage Market Survey. That's close to the record low interest rates of late last year, which bottomed out at an average 4.71 percent for the week ending December 3. In January, average interest rates rose to 5 percent and have hovered there or just below ever since.
More tests to the mortgage market are coming. To begin with, the Federal Reserve's most important interest benchmark rates are still set at effectively zero. Historically, officials have typically kept these interest rates at 2 percent or above, effecting interest rates throughout the capital markets. The Fed officials continue to promise that they will keep these rates "exceptionally low" for an "extended period," -- language they have used for more than a year.
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Economists: 3-year backlog of foreclosures in courts
By: Washington Post
Publicada el: 25/Jun/2010
It could take at least three years to work through the backlog of delinquent borrowers, economists say....
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Governor Crist signs massive condo bill today
Publicada el: 25/Jun/2010
FORT LAUDERDALE, Fla. – June 24, 2010 – Gov. Charlie Crist traveled to South Florida today to ceremonially sign this year’s massive condo bill, SB 1196. The bill, among other things, exempts some elevators from code requirements, revises voting laws for condo associations, and makes changes to loss...
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Foreclosure rates surge, biggest jump in 5 years
By: Alex Veiga, MSNBC
Publicada el: 15/Apr/2010
A record number of U.S. homes were lost to foreclosure in the first three months of this year, a sign banks are starting to wade through the backlog of troubled home loans at a faster pace, according to a new report....
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