Let's start with the good news! The Federal Housing Finance Agency announced Friday that Fannie Mae and Freddie Mac will start purchasing MBS (mortgage-backed securities) immediately hoping to instill some strength in this ever volatile and crazy market lending some insight to better rates in the near term future. FHFA Director James Lockhart stated "We also expect each company to continue to increase its direct support to the mortgage market through their ongoing securitization activities." As this seems to lend some support long term for mortgage rates someone forgot to let the traders know this "tid-bit" on Wall Street as we have seen far worse rates on Thursday, Friday and more than likely today. The MBS' they are referring to have lost 160 bps since last Tuesday. What else can be done to help shore up the mortgage market and in particular mortgage rates. The government already came out and explicitly backed the mortgage-backed securities of Fannie and Freddie yet we have seemly been hit blows with worsening rates!
On another note October 1, 2008 begins a new fiscal year for the government and in particular the USDA (United States Department of Agriculture) / "rural development". More than likely there will be no funds for approximately two weeks after Tuesday September 30th and perhaps longer depending on when the 2009 budget comes out. Congress has yet to pass a budget for the fiscal year 2009. Hopefully they will act quickly and supply ample funds to keep this crucial housing program operational as it is the only 100% financing alternative available in today's market place!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Monday, September 22, 2008
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