Special Report
02/10/2009

The number one topic of conversation among borrowers and loan officers right now is: "We hear that the government is working on a program that will make rates 4%. Is this true and should I wait to lock in my loan?" Last week some Republican Senators talked about getting something in the new stimulus package that could lower interest rates. The constant barrage of media coverage on this topic has only made it even more confusing for consumers. So what is going on? We have been in contact with our inside sources and our Washington D.C. contacts and have confirmed the following:

1) There are no provisions in the stimulus bill which the Senate passed today that addresses mortgage rates;

2) There is no official plan that has been put forth by the Obama administration or by any other government agency that addresses mortgage rates.

The current plan that we are in the middle of ($500 Billion MBS purchases) which I have been telling you all about, hasn’t been executed in a way that would maximize the affect and cause any meaningful reduction in rates. (See the article below) The bottom line is there is no official (or unofficial) plan to make rates 4%, and there is no silver bullet that can be used to make rates instantly lower. Also, any further action to purchase additional mortgage backed securities (if it ever occurs) may be negated by other potential legislation such as a Foreclosure Moratorium or Federal Bankruptcy changes. As always, please call me if you have any questions. Thanks!