Freddie Mac problems translates into higher Mortgage rates
Started by Junkman
almost 18 years ago
Posts: 288
Member since: Jun 2008
Discussion about
I was going to wait for rates to come back down but Mac's troubles may possibly cause mortgage rates to keep on moving on up. I clipped out a couple of sentences that gave me pause. I'm locking in for 15 months at a cost of .5 points for today's rates. "Analysts said the quarterly results indicate that mortgage rates would most likely continue to rise because Freddie Mac expects to scale back... [more]
I was going to wait for rates to come back down but Mac's troubles may possibly cause mortgage rates to keep on moving on up. I clipped out a couple of sentences that gave me pause. I'm locking in for 15 months at a cost of .5 points for today's rates.
"Analysts said the quarterly results indicate that mortgage rates would most likely continue to rise because Freddie Mac expects to scale back growth in how many mortgages it purchases.
“Freddie and Fannie have been propping up the mortgage market by continuing to buy larger numbers of loans,” said Paul Miller of the Friedman, Billings, Ramsey Group, an investment firm in Arlington, Va. “If they start pulling back, mortgage rates are going to start climbing to north of 6.5 percent. People will start panicking at 7 percent.”
The average interest rate on a 30-year fixed mortgage as of July was about 6.5 percent, according to Freddie Mac.
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Response by junkman_r_u_serious
almost 18 years ago
Posts: 230
Member since: May 2008
FRE and FNM are backed into a corner. They are at the point where they are focusing almost enitrely on meeting capital adequacy requirements. Earnings aren't even in the picture at this point. End result is a (gradual?) deleveraging of their balance sheets, which translates into less loan availability for all of us.
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Response by junkman_r_u_serious
almost 18 years ago
Posts: 230
Member since: May 2008
btw - sorry for the inflammatory name i chose junkman. i didn't know you only get to choose 1 and were stuck with it forever.
FRE and FNM are backed into a corner. They are at the point where they are focusing almost enitrely on meeting capital adequacy requirements. Earnings aren't even in the picture at this point. End result is a (gradual?) deleveraging of their balance sheets, which translates into less loan availability for all of us.
btw - sorry for the inflammatory name i chose junkman. i didn't know you only get to choose 1 and were stuck with it forever.