Paulson: Not contemplating 4.5% mortgage plan

Paulson does not have to do anything. Mortgage rates are already 4.9%. ANd Paulson is soon going to be gone.

"Mortgage rates are already 4.9%."

No they're not. bankrate.com lists the average 30-year fixed rate mortgage at 5.5%, 22% higher than 4.5%. And that doesn't include co-ops, which are higher, and New York, which is higher still.

IF you can get a mortgage. The price of money is irrelevant when no one will give it to you at any price. That's today's problem - get real!

The Fed buying agency debt and mortgage-backed securities will do something to ease mortgage rates. The issue is - that's not the goal, nor should it be. Because the back-end correction would be worse than what we're currently living through.

bankrate is not accurate steve. Check out Zillow. They are quoting 4.9%

http://www.zillow.com/mortgage-rate-explorer/United-States_30-Yr-Fixed-Mortgage_High-Credit_High-Down_1Mo-Span/

While the Treasury may not have a plan to target mortgage rates, the Fed does. Read today's Fed announcement:

"As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant."

That's why you're seeing discrepancies in mortgage rates, there was a large mortgage rally today because the markets believe the Fed is going to carry out its plan. Mortgage rates will be lower, but only for people who can manage conforming loans.

Spoke to Chase today and conforming mortgage was indeed quoted at 4.875%. FICO of at least 720. For 680-720, figure around 5.25%. No points.

Guidance on income requirement of 2:1 on all debt obligations.

Jumbos, on the other hand, are still 7.5 - 8%

is that for a 30 year fixed faustus?

so this was all talk! Sucks for all the big buyers fo treasuries lately. If this sucka turns, watchout. Although I think it has a bit more to go

yes, 30 year fixed. w/r/t your question about refinancing, shop around, get your rates, understand all the costs and crunch the numbers. very simple.

thanks

As of today, when the Fed lowered interest rate to 0%, mortgage rates are down to about 5.25% - 5.5% APR. Watch your points.

That they buy agency debt or not will not necessarily lower what private-enterprise companies charge. Normally it would, but not in today's environment.

"Sucks for all the big buyers fo treasuries lately."

We've discussed, UD - they're determined to burst the treasuries bubble. You can't give banks money for free and sit on your hands when they don't lend it back out again at 6%. That's a HUGE margin.

faustus - are the 7.5-8% jumbo rates from Chase? We're close to 1-2% better depending on points or no points.
conforming rates are definitely hovering 5% depending on scenario. Its definitely getting those already in contract excited but dont see it pushing new buyers into the market. Theyre waiting for prices to drop. I dont blame them.

Yes, they are from chase.

I think lower rates will push some folks into the market, but not many.

I can tell you that of all the folks I've spoken to recently in NYC (most of whom work in finance), for the vast majority the mood is one of severe austerity. Focus is on budgeting, cutting costs, frugality. And this includes professionals who have been doing quite well (high 6, 7 figure incomes). Cah preservation, retrenchment is everywhere. Does not bode well for real estate.

I can only imagine this is what Japan felt like in the 90s, played out more quickly.

NY rates for conforming 30 year fixed rate mortgages for people with good credit are now under 5%. Hmm, more wrong information from steve. Interesting . . .

He's been spinning tales about mortgage rates for a year. Strange too, why does he care?

shong - is the current limit for conforming refis $625,500?

What's the approx. cost of a refi?

"played out more quickly."

At least it's fast.

Merrill is curently offering for NYC co-op and condo 1 7/8 over 1mo libor (.8%) so total 2.75% on a 1mo libor floating 30 year jumbo mortgage. Libor should sit under 1% for the next 12 months so if you like to take some risk, its there. Cheap money coming back to support the housing market!

Are they going to do anything for the big Jumbo loans out there now? Everyone else is getting bailed out...

I am refinancing and I just locked in 4.875 for a 30 year fixed, no points.

Obviously the lessons of the past have not been learned. Cheap money = people purchasing things they wouldn't otherwise buy = prices rise artificially = people realize they really can't afford what they bought = panic.

lauraanddave: How much is the refi costing?

my refis were about 1200. i refinanced several properties, though. i used HSBC.

30 yr fixed 4.8 at Wells Fargo for NYS.

But aren't those rates for conforming? Also, what kind of limits are you seeing on refis for conforming?

Wells Fargo now down to a 30 yr fix 4.75% rate NO POINTS, and for NYS.

Wells Fargo rate is with a point according to site.

no points.

call a broker. NO POINTS.

Jeez ok. Through retail it's at east .33 of a point though.

at least

Is the cost of refinancing a condo in NYS approx. 2% to 3% of the loan?

"Obviously the lessons of the past have not been learned. Cheap money = people purchasing things they wouldn't otherwise buy = prices rise artificially = people realize they really can't afford what they bought = panic."

UES_Buyer--exactly. I was able to benefit from this and get the rate but it also scares me, 4.anything is not normal.

The rate is less important than the qualification criteria. Unless we are going to bring back no-doc, low-doc, ninja, etc all this seems ridiculous.

good point. Its not like when we had 6%, all those mortgages were 30 year 6%...

The problem was folks who shouldn't have gotten mortgages, and they certainly won't get them now.

waverly - conforming is 417k and agency conforming is 417,001 to 625,500. There is a bit of a price difference between the two and guidelines differ as well.
dg156 - cost of refis depends on whether its a coop or condo. For coops, its about 2k give or take. For condos, if you get an assignment done then its about 3k-4k for conforming refis. Without an assignment youre looking at paying 1.8% to 1.925 in mortgage tax again.