NON political question about mortgage rates (loan, interest rate, foreclosure, rate)

[scootiepie]

I wanted to ask of those in the business - without political undertones -
about what the proposed Obama plan really means for those looking to refinance (and who are making payments faithfully and don't NEED a bailout)

IF... there is a mandated interest rate reduction, of let's say 4 or 4.5% and you take it, does that mean the government suddenly has control of your loan or (even worse) your home?

Would you be better off refinancing now before any of this goes down?

I want to refi, rates are 4.875% where I'm looking. (I have an ARM but rate change doesn't kick in for 4 more years). The thought of possibly going lower is of course very appealing, but not if that means letting gov't get one iota more control in my life.

Thanks.

[bornandraised atl]

I am reading the bill and listening to pundits now....As soon as I figure it out I will let you know...

[bornandraised atl]

it actually has said nothing on "how" they will subsidize rates --- or what the qualifications are, who is eligible, how they will subsidize the rates - and what it means to everyone else.

I would not hold your breath about waiting for the Gov to drop the rates....

[Bette]

If the rates had stayed at 4.875% - 5.00% a year ago, this could have spurred activity. I am one who believes the rate is important. I also know these rates are historically low and could help homeowners actually afford the homes they are in.

The most important thing we need to do is create a bottom for this market. When that happens, consumers will feel more secure about buying and slowly, we will pull ourselves out.

However, the market has changed so much that the professional can hardly keep up with it much less the consumer.

Keep in mind that over 80% of all mortgageholders pay their loans on time.

In answer to the OP's question, I would get with a broker or bank, get everything ready to go and then you will be all set to lock when and if the rates drop.

[scootiepie]

I sure wish I could get a feel for that speech as far as what if means for me, someone who pays faithfully on time, and just wanting a better rate. I am getting the feeling their could be some unpleasant repurcussions down the road, I just don't know what.

[DvlsAdvc8]

I don't think anyone will be able to predict what will happen to rates in coming months.

The massive debt will put pressure on yields to rise, and thus mortgage rates, which may counter other efforts to lower mortgage rates.

[Fant]

I agree. The mortage rates look unpredictable. Certainly Obama's bill may help those who are in foreclosure status come out of it by refinancing but I dont know if it will do much to help normal people who just want to buy/refinance. Safest option right now is to lock in a low rate today and get a floatdown option before closing.

[Daddys///M3]

Originally Posted by bornandraised atl

it actually has said nothing on "how" they will subsidize rates --- or what the qualifications are, who is eligible, how they will subsidize the rates - and what it means to everyone else.

I would not hold your breath about waiting for the Gov to drop the rates....

My understanding is that the government is not planning on directly subsidizing rates, but rather continuing along the path of quantative easing through the purchase of FNMA/FHLMC and GNMA bonds. Of the $500 billion that was alloted for this purpose originally, a little over $100 billion has been injected into the MBS market thus far. The path will remain the same on that front according to the information that I have seen, but the targeted coupons may change and I do think we will see a down in coupon trend shortly. Of course with the new Fannie and Freddie LLPA's and the currently ridiculous spreads between bonds and street level rates the average consumer may never see the benefit of the down in coupon trend.

[bornandraised atl]

---I thought I heard something about a true subsidization ....alas....I am ok with the current coupons being purchased---it will/should keep the rates steady - AND - we/the taxpayer should come out handsomely and not anymore to future debt-----trying to 'splain that in a political sound bite is almost impossible so I am satisfied knowing it will work....and keep rates as is - not 4 or 4.5% but still enough to spur some business, keep the lights on, and help homeowners...