Breaking News Concerning Interest Rates

We are sending out our Friday update early due to BREAKING NEWS concerning Interest Rates. Please also read below for information concerning USDA changes as well as a great "Did You Know" concerning Short Sales. Have a blessed rest of the week and weekend..... we so appreciate your trust in referring your clients, friends and family to us and look forward to a continuing strong partnership. Linda BREAKING NEWS- Interest Rates ......... "Will rates stay where they are for a few hours or a few days? I'm not sure yet. I do know the time is to act now- whether it is to purchase or refinance." What effect does the $750 billion to Mortgage Backed Securities mean..... read below and forward on to your clients, friends and family. If you had asked me what rates are going to do in February, I would have said "rates are great but I don't know if we're early in the game with the market heating up or if we're in the fourth quarter with the clock ticking down." Since that time rates deteriorated some, but overall have remained at/near historic lows. Yesterday the Federal Open Markets Committee (FMOC aka "The Fed") kept rates the same as anticipated - however they increased their commitment to buy mortgage backed securities and will begin buying long-term treasury bonds. This resulted in a rally in mortgage backed securities (MBS) and in treasury bonds. The historic low mortgage rates we have been enjoying are a result of two things: the rally was sparked by the Fed's commitment to buy $500 billion in MBS and they have continued to stay low as they are buying $20 billion to $30 billion per week of MBS. Some people would call this market manipulation they call it "Government Support." Yesterday, the Fed committed an additional $750 billion to MBS purchases; bringing the total to a staggering $1.25 trillion*. The $300 billion commitment to buy long-term treasury bonds is a great move a treasury bonds are considered one of the safest investments in the world. If MBS get pushed lower but treasury bonds stay higher; no one will buy MBS and rates will go up. If the Fed pushes treasury bond rates lower as well then MBS will remain an attractive investment and mortgage rates will remain low. Now you're asking, "what is the bottom line? Are we early in the came or are we in the fourth quarter with the clock ticking down?" Rates are back almost to the lows we saw in January. Will they get there? I'm not sure yet. Will they stay where they are for a few hours or a few days? I'm not sure yet. I do know the time is to act now- whether it is to purchase or refinance. If you or someone you know has been waiting, act now. Due to strain on the market we can only lock rates for loans that are in process with complete packages. I know the only way to ensure you get today's rates or are ready for tomorrow's rates is to start moving forward immediately. The strategies my team has been executing have proven to be the right strategies for this market. Loans are taking longer, underwriters are asking for more documentation, and the process often times feels more painful than going to the dentist. That said, we are successfully delivering the best rate and fee scenarios available in the market place. As always I would sincerely appreciate it if you would forward this on to your database of clients, friends and family. We continue to be overwhelmed with stories of lenders taking advantage of people, over promising and under delivering, and letting rate locks expire. Please don't let that happen to some you know. We are committed to fulfilling our promises. Side note: The Obama administration admitted yesterday that lenders are not ready for the modification initiative and that people should be patient as they gear up. They are expecting nine million households to qualify and I believe they really are trying to gear up for the volume so rest assured your servicer will address your situation soon. Thank you for your trust. Linda