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31 Dec 08 Mortgage Rates Decline to Lowest Level

According to Freddie Mac chief economist Frank Nothaft, “Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all-time record low since Freddie Mac’s survey began in April 1971.”  FHA rates declined to 5.25% this week and many believe will promote new opportunities in 2009 for first time homebuyers.  Second mortgage rates declined for fixed equity loans and home equity lines of credit.  Home mortgage rates have dropped dramatically ever since the Federal Reserve unveiled a plan last month to buy up to $500 billion of mortgage securities backed by government-sponsored enterprises, Fannie Mae, Freddie Mac, and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Interest rates on U.S. thirty-year mortgage loans with fixed interest rates dropped for a ninth consecutive week, reaching their lowest level in 37 years, according to a survey released on Wednesday by home funding company Freddie Mac.  Mortgage rates for 30-year fixed-rate mortgage dropped to an average of 5.10 percent for the week ending Wednesday, down from the previous week’s 5.14 percent, Freddie Mac said.  The 30-year fixed-rate mortgage has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

Many industry insiders believe that mortgage interest rates will decline to even lower levels in 2009.   Internet advertising firm, KMG president, Jason Cardiff said in a statement yesterday, “Rates for home mortgages will decline to unimaginable levels in 2009, because the American people need an incentive to start taking risks again in buying real estate.”  Cardiff continued, “the banks need to trust restored as well and the only motivating reason for consumers to start borrowing again will be low mortgage rates.”  Cardiff pointed out that low rate mortgage loans for targeted groups are not enough. “The banks need to expand their lending guidelines so that not only people with high credit scores have the opportunity to refinance into a mortgage they can afford.”

The Federal Reserve continued their aggressive actions with an effort to drive down home loan costs, setting a goal of buying $500 billion in mortgage-backed securities by mid-2009.  The struggling housing market is essential to the U.S. economy.  Many economists believe improving the housing market with low rate incentives will stimulate a recovery for the world’s largest economy, which admitted to being in a recession since last year.  The housing market is in the worst downturn since the Great Depression as a huge supply of unsold homes, tighter mortgage lending guidelines and record foreclosures push down home prices.

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17 Dec 08 Home Lending Restoration? Fed Cuts Interest Rates

According to Mortgage Rate News, the Federal Reserve rate cut inspired lenders nationwide to lower mortgage rates to 5% for 30-year fixed rates for conventional home loans.  The federal government made additional promises to promise to continue to buy bad credit mortgages in an effort to revive the struggling housing markets. 

Brokers Network executive, Steve Park said, “The government commitment to protect struggling borrowers with new FHA loan program opportunities like, Hope for Homeowners should help restore consumer confidence and lows.  The Feds confirmed more relief with the promise to buy bad credit mortgages in an effort to revive the struggling housing markets.

According to Kelly Media Group president, Jason Cardiff, “The fact the lenders are willing to provide loan modifications to homeowners that do not qualify for traditional or FHA refinancing is simply remarkable.”  Cardiff continued, “The interest rate cut by the Fed clearly signals a monumental step by the U.S. to restore trust in our financial systems that should spur more market recovery globally.”  Read the complet article > Mortgage Lending Systems Begin to Reform with Historic Rate Cut by the Fed .

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