My Mind on Mortgages

On Friday Fed Chairman Ben Bernanke announced that he endorses the concept of the federal government guarantying mortgage-backed securities (MBS’s) issued by Fannie Mae and Freddie Mac.  These comments should help mortgage rates move lower. The reason that a government guarantee helps mortgage rates move lower is because it reduces the risk of default on [...]

After reading and blogging about one article in Barron’s this weekend I came to another outstading one.  Here is a link.  Nice work Barron’s. Among the points that I found interesting: * If Fannie Mae [ticker: FNM] and Freddie Mac [FRE] stopped all of their activity — for a moment, forget about shutting them down [...]

Mortgage rates are essentially unchanged from yesterday although pricing on 30 year fixed loans are modestly worse. We still believe that over the next few weeks mortgage rates will improve. Now that the federal government has assumed the guarantees of Fannie Mae & Freddie Mac’s mortgage-backed bonds investors will view these securities on par with [...]

This morning Fannie Mae released updated guideline changes for conforming mortgages.  This is a sign that we can continue to expect tightening in the area of loan approval guidelines which will make it more difficult for borrowers to qualify for loans in the future. I don’t think these changes will drastically impact most real estate [...]

The big news this morning is the government take-over of mortgage giants Fannie Mae & Freddie Mac. The announcement which was leaked on Saturday and made yesterday is likely to become the largest government intervention into the financial markets in US History. Because of the unprecedented nature of the event it is very difficult to [...]

I often reference “mortgage-backed bonds” (AKA MBS’s) in my daily rate updates.  If you follow rate update consistently then you know that when MBS prices fall interest rates rise and vice versa.  The WSJ published a story today regarding investor confidence in high-quality MBS’s and how they remain attractive for bond investor guru Bill Gross [...]

Back on July 15th I posted this blog entry regarding Fannie Mae & Freddie Mac in which I outlined the crucial role they play in our nation’s housing industry.  Here is an update to this saga: This weekend Barron’s is reporting that the two mortgage giants are essentially insolvent and that government intervention is inevitable.  The [...]

On Saturday the Senate passed the Housing Bill. This 700-page law brings a variety of new rules and provisions that will impact the housing industry in a variety of ways.  The President is expected to sign the bill into law early this week.  Here are some summary points that any real estate professional should be [...]

Treasury Secratary Henry Paulson has been lobbying Congress & the American Public to support his plan to instill confidence back into Fannie & Freddie. Both the New York Times and Wall Street Journal carried stories this morning about his efforts. Here is a link the the NY Times article. Here is a link to the [...]