Mortgage Interest Rates Plummet After Fannie Mae Freddie Mac Takeover

I have been tracking mortgage interest rates for the last few months. Its always more interesting when there are drastic changes. This week we saw some of the largest changes we have seen this year. This is of course in response to the Fannie Mae and Freddie Mac takeover. The 30 year mortgage rate dropped from 6.35 to 5.93 this week. What makes this more pronounced is that rates have been coming down the last month back on July 24th rates were at 6.63. The 15 year mortgage came down as well this week falling from 5.90 to 5.54. We did not see as much movement in adjustable rate mortgages. 5 Year arms came down to 5.87 from 5.97 last week. 1 Year arms actually increased from 5.15 to 5.21. Below we listed out the rates for the major mortgage products for the last few weeks.

September 11, 2008
30-yr 5.93 15-yr 5.54 5-yr ARM 5.87 1-yr ARM 5.21

September 4, 2008
30-yr 6.35 15-yr 5.90 5-yr ARM 5.97 1-yr ARM 5.15

August 28, 2008
30-yr 6.40 15-yr 5.93 5-yr ARM 6.03 1-yr ARM 5.33

August 21, 2008
30-yr 6.47 15-yr 6.00 5-yr ARM 5.99 1-yr ARM 5.29

August 14, 2008
30-yr 6.52 15-yr 6.07 5-yr ARM 6.02 1-yr ARM 5.18

August 7, 2008
30-yr 6.52 15-yr 6.10 5-yr ARM 6.05 1-yr ARM 5.22

So how is all of this going to be reflected in the mortgage payments one will be paying. Using our free mortgage calculator we ran the numbers on a 200k loan. We looked at what a mortgage would be this week, last week and July 24th.

September 11th
30-yr $1190.11
15-yr $1638.41
5-yr ARM $1182.43
1-yr ARM $1099.45

September 4th
30-yr $1244.47
15-yr $1676.92
5-yr ARM $1195.24
1-yr ARM $1092.05

July 24th
30-yr $1281.28
15-yr $1707.22
5-yr ARM $1219.75
1-yr ARM $1134.32

Looking at 30 Year rates we can see a pretty substantial drop. Since July 24th the payment has dropped from $1281.28 to $1190.11 (a drop of 7%). Additionally, based on todays rate the 5 year arm option seems pretty pointless since it offers a very small savings compared to the 30 year rate.

So what should we expect next week? Unless banks start to get nervous again I think rates might move down a little more. There are rumors that rates are going to come down to 5.5. I think after next week the effects of the Fannie Mae and Freddie Mac will have moved into the market.

Bake Chicken Foods

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Parts Freddie on fears of disorder foreclosure

The quarterly report has suggested that Freddie Mac filed with state regulators that can document the alleged irregularities in the foreclosure have increased significantly the risk factors that could slow down and hike up the cost of doing business.
He also stressed the fact remains that the integrity of the foreclosure process is crucial for the growth of the housing market and may adversely affect the prospects of the financial sector.
Given that Bank of America (BAC)and Ally, and Wells Fargo (WFC) has recently stated that both documents were thousands of rear attachment, serious doubts about the integrity of the entire foreclosure process have emerged.
But by the continuous negative publicity that the real estate sector has recently been in the press as Freddie. While there may be irregularities in the documents requested were in the process of foreclosure in the past, acknowledges that, with the cooperation of the operator identifies loanGaps and problems in their processes and standards.
Freddie also believes that the current investigation could avoid unnecessary delays and prevent foreclosures across the country and can hinder the liquidation of the property (REO) property.
But with the inventory of REO properties balloon actually already increased to 82% this quarter compared to the numbers of the same period last year, which could delay the costs of maintenance and major banksThe repairs of these properties at the time of sale.
The potential cost of claims and disputes relating to the expected foreclosure fiasco could also demanded the surrender of the policy issues brought by improperly conducted foreclosure documents. In short, the whole issue should be expensive, difficult and time consuming for everyone.
The various state laws foreclosures are not helping to alleviate the situation. The banks are still farMethod to determine the extent of the problem for the state government and most of the time, they have no choice but to relationships of its sellers and servicers in the area before they could be expected to generate their own assessments.

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