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September 25th, 2011

A recap of last week’s posts



Weekly NewspaperFriday

Speculation: Fed is key ingredient for refinancing underwater borrowers

 I think the Fed’s renewed interest in buying up mortgage-backed securities is the real hidden gem from Wednesday’s meeting, and might just be the beginning steps for  an expansion of HARP to help refinance more underwater borrowers.


“Bank gambling raises mortgage rates

If there is anything the UBS story tells us–and if there are any lessons from past takes of “rogue” traders–it’s that banks should not be allowed to be in the leveraged betting business. That may seem unfair, but only if you think that mortgage rates should be higher because banks are allowed to gamble.


Fed moves forward with plan to lower mortgage rates

As expected, the Federal Reserve announced this afternoon that they are moving forward with their latest economic policy dubbed “Operation Twist,” which may lead to even lower mortgage rates.

What is Operation Twist?

Essentially, the Fed is purchasing more longer-term securities in an attempt to keep downward pressure on long-term interest rates, such as mortgage rates.

What will the Fed do this afternoon?

Many market observers are expecting the Federal Reserve to announce a new form of economic policy this afternoon following their two-day FOMC meeting.

What type of economic policy? Well, that remains to be seen.

On Monday, we provided some analysis of a few possible strategies the Fed could announce today, but at the moment, most of us are expecting that the Fed will announce plans to “buy longer dated Treasury securities in a bid to hold down interest rates.”


I comment on your comments: ‘Appraisals impact mortgage rates’

Two weeks ago we discussed the issue of whether and how new appraisal standards would impact mortgage rates. There were a number of interesting comments, so let’s take a look at them:

Joel says the new standards from Fannie Mae, Freddie Mac and the FHA will have one sure impact: “Only thing this will do is increase the costs of appraisal.”

After a long time in Washington, my conclusion is that no matter what rules or legislation are being proposed, the first response is always to say that changes will result in higher consumer costs.


Mortgage rates falling, the Fed comes calling

Unfortunately, “mortgage rates fall to new record lows,” loses its potentially profound significance when it’s virtually the same headline week in and week out.

As HSH.com’s resident expert Keith Gumbinger writes in the latest Market Trends newsletter, besides mortgage rates, what else is left to cheer about?

“Delinquencies, foreclosures, underwater homeowners, borrowers with sub-par credentials and more have been a continuing story for years now, and there is little abatement in those areas. Even record low mortgage rates have limits in how much assistance they can offer…”

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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