Is the Fed Serious about Buying MBS to Force Rates Down?

Sun, 08 Feb 2009 11:10:23 -0800

Back in December, the Fed quietly announced that it was allocating $500B to buy Mortgage Backed Securities to force mortgage rates lower to increase home purchases.

After a brief drop, rates have been climbing the last three weeks.

What's going on here? Did the Fed change its collective mind?

Actually, the Fed is still buying, but they're not buying the MBS pools that will lower rates. They're mainly buying MBS 6.0% coupons.

Why?

The guys at the Fed are no dummies. They know homeowners are refinancing. So, they're buying the MBS pools that are likey to hold a lot of mortgages that will be refinanced. This gives them their money back in a short amount of time, keeps a lid on mortgage rates and gives them a decent short-term profit.

Drew Sygit is President of The Lending Edge and holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He's spoken for HUD, has written numerous articles and is a mortgage industry advocate for loan originator licensing and consumer education. He can be reached at 248-356-3739, dsygit@TheLendingEdge.com or read his blog: http://drewsmortgagenews.blogspot.com.

Michigan, Mortgage, Expert, Birmingham, Bloomfield, Detroit, Rochester, Royal Oak, Troy

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The most Certified Mortgage Experts in the Midwest

P: 248-356-3739 • F: 866-215-3755 • InfoTLE@TheLendingEdge.com • www.TheLendingEdge.com

FNMA tells Real Estate Investors - Ready, Set, Go!

Sun, 08 Feb 2009 10:44:50 -0800

Real Estate Investors - Ready, Set, Go! (edit/delete)

FNMA has made another change that I've been telling many of my clients was coming.

Just announced after hours today, effective April 9, 2009, FNMA is raising the limit of 4 mortgages per borrower back up to 10!

This is great news for investors that want to grab some of the fantastic deals in foreclosures available.

A couple of warnings though:

1. FNMA has drastically raised the requirements for reserves.

2. FNMA's earlier annoucement (see my blog) about price increases, means no more zero point deals.

3. Mortgages under $50k are difficult to get and even more expensive.

Make sure to read the announcement the link below connects to. Please EMAIL me with your questions as I still haven't had time to get back with everyone that had questions on my email about the FNMA appraisal waiver this morning.

As always, keep me in mind for referrals as I have extensive knowledge and connections for real estate investors.

Oh yeah, for my next prediction (as I'm two for two so far this year) ...

... there's a decent probability that either FNMA or FHA will offer investors rehab financing on foreclosed properties.

Now click on the link and read the fine print:) https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf

Michigan, Mortgage, Expert, Birmingham, Bloomfield, Detroit, Rochester, Royal Oak, Troy

_______________________________________________________________

If you enjoyed our blog post,
we invite you to connect with us on the social networks below & subscribe to our blog!

"Referrals are Sending Someone You Care about, to Someone You Trust!"
So, forward this blog post to someone that'll appreciate it!

_______________________________________________________________

The Lending Edge: CMPS (2004-2010), CMC, CRMS, CMLO, CALO, MBA, NAMB/MAMP Instructor & Speaker
The most Certified Mortgage Experts in the Midwest

P: 248-356-3739 • F: 866-215-3755 • InfoTLE@TheLendingEdge.com • www.TheLendingEdge.com

Drew's Mortgage News

Is the Fed Serious about Buying MBS to Force Rates Down?

FNMA tells Real Estate Investors - Ready, Set, Go!