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Why Mortgage Rates Won't/Can't Go Down: Huge GSEs Are Trying to Unload Debt

Government Sponsored Entities hold five trillion dollars in Mortgage Backed Securities, and they're all in trouble. Fannie and Freddy hold only one third of these. They can no longer move the markets.

Lou Barnes, mortgage broker and columnist, wrote an article this week entitled "Fannie-Freddie deathwatch begins". It's worth your time. Fannie and Freddy are dying. Their demise won't affect the average Joe, but stockholders will be wiped out. Bond holders won't.

Here's the important part:

If you're waiting for home prices to decline further before making your move, you're looking the wrong way as you step into the street. You're about to get run over by rising mortgage rates. Get 'em while you can. Call your realtor!

I'm Mike in Tucson, your preferred Tucson, Arizona mortgage lender.

Think of me as your local expert.

Posted by Mike Jones on 08/23/2008 11:39 PM

Comments (14)

gse, mbs, mike in tucson, tucson mortgage, mortgage rates, fannie mae, freddy mac, which way are rates going

Originally posted at: Tucson By Choice!: Why Mortgage Rates Won't/Can't Go Down: Huge GSEs Are Trying to Unload Debt

Post is included in group: All About Mortgages/Mortgage Networking
Post is included in group: Arizona Real Estate
Post is included in group: AZ Real Estate Blogging Network
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14 Comments on Why Mortgage Rates Won't/Can't Go Down: Huge GSEs Are Trying to Unload Debt

AUG

2008

I saw that article the other day. I'm not one who attepts to advise clients about financing.. leave that to the pros like you. So much to keep up with these days!

I'm wondering if my IRA will still be around when I get there. arrrgh. What a mess we've made.

You are so right. It is all about the monthly carrying costs. The new higher rates will drive home prices down further - that is only great if you are a cash buyer.

I have no doubt this is really coming...I can feel it in my bones!

Mortgage rates rising......hummmmmm we knew that it was coming, but how laud do we need to scream?

I saw that article too, Mike. It is no longer about the price of the home...it is about how much the money costs. Have you written about this on your KVOA blog yet?

MIKE, I just hope we don't end up back like we were in the Carter years. I remember buying a home at 12.5% and that was with bond money our neighbors rate was 18.5%. I guess that tells on my age.

Wonderful. Mr. Mudd, the COO during the financing scam perpetrated by Mr. Raines who schmoozed himself out of a criminal prosecution, graduated to CEO with a package of about $7,000,000 a year.

They could create a story like that in Hollywood.

This is frightening, but we \'ve been warning our contacts that there will be changes, and they will not be good. So, they'll find out for themselves.

Been saying this for months and I'm sure it will come to pass sooner rather than later.

My advice - get liquid in a hurry.............

placeholder to thank you for commenting; see you soon on your blogs.

Mike in Tucson

AUG

2008

I've been pretty much a banking sector "doom-sayer" and I tell you what...it's looking worse than anything that I ever imagined. "Theory" is always more palatable than when the crap actually starts hitting the fan. No one, no entity, or governmental hand holds the power to put humpty dumpty back together again. Our only 2 hopes...1) Jesus coming back OR 2) the invisible hand that Alan Greenspan references swaying macro economic forces in our favor. I'm covered both ways...I'm a Christian who believes in macro-economic conspiracy theory.

The next 6 months will be epic.

Rich, I'm hoping for option one. That is the most reliable way I know to be saved! :)

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