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Fed Cuts Rates - Mortgage Rates NOT Dropping!

My email to friends this morning says, "LOCK 'EM IF YOU GOT 'EM!"

GREAT OLE' BIG DISCLAIMER: We are in a little different situation than most of our competitors, because we can allow folks to float their rate down until a few days before closing. If you are working with a "bank" like Wells Fargo, of BofA you might want to wait a few days before locking...

Okay- so the Fed worked with other Global Central Banks and coordinated a rate cut.

Our Fed rates went from 2.0 to 1.5.

If you're in the market for a mortgage, you might think that mortgage interest rates are diving today too! Hold up! As the news has been announced, I've been watching glued to CNBC, and the 10 yr TB (which mortgage rates loosely follow) has gone UP on the news!!!

Remember - the Stock Market took a bath during the last few days. TONS of money came "off the table" and as it's reinvested, it probably will not come back into BONDS. Mortgages (as we all now know) are sold as BONDS. It could be Monday or Tuesday before we know if mortgage rates are going to have any impact from this move.

PIMCO - at times the largest purchaser of mortgage back securities, and where Greenspan works - thinks that if the Fed lowers rates ANOTHER 100 to 50 bps, we will see a significant lowering of mortgage rates. They think this could spur on more purchases - and will allow folks to refinance. CAUTION! IF the Fed does lower again in the coming months - it will be a QUICK, SHORT period of time under 1% Fed rates. Much of the current mortgage problems are blamed on rates after 9/11 being TOO LOW.

If you are a consumer thinking you will purchase real estate at the next Fed Cut (if there is one), go see a lender TODAY. Let us help you get your scores up NOW! Underwriting Guidelines are getting tougher on October 10th, so having GREAT scores is important... and in most cases it's not that painful!

So be vigilent, now is the time to be in FULL CONTACT with your lender! If you are going to be a lender in this market - you need to be one of the smartest guys in the room!

Posted by Eleanor Thorne 919-649-5057 Cary Mortgage Loans on 10/08/2008 07:02 AM

Comments (20)

Mortgage Rates, Fed Bailout, Financial Market, DOW in the Mortgage / Finance Channel

mortgage rates cary, lowest mortgage rate cary nc, economy, fed funds rate

Originally posted at: Mortgage Lending, NC Style: Fed Cuts Rates - Mortgage Rates NOT Dropping!

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20 Comments on Fed Cuts Rates - Mortgage Rates NOT Dropping!

OCT

2008

The lower prime rate should also help credit card & equity line consumers, too. I love the Lock and Load enthusiasm of the post!

Lock and Load! Great way to look at it! There's business out there - our job is to FIND IT!

Well put, Eleanor. We live in pretty volatile times, staying in constant contact with your lender or prospective lenders is a must.

Thanks for clarifying the current situation - you're right, it seems every time the Fed cuts, the mortgage rates actually go up at least a bit.

i love that last link's anchor text! very nice.

chris the implementer

Eleanor,

Great post, (and I never say that!)

Mike in Tucson

Hey E, looks like we will have a fun day again today....... market is worse by 50 so far

I personally like the mattress as a safe haven from stocks. BTW, love the illustration. LOL

Elaine - glad we have an extra 3 hours here on the "left" coast. Ditto Mike Jones.

Rates should not be the issue when you buy today LOCK it is just too risky not to.

Hi Eleanor - I LOVE the picture of George! Yes, people need to lock in their mortgages. I've got one in escrow and we are waiting for the appraisal - with FNGERS CROSSED!!!! We need to lock in ASAP. I'm praying this is a done deal. It was a loooooooong tough negotiation that went on for weeks and got stalled over $500 for more than a week. So much can go wrong and sooooo much work just to get to contract.

OCT

2008

Thanks for putting this out there, Eleanor! Now is CERTAINLY the time to have a serious conversation with your lender and lock in a rate!

Eleanor:

The mortgages rates are hostage to the credit spreads, such as libor. The spreads are wide due to uncertainty of the system and the banks ability to pay back their interbank loans.. Also in the bail out bill. congress wrote in a piece that Bankruptcy Judges can cram down principle on home mortgage loans. This essentially will raise the average cost of a loan due to a new possible unsurity of it principle. This is going to take time to get priced into the market.

Richard

Excellent post Eleanor!

There IS business out there.

And it IS our job to find it.

Eleanor ~ I am back! Glad to hear that you missed my smiling face! :-) Great post. It is a time to be pro-active not reactive! :-)

HI Eleanor. Love that picture of good ole' George Washington on the sinking dollar LOL! I know most of the public think fixed rates drop with the FED, no matter how many times I have told clients that is not how it works in the past they tend to forget it seems.

Take care, Dan Chapman

It would be a good thing if the mortgagerate would drop. I've got clients sitting on the sidelines thinking that the rate is going to drop soon.

Eleanor, Good advice to people, to position themselves with good credit by working on it now. Some of them wait until the day before they buy a property! This advice should be tattoed on some!

It's a Good Life!

I am Fran Rokicki, Realtor, and I am never too busy for your Ct Referrals and I approve of this message!

OCT

2008

Guys - it's going to be a wacky day - no lower rates in sight until mid next week. When they get this economy figured out - we are likely to have mortgage interest rates in the very low 5% range for a SHORT period of time. People need to get their credit striaght NOW, and be ready to pull the trigger!

OCT

2008

Eleanor ~ I was browsing through your blogs and saw this one. Love the picture on the dollar. :-D

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