Phew, what a busy couple of days!

I’m sure at this point you’ve been inundated with emails from loan officers since yesterday morning, so I probably don’t need to tell you that many buyers are qualifying for 5.5% with no points today. We saw a huge drop yesterday in rates, so, rather than harping on how attractive they are, I thought I’d let you know some of the why behind it.

Over the past 4-5 weeks, investor demand for mortgage securities had waned considerably, as wave upon wave of bad economic news suggested consumers and homeowners would face greater difficulty in meeting their debt obligations going forward. As a result, mortgage rates stayed artificially high, even as treasury rates approached their lowest point in half a century.

Overnight, going into Tuesday, the Federal Reserve announced it would buy $600 billion in mortgage bonds. This rallied immense support for the value of mortgage assets, and the result was a drop of anywhere from .375% to 1% in rate for many mortgages. At this point prospects of even lower mortgage rates have grown, although there isn’t any certainty yet they will become available.

Many buyers recently have been limited in what they can purchase, and a lower rate could well help them offer more. Now is a good time to reevaluate stale pre-approvals to see if a lower mortgage rate could help them close their purchase in 2008, to more easily take advantage of the great incentives currently available!

I want to wish you a very Happy Thanksgiving, and safe travels. I will be available Friday 11/28 with full ability to send updated pre-approvals, and, for those of you within earshot, I will be a guest on the Rhode Island Real Estate Insiders this Saturday, 11/29 at 10:00 AM on 790 AM Rhode Island’s True Oldies, and online at http://www.790thescore.com .

Dan Hartman

Senior Mortgage Advisor, MBA

Province Mortgage Associates

(401) 263-8655