We've received some of the biggest news to hit newsstands in quite some time and it barely made the spotlight! News that the Treasury Dept has plans to purchase roughly $600 Billion in mortgage-backed securities should be posted on the front page of every news giant across the nation, but instead we see Somali Pirates & OJ's sentencing... Granted, pirates & OJ do have a knack for capturing our attention on a celebrity level BUT...the Treasury news is news that truly has the potential to start a boom like no other!  Let's decipher the $600 Billion...

Under this proposal, the Treasury buys mortgage-backed securities...why?  Because by purchasing the securities, it pushes rates down.  Right now, interest rates on a 30-year fixed rate mortgage are hovering around 6% and the goal is to drive them down to 4.5%!! 

If enacted, such a plan would create an unprecedented opportunity for anyone with stable income and decent credit score to refinance at a rate unseen since the early 1960's...essentially creating the "mother of all refi-booms"!!! 

Refinance boom aside, there are 2 major benefits to our economy:

1. Places IMMEDIATE cash in the pockets of our homeowners able to refinance to lower monthly payments

2. Lower interest rates = more Buyers flooding the market = halt of housing value decline

The goal is to drive mortgage rates so low that housing prices stop falling & actually start to rebound...all the while giving much needed cash flow to current homeowners able to refinance.  The trick, then, becomes truly being ready when the opportunity arrives.  It's no secret that we're currently in one of the most volatile markets ever, and it's not uncommon to see a .75% swing in rates within a 24 hour period.  By preparing now, you absolutely set yourself up for success by being able to call your mortgage professional and say LOCK, LOCK, LOCK that rate, when they start falling!

In the midst of a recession...and, yes - it's official, we're in a recession...this is some of the greatest news we could have received! This has the potential to dwarf the boom of 2003 and give our economy the much needed shot of adrenaline we're all hoping for and although we may be "officially" in a recession...you don't have to participate! There is good news all around us, it just may not be on the front page...

For more information or to help prepare for the coming plunge in rates...email me & let's get started.

Cheers!

Josh Perrington

1^st Metropolitan Mortgage

Josh@1st-Metropolitan.com | www.1st-Metropolitan.com | 540.904.0842

2762 Electric Rd, Suite Roanoke, VA 24018