It's not the rate cuts yesterday that will save the day but the change in requirements for Fannie Mae and Freddie Mac set by the Office of Federal Housing Enterprise Oversight.
The OFHEO reduced reserve requirements that Fannie and Freddie must abide by, by 10% which will funnel $200 Billion into the secondary market to ease the liquidity crisis we have experienced.
Based on the economic data, rates for conforming first mortgages should be incredible right now, those days are sure to come as banks reduce the spread between the 10 year bond and 30 year mortgage rates that they have had priced in. Most banks have priced in the largest spread seen since about 1982 with 3.5% built in. This has kept interest rates higher than they 'should' be or at least higher than we are used to.
Watch the next coming days and take advantage of a lower 30 year fixed rate conforming mortgage.
For up to date information, tune into Straight Talk Real Estate, Live at 6pm PST on KRLA AM-870 or streaming live at www.StraightTalkRE.com.
~ CHUCK
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