It's Time To Refi Says Mike Cockman at National City

Real Estate Agent with RE/MAX Results 199114074

As many of you have heard the Federal Government stepped in and took conservatorship of Fannie Mae and Freddie Mac over the weekend in a "Bailout".  Many Americans probably don't even know what these two companies do and what impact this will have on the mortgage industry.  As always if any of you or anyone you know has questions please contact me right away, but below is a basic overview with sections from the WSJ.

 Fannie Mae and Freddie Mac play a critical and increasingly dominant role in the mortgage market. The companies buy mortgage loans from banks and package those loans into securities that they either hold or sell to the U.S. and foreign investors. That allows traditional lenders like National City, BOA, etc. to make more loans

Together, Fannie and Freddie own or guarantee about $5 trillion in home loans, about half the nation's total. But an alarming number of those loans started going into default, draining the companies' financial reserves and sending a chill through credit markets worldwide. As investors grew more skittish, borrowing costs (interest rates) started rising.

By placing Fannie and Freddie into a conservatorship, the government is promising investors that the companies' debt is as safe as the Treasury Department's.

While not a cure-all, the bailout is still a step in the right direction, industry observers say.

If mortgage rates fall, that will attract more potential buyers into the market, which, in turn, will help to prop up home prices, he said.

We expect mortgage rates on a conventional, 30-year fixed-rate home loan to fall over the next few weeks as the dust settles on the bailout. Rates, which now average 6.35 percent, could fall as much as half a percentage point. But continued investor wariness and a depreciating housing market will keep rates from dropping further.

As you can see from the attached mortgage rate sheet rates are already starting to drop dramatically (They were 6.375% on Friday).  We are going to be in another refinance boom and I look forward to helping you and any of your family, friends, or clients with any mortgage needs they may have.  Thank you, have a great day and I look forward to hearing from you soon.


  Michael P. Cockman

FHA Manager Residential Loan Officer

National City Mortgage

PH:  314.898.1483

Cell:  314.313.9125


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