Rates on 30-year mortgages remain below 5 percent
McLEAN, Va Nov 20, 2009
Rates on 30-year mortgages stayed below 5 percent this week but remained above the record set earlier this year, Freddie Mac said Thursday.
The average rate for a 30-year fixed mortgage fell to 4.83 percent, down from 4.91 percent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 percent.
Rates hit a record low of 4.78 percent in the spring, and remain attractive for people looking to buy a home or refinance their existing mortgage. Still, credit standards remain tough, so the best rates usually are available only to borrowers with solid credit and a 20 percent downpayment.
The Federal Reserve has pumped $1.25 trillion into mortgage-backed securities to try to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
Low fixed rates in the third quarter led to about $1.1 trillion in refinancing activity, saving borrowers about $10 billion in monthly payments over the first 12 months of their new loan, said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, frequently in line with long-term Treasury bonds.
The average rate on a 15-year fixed-rate mortgage fell to 4.32 percent from 4.36 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, down from last week’s 4.29 percent. Rates on one-year, adjustable-rate mortgages declined to 4.35 percent from 4.46 percent.
The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year loans. The fee averaged 0.6 point for 15-year, five-year and one-year loans.
The average rate for a 30-year fixed mortgage fell to 4.83 percent, down from 4.91 percent last week, the mortgage company said. Last year at this time, 30-year mortgages averaged 6.04 percent.
Rates hit a record low of 4.78 percent in the spring, and remain attractive for people looking to buy a home or refinance their existing mortgage. Still, credit standards remain tough, so the best rates usually are available only to borrowers with solid credit and a 20 percent downpayment.
The Federal Reserve has pumped $1.25 trillion into mortgage-backed securities to try to lower rates on mortgages and loosen credit. Rates on 30-year mortgages traditionally track yields on long-term government debt.
Low fixed rates in the third quarter led to about $1.1 trillion in refinancing activity, saving borrowers about $10 billion in monthly payments over the first 12 months of their new loan, said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, frequently in line with long-term Treasury bonds.
The average rate on a 15-year fixed-rate mortgage fell to 4.32 percent from 4.36 percent last week, according to Freddie Mac.
Rates on five-year, adjustable-rate mortgages averaged 4.25 percent, down from last week’s 4.29 percent. Rates on one-year, adjustable-rate mortgages declined to 4.35 percent from 4.46 percent.
The rates do not include add-on fees known as points. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year loans. The fee averaged 0.6 point for 15-year, five-year and one-year loans.
New fed housing program involves $29B in financing
WASHINGTON – Nov. 20, 2009 – A new federal program to support state and local housing finance agencies is expected to involve more than $29 billion in government support, Fannie Mae and Freddie Mac disclosed Thursday.
Under the program announced by the Treasury Department last month, the government-controlled mortgage companies will help fix the funding crunch at housing finance agencies, which have struggled to raise money because of the housing and credit crises.
Fannie and Freddie will package mortgages made by the housing agencies and sell them as bonds to the Treasury Department. The companies said they each could lose $9.2 billion in a worst-case scenario where every borrower defaults and no money is recovered through foreclosure.
But Treasury Department officials say any losses from loan defaults will be covered by fees paid by the state agencies. They expect no cost for the federal government.
Treasury officials had declined to place a dollar value on the size of the bond program when it was announced, saying it will be based on demand. The housing finance agencies aid up to 200,000 first-time borrowers a year.
Fannie Mae and Freddie Mac, which were seized by federal regulators in September 2008, purchase home loans from lenders and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages
WASHINGTON – Nov. 20, 2009 – A new federal program to support state and local housing finance agencies is expected to involve more than $29 billion in government support, Fannie Mae and Freddie Mac disclosed Thursday.
Under the program announced by the Treasury Department last month, the government-controlled mortgage companies will help fix the funding crunch at housing finance agencies, which have struggled to raise money because of the housing and credit crises.
Fannie and Freddie will package mortgages made by the housing agencies and sell them as bonds to the Treasury Department. The companies said they each could lose $9.2 billion in a worst-case scenario where every borrower defaults and no money is recovered through foreclosure.
But Treasury Department officials say any losses from loan defaults will be covered by fees paid by the state agencies. They expect no cost for the federal government.
Treasury officials had declined to place a dollar value on the size of the bond program when it was announced, saying it will be based on demand. The housing finance agencies aid up to 200,000 first-time borrowers a year.
Fannie Mae and Freddie Mac, which were seized by federal regulators in September 2008, purchase home loans from lenders and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages