Wednesday, March 31, 2010

Mortgage rates might be going up soon!

Here is an email that I received from one of our preferred lenders, - Cummings Financial -

The Federal Reserve mortgage backed securities program ended today. The Fed has invested approximately 1.3 trillion dollars in the mortgage backed securities market to help stabilize the housing and mortgage markets by providing funds to purchase mortgages that Wall Street has been unwilling to purchase due to the housing crisis. As a result of the Feds investment in mortgage backed securities mortgage rates have been held at near record low levels. This has kept the housing market alive during a very difficult period.

Unfortunately, the 1.3 trillion dollar investment was fully funded this week. The Fed does not appear to have any intention of extending this program. In reality, it appears the opposite will occur. There have been comments from the Federal Reserve that the Fed will sell the mortgage bonds they purchased back to the financial markets.

What does all of this mean for consumers that are looking to purchase or refinance their home? Higher Rates...

Why? Because the ultimate buyers of mortgages are Wall Street investors who purchase mortgage backed securities. The housing market is still struggling and there continue to be millions of homes in foreclosure. Therefore, this risk will be priced into the yields investors expect to earn on their investments which means higher rates for mortgage loans for consumers.

Many analysts have predicted mortgage rates would increase by 1/2% shortly after the end of the Feds mortgage backed securities program. In addition, analysts are predicting rates increase from 5% to 6% by summer. This combined the with scheduled termination of the move-up and first time buyer tax credits may have an adverse impact on our housing market.

In closing, mortgage rate volatility will be controlled by the economic news that is released on a daily basis, weekly or monthly basis. This is no different than how the market has operated for years. Therefore, I will return to sending out market updates on a regular basis to keep you informed regarding the current interest rates and what is impacting interest rates.

There has never been a more important time than now to work with an expert with a proven track record. Home buyers and Realtors cannot afford to trust their transaction to anyone in this market. The new rules, regulations, disclosures and complex underwriting guidelines have made home buying a difficult and challenging process. We continue to deliver exceptional service and seamless closing even in this market.

I hope you will encourage your clients to call Lisa or myself to compare rates and programs. More importantly, take advantage of my in-depth mortgage planning. We have dramatically impacted the lives of thousands of families. As a result, we have received approximately 1,500 testimonial letters, cards and notes from our clients expressing their sincere appreciation for our expert advice, exceptional rates and seamless service.

To Your Success,

Scott Cummings, CMPS

President / CEO

Cummings Financial

505.884.8600 office


Lisa Cummings, COO

Cummings Financial

505.884.8600 office

505-362-1338 cell

Very good information!  Please feel free to contact us about real estate at for buying or selling your home.
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