MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

catherinecoy — Fri, 02 Jan 2009 11:43:54 GMT

Manish, the RATE must improve by at least .125 and the FEE for a float down is .375 at most lenders. In other words, a renegotiated lock is NOT free, but if pricing gets markedly better, at least you won't miss out. You can't let the rate lock expire to get a lower rate. You must wait 60-90 days to be considered a "new lock." If lenders allowed customers to let rate lock expire so they, the customer, could get a lower rate, the lender's pipeline would be trashed. No, it doesn't work that way. Also, you have an escrow closing date, do you not, that you must honor? You can't wait until "the last day" of your rate lock because, if pricing improves, you'll have to re-draw the docs and possibly exceed your escrow closing date.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Manish Singh — Fri, 02 Jan 2009 01:55:41 GMT

I am a new home owner (what can I say) and have locked in rate at 4.99 for refinancing with float down option. I have about 3 weeks on lock, so would like to gain from knowledgeable bloggers as to what to expect and look for in next few weeks. How low do you think rates can go? Should I use float down when I see something like 4.5 or wait till last day or even let the rate lock expire and wait till rates hit (don't really know how low)?

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Eric Leithliter — Wed, 31 Dec 2008 17:03:57 GMT

"Candace Shaw wrote: Sign and Float" You cant sign loan docs on a rate that will change in the future or points that could change. That effects the Note and the TIL along with the rest of the documents.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Steven Fishman — Wed, 31 Dec 2008 11:09:36 GMT

Joe Miller you will want to talk to your loan officer since you must be locked in to a rate. If you are with a bank you need to find out if they will offer you another rate lock. If you are with a Broker ask them as well if they can renegotiate your current lock. If they can't talk about moving your file to another lender and float till you get a desirable rate.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Candace Shaw — Wed, 31 Dec 2008 03:45:32 GMT

Joe Miller wrote re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed on Tue, Dec 30 2008 6:45 PM I'm signing my papers tomorrow. What should I do? Wait a bit more? Answer: Sign...and FLOAT!!!

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Pat V. — Wed, 31 Dec 2008 03:28:50 GMT

Do you think rates could creep down to the 3's with points? Last week I saw rates down to 4.5 and I am wondering if rates will go any lower.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Bob Hill — Wed, 31 Dec 2008 02:41:21 GMT

Brian, with all due respect, this is actually the first goverment economic assistance that will directly affect the regular tax payer. I can't blame anyone for criticizing government "bail-out mania". However, the ability to refinance into a fixed rate mortgage below 5% will help millions of homeowners directly. The loans being underwritten nowadays are true investment quality loans with full income documentation and strict credit standards. The risk of default in these pools of loans are probably the lowest in years. Even if the securities being purchased by the Gov't only yeild 1%, there will be little if any loss to the taxpayer. The Government is actually buying something of true value. It's not printing dollars and handing them out like candy this time. A real yeilding asset is being purchased and there could potentially be a nice return on investment that will actually benefit the taxpayer and the governments balance sheet. And speaking as a mortgage professional, this is even better than Christmas morning. Nate, I am with you 100%. I wish I could wipe the memory of 2008 out of my mind. I'm a partner in my mortgage company and watching my loan originators starve this year was horrible. The look of despair will never be forgotton. No one quit on me though (I will never fully understand why). They all stuck it out and they are now reaping the tewards in a huge way.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Joe Miller — Wed, 31 Dec 2008 00:45:18 GMT

I'm signing my papers tomorrow. What should I do? Wait a bit more?

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

David Nierengarten — Wed, 31 Dec 2008 00:23:18 GMT

Sweet. Since it took my lender more than 12 day s to underwrite, I missed the big drop 2 weeks ago. Here's to under 5% in January. And ya, this is the gov't taking money from one pocket and putting it in another, but you know what, since they're taking money from me, I'll take back some of that in the form of this subsidy.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Nate Miller — Tue, 30 Dec 2008 22:58:58 GMT

Brian, as you stated you are a non-mortgage professional so you probably don't see this opportunity the way I (we) do. From late 2007 through most of 2008 it has been a very difficult up-hill battle to close a mortgage loan for even the very well qualified borrowers. With the tightening of lending guidelines along with interest rates hedging up, it was almost impossible to close enough loans monthly to make ends meet. Working 80+ hour weeks to make less than 1/2 the money your used to is very depressing. Try doubling your weekly hourly input and making 1/2 the money, I doubt you will like it very much. Rates dropped last month and we were fortunate enough to pass on amazing rates to a lot of borrowers. Yes I'm making more money when rates are lower and the borrowers are taking advantage of an amazing interest rate. I'm not closing any high-risk loans, all great long term fixed rates. As rates drop again in January, I will make sure every family member, friend and past client I have in my address book will be able to take advantage of a long term rate under 5%. Yes I too think it is was very irresponsible for the Gov. to bailout the banks due to irresponsible lenders and borrowers from the past few years. I too am a tax payer and am paying for it just like you. There's nothing we can do to change the bailout. Insuring lending to the wrong borrowers is stopped has been in the works for the last year, that's why a lot of loan programs are not offered anymore. I beg your pardon through, if offering a rate under 5% fixed for 30 years isn't awesome, your missing it.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

CG — Tue, 30 Dec 2008 22:51:55 GMT

When I said "decline" I meant "decrease", not go up. Just wanted to clarify.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Brian Lane — Tue, 30 Dec 2008 22:20:50 GMT

"Assets purchased under this program are fully guaranteed as to principal and interest by Fannie Mae, Freddie Mac, and Ginnie Mae, so the Federal Reserve's exposure to the credit risk of the underlying mortgages is minimal" Adam, sorry my first comment is a sarcastic one.... but as a non-mortgage guy who finds this to be a(nother) completely irresponsible act by good old Uncle Sam, I find this statement hilarious!! FRE, FNM and GNM are all officially backed by the full faith and credit of the US government. Maybe this protects the Federal Reserve from risk, but lets be serious here... we're really talking about one government agency taking the fall for another government agency. At the end of the day, it doesn't change the end result of the US government as a whole(and the US taxpayer as a result) being completely FUBAR'd if these things go sour again... Mortgage guys, I beg you to show a litte responsibility and to NOT treat this as Christmas Morning all over (see Nate's prior comment).

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Michael Spencer — Tue, 30 Dec 2008 22:15:57 GMT

Randolph Duke: Money isn't everything, Mortimer. Mortimer Duke: Oh, grow up. Randolph: Mother always said you were greedy. Mortimer: She meant it as a compliment.

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

CG — Tue, 30 Dec 2008 21:48:55 GMT

Out of curiosity, how soon before the rates decline because of this very big news?

re: MBS BREAKING NEWS: Full Text Of Press Release and Q and A from the Fed

Nate Miller — Tue, 30 Dec 2008 21:43:35 GMT

Boo-yah! Christmas morning all over.!~