Senate Republican leader proposes 4% mortgages


B

beliavsky

http://www.foxnews.com/politics/2009/02/02/republicans-stimulus-address-housing-crisis/
McConnell Proposes Cheap, Government-Backed Mortgages to Stimulate
Economy

Government involvement in the mortgage market is one of the causes of
the present economic mess, and I do not think this proposal is a good
idea. On a personal level, I am in the process of refinancing a 5.5%
15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I
wonder whether to pull the application and see whether the proposal
becomes part of the boondoggle (ahem, stimulus plan).
 
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R

Ron Peterson

Government involvement in the mortgage market is one of the causes of
the present economic mess, and I do not think this proposal is a good
idea. On a personal level, I am in the process of refinancing a 5.5%
15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I
wonder whether to pull the application and see whether the proposal
becomes part of the boondoggle (ahem, stimulus plan).
Getting a lower rate will involve paying more points. You have a good
deal now.
 
R

Ron Peterson

http://www.foxnews.com/politics/2009/02/02/republicans-stimulus-addre...
McConnell Proposes Cheap, Government-Backed Mortgages to Stimulate
Economy
Government involvement in the mortgage market is one of the causes of
the present economic mess, and I do not think this proposal is a good
idea. On a personal level, I am in the process of refinancing a 5.5%
15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I
wonder whether to pull the application and see whether the proposal
becomes part of the boondoggle (ahem, stimulus plan).
I just got the following in an email message from my bank:
"The appraisers are taking about 3-4 weeks to do appraisals right now
because of all of the refinancing going on. "
 
I

Igor Chudov

http://www.foxnews.com/politics/2009/02/02/republicans-stimulus-address-housing-crisis/
McConnell Proposes Cheap, Government-Backed Mortgages to Stimulate
Economy

Government involvement in the mortgage market is one of the causes of
the present economic mess, and I do not think this proposal is a good
idea. On a personal level, I am in the process of refinancing a 5.5%
15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I
wonder whether to pull the application and see whether the proposal
becomes part of the boondoggle (ahem, stimulus plan).
How likely is any Republican proposal to pass?

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B

beliavsky

How likely is any Republican proposal to pass?
Unlikely as a stand-alone measure, but possible as the price for
getting a few Republican senators on board and preventing a filibuster
of the "stimulus" plan.
 
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D

dapperdobbs

http://www.foxnews.com/politics/2009/02/02/republicans-stimulus-addre...
McConnell Proposes Cheap, Government-Backed Mortgages to Stimulate
Economy

Government involvement in the mortgage market is one of the causes of
the present economic mess, and I do not think this proposal is a good
idea. On a personal level, I am in the process of refinancing a 5.5%
15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I
wonder whether to pull the application and see whether the proposal
becomes part of the boondoggle (ahem, stimulus plan).

I think I agree with your characterization. IMO, the headline is "Due
to bank CEO's idiocy and greed, free markets have been temporarily
suspended." The link below charts prime v. mortgage rates back to 1992

http://mortgage-x.com/general/historical_rates.asp

The spread varies, but it looks like it usually stays within a 2%
range. Prime is currently 3.25%, so legislating the rate to 4% would
not be out of line, it would seem, but I have little idea how banks
run their books, nor what would happen if prime goes to 7% three years
from now.
 
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