Florida Mortgage : Learning Center

The efforts made in 2008 to kick start the mortgage and housing markets, by the Feds, seemed never-ending.  Politicians in Washington kept coming out with new proposals to stimulate the mortgage meltdown in hopes to prevent more and more foreclosures.  And of course, focused mostly on ways to lower current available mortgage rates for home buyers.

There was the typical lowering of the Fed Funds Rate which allows banks and other lending institutions to lend balances at the Federal Reserve to other banks and lending institutions overnight.  Banks are now lending with each other at rates as low as zero percent!  And consumer 30 year fixed rates remain stuck in the 5% to 5.5% range.  Bank greed?  I wonder.

When new legisation pushed HUD to allow refinancing for families facing foreclosure at around 90% of their current appraised values; I was thrilled.  But, again, banks actually told members of the Financial Services Committee, that they would probably never use this method of mortgage renegotiation; but it was a great idea.  Who is in control, Congress or big Banks?

But in November, the Treasury Department purchased billions in mortgage backed securities (MBS).  This did inspire banks to give in and finally lower available consumer mortgage fixed rates.  In fact, we saw Florida mortgage rates improve by almost .75%.  Something that worked, finally!

Going forward into 2009, we can expect Feds know that a stimulus package from team Obama can and will push banks to lower available consumer fixed mortgage rates.  It worked before.  It will work again.  Keep your eye and ears on when and how much the first 2009 MBS buyback from the Treasury Department.  Florida mortgage fixed rates should then see major improvements. 

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