After Ben Bernanke’s announcement of the 1.2 trillion dollar plan to help kick start the mortgage markets; all was quiet.  We waited in anticipation for banks to reset their available Florida mortgage interest rates.  And guess what happened?  Not much!

Our 30 year fixed Florida mortgage interest rate was already at 4.875% for qualified homeowners or home buyers.  And with no points and no origination fees.  Mr. Bernanke’s surprise move had many lenders and big banks thinking hard overnight on where to set their new available fixed mortgage interest rates.  The best improvement we noted was one bank which only improved their fixed rate by .125%.  And that didn’t last long.

Are banks getting greedy by keeping interest rates artificially higher?  Consider this.  30 year fixed interest rates are running around 5% with no points and no origination fee.  And banks lending rates (the Fed Funds Rate) is at it’s lowest ever, 0% to 0.25%.  Yet, almost 6 years ago, when the 30 year fixed rate were available at the same 5% with no point and no origination fees; the Fed Funds Rate for banks was running 3% to 3.25%.  The spread between consumer rates and banks more than doubled. 

Why are banks not sharing Washington’s efforts to reduce, even temporarily, fixed mortgage rates?  Interesting.

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