Mortgage Rates Surge to 5-Year High

Obama administration wants to get out of the mortgage market

(NEWSER) - The Obama administration will propose dissolving Fannie Mae and Freddie Mac and reducing the federal government’s role in the mortgage market, sources tell the Wall Street Journal . The White House is set to release three plans for moving forward without the government-owned mortgage giants, which originated nine out of every 10 loans last year. Advancing all three plans might prevent an all-out partisan brawl between conservatives, who blame Fannie and Freddie for the financial crisis, and liberals, who say borrowing costs will skyrocket without government help, according to one former Obama treasury official. More»

Proposal could save homeowners $85B annually

(NEWSER) - Help could be on the way for struggling homeowners with government-backed mortgages: The Obama administration is considering a proposal that would allow such homeowners to refinance their mortgages at today's interest rates, which hover around a low 4%. Many homeowners can’t currently refinance because they owe more than their house’s current value or have poor credit. Such a move could impact millions of homeowners and save them an estimated $85 billion a year, thus stimulating the economy by freeing up that money to be spent in other areas, the New York Times notes. More»

Critics think fallback agency will need a rescue in next couple of years

(NEWSER) - Another mortgage lender specializing in low income borrowers is in trouble: the Federal Housing Administration. The agency which oversees Fannie Mae and Freddie Mac could soon share their fate, as borrowers default on the low-downpayment mortgages it insures, critics told a House subcommittee yesterday. “It appears destined for a taxpayer bailout in the next 24 to 36 months,” said an ex-Fannie Mae executive. More»

(NEWSER) - The country’s top lenders are slowly implementing the Obama administration’s plan to help otherwise ineligible borrowers to refinance their mortgages at the current bargain-basement rates, the Wall Street Journal reports. The program is open to those with mortgages owned by Freddie Mac or Fannie Mae who are current on their payments, but who owe 80-105% of their home’s value. More»

Fed buys $10.2B in agency mortgage bonds

(NEWSER) - Interest rates on 30-year fixed mortgages fell to a record low 5.01% this week, Bloomberg reports. The drop—the 10th weekly fall in a row—comes as the Federal Reserve purchased $10.2 billion of mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae as part of a program to stimulate the mortgage market and reduce rates. Fixed rates for 15-year mortgages fell to 4.62%. More»