Treasury May Lower Mortgage Rates to 4.5%

Rates could go as low as 4.5% to curb falling home prices
By Ambreen Ali,  Newser User
Posted Dec 3, 2008 4:36 PM CST
Troy Courtney stands on the porch of his foreclosed California home. Lower mortgage rates could revive the slumping housing market.   (AP Photo/Noah Berger)
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(Newser) – The Treasury may try to bring new mortgage rates down to 4.5%—a full percentage point lower than current rates—to revitalize the housing market, the Wall Street Journal reports. Under the proposal, which is still in the early stages, the department would use Fannie Mae and Freddie Mac to lower the rates. The idea comes after months of struggling to hatch a plan to reduce foreclosures and stem falling prices without directly bailing out borrowers and lenders.