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December 2nd, 2008

HSH’s Mrkt Trends — “Mortgage Relief for the Masses”

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Finally: Mortgage Relief for the Masses,” the latest issue of HSH’s Market Trends Newsletter, celebrates the long-awaited actions by the Fed to prop up Main Street. This was “precisely the kind of program we agitated for in last week’s Market Trends — a program which would improve the lot of the good-credit-quality borrowers who are being ‘asked’ to subsidize the rest.”

The Federal Reserve announced this week a plan to support good-credit quality mortgage markets like never before. A truly massive, $100-billion plan to buy up both Fannie and Freddie-issued debt — coupled with another $500 billion to snap up agency-backed MBS — produced an immediate effect in mortgage markets. From Monday’s to Tuesday’s close of business, conforming 30-year mortgage rates declined nearly a third percentage point and remained there on Wednesday.”

“While the Federal Reserve program is perhaps the single biggest influence on rates this week, we’d be remiss if we didn’t mention the huge retrenchment in benchmark 10-year Treasury yields. While their relationship to 30-year FRMs remains changeable and fractured in this environment, the decline in yield for the 10yr TCM from around 3.8% for much of this month, to Friday’s closing of 2.98%, is a precipitous drop and does help to pull rates down a bit as well.”

Read more about the impact of the Fed’s initiative in this week’s Market Trends. HSH’s free weekly Market Trends Newsletter, an in-depth analysis of various financial markets of the week prior, is published every Monday. Email subscribers — receive it in your inbox by Friday night, so sign up today! Also, be sure to check in with our Market Trends blog for all news relating to any weekly shift in mortgage rates.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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