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September 12th, 2012

Mortgage-rate decline continues

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Whats NextAccording to the latest mortgage rates report from HSH.com, rates on the two most popular types of mortgages ticked even lower last week.

The Weekly Mortgage Rates Radar reports that the average rate for conforming 30-year fixed-rate mortgages fell by two basis points (0.02 percent) to 3.69 percent. Conforming 5/1 Hybrid ARM rates also decreased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at average of 2.69 percent.

“Uncertainty in terms of both economic improvement and the Fed’s action or inaction following their two-day meeting this week has kept downward pressure on mortgage rates,” said Keith Gumbinger, vice president of HSH.com. “The economy needs to add far more jobs each month in order to move forward, but that doesn’t seem likely, at least not at this time.

“Will the Fed unveil an entirely new program, tweak an existing one or announce no move at all? At the moment, odds are probably 50-50 that the Fed stays the course; a stronger employment report on Friday might have made that perhaps 60-40 in favor of holding steady. All things considered, any actions by the Fed take time to work their way through the economy, and that includes low interest rates.”

HARP 3.0?

As we wrote yesterday, historically low mortgage rates in conjunction with an expanded HARP program (HARP 2.0) have kept the refinance machine running. Over 519,000 mortgages have been refinanced in the first seven months of 2012.

Could we see the refinance numbers increase even more?

It’s certainly possible, especially if the White House continues to push for an even more expanded version of HARP (HARP 3.0, anyone?).

According to Bloomberg:

The White House is urging the U.S. Senate to vote as soon as this week on an expansion of a government mortgage-refinancing program, a move that could showcase President Barack Obama’s support for policies aiding homeowners before the Nov. 6 presidential election.

Democratic leaders are considering adding the measure expanding the Home Affordable Refinancing Program to their agenda for the two-week Senate session that begins today, according to Senator Barbara Boxer of California and Senator Robert Menendez of New Jersey, who wrote the bill.

As we alluded to yesterday, this particular bill hasn’t officially been dubbed HARP 3.0, but there have been several attempts so far this year to expand HARP’s availability to an even greater audience all the while striving to make the process easier for those who do qualify.

Will the president be able to squeeze in one more refi plan before the elections? We’ll see.

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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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