Comments on: Mortgage Rate Spreads http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 16:30:00 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Theodore D. http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134989 Theodore D. Sun, 21 Dec 2008 02:58:50 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134989 I got about 125K in student loan debt. Does anyone know any way for me to take advantage of these super low rates? How come no one in talking about student loan debt and the cost of higher education now-a-days? It seems like education is still way to overpriced and I imgine now is the time to get into that market so you'd think we'd be hearing more about this. I got about 125K in student loan debt. Does anyone know any way for me to take advantage of these super low rates? How come no one in talking about student loan debt and the cost of higher education now-a-days? It seems like education is still way to overpriced and I imgine now is the time to get into that market so you’d think we’d be hearing more about this.

]]> By: Winston Munn http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134952 Winston Munn Sat, 20 Dec 2008 16:51:16 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134952 Wunsacon, I am not condemning Ben and Co. However, what they are doing is trying to create inflation to fight the threat of deflation. Inflation is defined as a general rise in prices. Therefore, their manipulations are defined as an attempt to force prices higher. Wunsacon,

I am not condemning Ben and Co. However, what they are doing is trying to create inflation to fight the threat of deflation. Inflation is defined as a general rise in prices. Therefore, their manipulations are defined as an attempt to force prices higher.

]]> By: Clay http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134949 Clay Sat, 20 Dec 2008 16:32:46 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134949 Yesterday, my real estate broker in Cleveland County, NC told me she saw 30 yr fixed mortgage rates in the mid to upper 4% range just recently. Cleveland County is 2 counties west of Mecklenburg County (where Charlotte, NC is located and where I live). Yesterday, my real estate broker in Cleveland County, NC told me she saw 30 yr fixed mortgage rates in the mid to upper 4% range just recently. Cleveland County is 2 counties west of Mecklenburg County (where Charlotte, NC is located and where I live).

]]> By: ottovbvs http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134920 ottovbvs Sat, 20 Dec 2008 12:31:14 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134920 "Mike in Nola Says: December 19th, 2008 at 8:59 pm otovbvs: Trouble is, those who need the refi’s to avoid foreclosure still won’t qualify for the good rates." It's better to light a candle than curse the dark. This is not going to end foreclosures but it's going to make it easier to refi some marginal borrowers who are in trouble. As I said it's not a silver bullet but a mitigation and on the basis of that a positive move. “Mike in Nola Says:

December 19th, 2008 at 8:59 pm
otovbvs:

Trouble is, those who need the refi’s to avoid foreclosure still won’t qualify for the good rates.”

It’s better to light a candle than curse the dark. This is not going to end foreclosures but it’s going to make it easier to refi some marginal borrowers who are in trouble. As I said it’s not a silver bullet but a mitigation and on the basis of that a positive move.

]]> By: wunsacon http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134905 wunsacon Sat, 20 Dec 2008 03:52:12 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134905 >> the Fed in essence is adopting the position that house valuations are normal but current interest rates are not Winston, I don't think that's it. Whatever they might say publicly so as not to sound alarmist, I infer that they're just trying to soften the crash as much as possible. No matter how bad things are or are going to be, Ben&Co. are softening the blow by reducing rates. At least, that's my interpretation... >> the Fed in essence is adopting the position that house valuations are normal but current interest rates are not

Winston, I don’t think that’s it. Whatever they might say publicly so as not to sound alarmist, I infer that they’re just trying to soften the crash as much as possible.

No matter how bad things are or are going to be, Ben&Co. are softening the blow by reducing rates.

At least, that’s my interpretation…

]]> By: Winston Munn http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134901 Winston Munn Sat, 20 Dec 2008 03:34:25 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134901 There are a couple problems. Without an MBS market, banks have to hold their own mortgage loans. With rates so low and holding all the risk, a bank will - if it does lend - only lend to the best of the best credit risks. For the less-than-perfect-creditor, why should the bank take any risk at all and lend on a still potentially overvalued asset for 30 years at 4.5% when the bank can borrow money for virtually nothing from the Fed, buy 24 month treasuries at 0.74 yield, hoard the notes, and collect the extra 0.25% the Fed pays on excesss reserves for a totally risk free return of 0.99%? There are a couple problems. Without an MBS market, banks have to hold their own mortgage
loans.

With rates so low and holding all the risk, a bank will – if it does lend – only lend to the best of the best credit risks.

For the less-than-perfect-creditor, why should the bank take any risk at all and lend on a still potentially overvalued asset for 30 years at 4.5% when the bank can borrow money for virtually nothing from the Fed, buy 24 month treasuries at 0.74 yield, hoard the notes, and collect the extra 0.25% the Fed pays on excesss reserves for a totally risk free return of 0.99%?

]]> By: Mike in Nola http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134887 Mike in Nola Sat, 20 Dec 2008 01:59:50 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134887 otovbvs: Trouble is, those who need the refi's to avoid foreclosure still won't qualify for the good rates. otovbvs:

Trouble is, those who need the refi’s to avoid foreclosure still won’t qualify for the good rates.

]]> By: ottovbvs http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134881 ottovbvs Sat, 20 Dec 2008 01:23:30 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134881 It's conceivable you're going to see the 30 year fixed in the high fours. There's already been a bit of spurt in refis and it's going hot up some more if we see a 30 year at say 4.75. I'd refi at this level or maybe even contemplate a move. BR or someone was pooh poohing refis yesterday but overall they will do some good in freeing up income, stemming some foreclosures, lubricating the general market, and mopping up some inventory. It's not the silver bullet but overall its a mitigation so why complain. It’s conceivable you’re going to see the 30 year fixed in the high fours. There’s already been a bit of spurt in refis and it’s going hot up some more if we see a 30 year at say 4.75. I’d refi at this level or maybe even contemplate a move. BR or someone was pooh poohing refis yesterday but overall they will do some good in freeing up income, stemming some foreclosures, lubricating the general market, and mopping up some inventory. It’s not the silver bullet but overall its a mitigation so why complain.

]]> By: Mike in Nola http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134873 Mike in Nola Sat, 20 Dec 2008 00:34:13 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134873 Home sales here in Houston have dropped by almost third over last year. Based on what I've read throughout the year, almost all of the drop has come here in the past couple of months. Because of the oil boom and generally inexpensive housing, Houston had been pretty insulated from the crash. Seeing more and more for sale signs in the better neighborhoods. Home sales, prices drop sharply in Houston http://www.chron.com/disp/story.mpl/hotstories/6167609.html leftback: Here's an article from the Houston Chronicle backing up what you said: http://www.inman.com/buyers-sellers/columnists/loubarnes/the-45-mortgage-myth Home sales here in Houston have dropped by almost third over last year. Based on what I’ve read throughout the year, almost all of the drop has come here in the past couple of months. Because of the oil boom and generally inexpensive housing, Houston had been pretty insulated from the crash. Seeing more and more for sale signs in the better neighborhoods.

Home sales, prices drop sharply in Houston
http://www.chron.com/disp/story.mpl/hotstories/6167609.html

leftback: Here’s an article from the Houston Chronicle backing up what you said:

http://www.inman.com/buyers-sellers/columnists/loubarnes/the-45-mortgage-myth

]]> By: gardenofideas http://www.ritholtz.com/blog/2008/12/mortgage-rate-spreads/comment-page-1/#comment-134856 gardenofideas Fri, 19 Dec 2008 23:04:33 +0000 http://www.ritholtz.com/blog/?p=13292#comment-134856 Just locked in 4.5% fixed, 1 point. Can hardly believe it. Just locked in 4.5% fixed, 1 point. Can hardly believe it.

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