How will the mortgage-backed securities market function now that the Federal Reserve has ended its program to buy more than $1 trillion in securities?
The world’s biggest bond fund, Newport Beach-based Pacific Investment Management Co., says investors will keep mortgage rates down.
Here are excerpts of a Q & A on the PIMCO site with Scott Simon, managing director and head [...]
PIMCO: Fed’s retreat won’t spike mortgage rates is a post from: Mortgage Insider
The Federal Reserve removed one of the key props to the U.S. housing market last week when it stopped buying mortgage bonds from Fannie Mae and Freddie Mac.
According to Bloomberg News, the Fed bought $1.25 trillion worth of mortgage-backed securities over the past 18 months, providing a source for cash to lenders issuing mortgages.
Bloomberg reported, [...]
Fed halts purchase of mortgage bonds is a post from: Mortgage Insider
Mortgage rates are creeping up, as the yield on a 10-year Treasury hits 3.7% — the highest since August.
So how high might they go next year?
Mark Zandi, chief economist at Moody’s, tells CNBC.com rates should hit 6% by the end of 2010.
Rates on a 30-year fixed-rate mortgage have been under 5% for months.
Of course, much [...]
Honestly, I forgot the U.S. Treasury Department was buying mortgage-backed securities (MBS), since its program is much smaller than that of the Federal Reserve. Here’s an update from National Mortgage News (bold added):
The Treasury Department has purchased over $200 billion in Fannie Mae and Freddie Mac mortgage-backed securities to support the mortgage market, but now [...]
The House Financial Services Committee is expected to hold a hearing today on covered bonds backed by high-quality mortgages and consumer loans. Such bonds are used in Europe and some U.S. legislators think the bonds could help revive lending here, reports National Mortgage News. Here’s more:
Rep. Scott Garrett, R-N.J., is hoping the hearing will lead [...]
The House Financial Services Committee is expected to hold a hearing today on covered bonds backed by high-quality mortgages and consumer loans. Such bonds are used in Europe and some U.S. legislators think the bonds could help revive lending here, reports National Mortgage News. Here’s more:
Rep. Scott Garrett, R-N.J., is hoping the hearing will lead [...]
I didn’t hear any buzz this week as mortgage rates dipped as low as 4.5% with a one-point fee. Maybe it’s the holidays, or maybe there aren’t many people left who could benefit from a refinance unless rates fall even further.
Then rates nudged up late in the week as the yield on a 10-year Treasury [...]
The Wall Street Journal online reports on a talk by Brian Sack, the guy at the Federal Reserve who implements many of its market-tinkering programs.
Sack’s group estimates the Fed’s $300 billion in Treasury purchases helped push down rates on those securities by half a percentage point and its purchasing of mortgage-backed securities (it will eventually [...]
The credit crisis rolls on with this tidbit from National Mortgage News:
Banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. Federal Deposit Insurance Corp. Call Report information shows that most of the buyback demands fell on JPMorgan [...]
