When the government nationalized mortgage lending in September, housing analysts predicted lower mortgage rates.For a brief two-week stint, they were right -- post-takeover, the 30-year, fixed rate mortgage fell below 6.000 percent nationally for the first time in 7 months. Since then, however, mortgage markets have reversed.  Rates are now at pre-takeover levels. Now, this isn't to say that the nationalization was a failure -- far from it.  The government's takeover of Fannie Mae and Freddie Mac accomplished two very important goals: It restored failing confidence in the U.S. ...

The Federal Open Market Committee voted to cut the Fed Funds Rate by one-half percent today.  The benchmark rate now stands at 1.000 percent.In its press release, the Fed wasted no time addressing the key issue at-hand, stating that economic activity has "slowed markedly", pointing to three main causes: Consumer spending is falling Business equipment spending is falling Slowing foreign economies are hurting U.S. businesses Furthermore, the voting FOMC members are wary of an "intensification" of the current financial market turmoil. The announcement's 4th ...

The Federal Open Market Committee adjourns from its scheduled 2-day meeting today at 2:15 P.M. ET and the markets are eagerly awaiting the central bank's press release.In it, Fed Chairman Ben Bernanke is expected to address the U.S. economy, the future of credit, and the new Fed Funds Rate. It's this last point to which mortgage rate shoppers should pay attention -- when the Fed Funds Rate falls, mortgage rates tend to rise. The inverse relationship between mortgage rates and the Fed Funds Rate is based on the idea that cuts to the Fed Funds Rate are designed to add gas to U.S. ...

Monday afternoon, the U.S. House of Representatives defeated the $700 billion "Bailout Bill", surprising Wall Street and the world. The Dow Jones Industrial Average responded by falling 777.68 points -- its largest one-day loss in history and, this morning, every newspaper in America is covering the story as front page news.  Lost in the coverage, however, is how the "No" vote created a terrific opportunity for mortgage rate shoppers.  Yesterday, as money fled the tanking stock market, most of it ended up getting parked in the relative safety of government-backed bonds which ...

Mortgage markets followed the recurring trading pattern of 2008 last week -- volatility, volatility, and more volatility.After opening with a strong performance that drove rates down, late-week fears of a global recession reversed that path.  Mortgage rates ended the week unchanged. This was an unexpected outcome for the week considering that: The dollar gained 5%, making bonds "worth more" Oil fell 11%, helping to spur consumer spending LIBOR dropped slightly, signaling a credit thaw Each of the above factors usually helps to generate new demand for mortgage bonds, pressuring ...

Statistics are what you make of them, but sometimes, they can provide good perspective. For example, from its peak in 2005 to its trough in late-2007, the number of "used" homes sold nationwide plunged. In 2005: Roughly 7 million homes sold annually In 2007: Roughly 5 million homes sold annually Through all of 2008, though, Existing Home Sales volume has been essentially flat.  Some months up, some months down, but always hovering near the 5 million unit mark. The data from September is no different.  For the 13th consecutive month, the number of home resales nationwide ...

According to foreclosure-tracking service RealtyTrac, the foreclosure rate is falling nationwide. Versus August, foreclosures fell by 12 percent in September 2008 as more than half of the states showed month-over-month improvement.  Most interesting in the data is that several states that led the foreclosure boom in 2007 now appear to be leading the charge out of it. For example: In Arizona, foreclosures are down 9.43 percent In California, foreclosures are down 31.64 percent In Colorado, foreclosures are down 6.22 percent In Illinois, foreclosures are down 5.14 ...

In the widest definition possible, amortization (pronounced: am-ohr-tih-ZAY-shun) is the scheduled process by which a loan's principal balance pays down to $0.The opposite of an amortizing loan is an interest only loan for which there is no scheduled principal repayment schedule. With respect to mortgages, amortization is what determines how much of a monthly payment goes to principal, and how much goes to interest.    Amortization schedules are the same for all fixed rate, non-interest only home loans including 15- and 30-year fixed rate mortgages, as well as all non-interest only ...