4.5% interest rates should clear the matter up
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Under the plans-that-don’t-make-a-lot-of-sense category (which is bulging to overflow these days) ... handing out 4.5% interest rates to people who may not really need them. Reports out late Wednesday included this on CNNMoney.com:
Lobbyists are pushing the Treasury Department to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to as low as 4.5%, an industry source said. Similar to an effort unveiled last week by the Federal Reserve, the proposal calls for Treasury to buy securities backed by 30-year fixed-rate mortgages from Fannie Mae and Freddie Mac. Details on the plan remain sketchy, but an announcement could come as early as next week, the source said.
More from the Associated Press on latimes.com about the proposal, which would drop rates by about a percentage point:
‘The goal is [to] drive mortgage rates so low that home prices not only stop falling but begin to rebound,’ said Greg McBride, senior financial analyst at Bankrate.com.Though the plan, if enacted, would help anybody looking to buy or sell a home or refinance out of an expensive mortgage, it may not help those whose credit is so damaged that banks don’t want to lend to them.’It may change the number of borrowers seeking loans, but it won’t change the qualifications for who gets those loans,’ McBride said.
OK. So remind me again how this makes things better.
--Lauren Beale
Thoughts? Comments?
