Mortgage Refinance Answers

The government mortgage refinance plan was created to make sure that all Americans have access to historically low mortgage rates. Some home owners had the opportunity to refinance close to or under 4.5%. Countrywide received an incentive payment from the government for every loan modification they approve, and the government will help with any lost revenues due to the loan modifications. The new chairman of the Federal Reserve, Ben Bernanke, has indicated that further hikes in interest rates may be on the cards. While overall rates were heading down, the 10 year treasury yield was heading higher.Anyone who knows anything about the credit market knew that the declining, low mortgage rates would not last.

After 25 years of steadily declining interest rates, people forgot about, or never knew about the risk of rising interest rates and what it would do to their housing payments. The government continues to auction off treasury bonds to push the 10 year treasury rate lower, but eventually they are not going to be able to keep doing this at a record pace. The scary part of all this is, how the heck would they know? Over the course of a three week period, home rates went from 4.8% to over 5.6%. Last week we saw a HUGE jump in mortgage rate; a jump of almost 50 basis points.

Some individuals feel that conforming loans will actually have a higher interest rate due to the simple fact that they will be for higher values than they were before. Sadly this is a great play on the pressures and emotions we home owners are feeling in this mortgage time of crisis. If anyone is to blame for this mess it is President Obama and Ben Bernanke.If they would have let rates been set by the free market system we would not be seeing a spike like this.

Last Wednesday, the market saw mortgage rates spike by as much as 1 percent. The federal government has set up a government loan modification program, but how do you know if you are eligible for this foreclosure assistance program.

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