Big news was released earlier this week as once again the government has executed a plan to help reduce mortgage rates as well as people seeking loan modification. On Wednesday, The Fed met for their monthly FOMC meeting to discuss economic conditions and the future of the discount rate. The Fed announced that they will indeed be keeping the current discount rate at a range of 0-.25%, which was expected, but they continued to announce their new plan, which resulted in a huge upswing in trading, especially for banks.
The Fed plans to spend an additional $750 billion in purchasing mortgage backed securities from housing agencies such as Fannie Mae and Freddie Mac. In addition to that, The Fed will also be spending $300 billion on the purchasing of US Government bonds.
The announcement on Wednesday sent stocks flying and Treasury interest rates crashing. In turn, the lowering of Treasury rates should lead to a significant reduction in mortgage rates. This is great news for anyone seeking... more
