As expected, the Federal Reserve cut rates yesterday. The .25% decrease in the rate was not enough for some investors, who were betting on a .50% cut in light of the current state of the financial markets. Initially that cut drove mortgage rates slightly down on Tuesday. However, the announcement today that the Fed has entered into a deal with European, England, Canadian, and Swiss Central banks to create a temporary auction facility to keep banks funded has really driven the stock market back up, which is causing mortgage rates to hold steady.
Another direct result of the credit crunch has been the implosion of several (as of December 12th) lenders who have closed their doors. A majority of these closures have been smaller regional resellers-people who fund the loan and sell it on the mortgage market. The rest of the closed lenders have been large subprime offices and in some cases large national banks.
Thankfully most of the lenders that are gone were not someone we had in our portfolio to originate loans to. On the other spectrum, I have several lenders doing good business that are EXPANDING! I say all of this to prove a point-if you walk into a bank you most likely have 1 product and 1 underwriting system. As a broker, I have NUMEROUS products and 40-50 different underwriters I can work with, which means I can find the BEST fit, unlike a bank where they give you their ONLY fit.
If you are looking for someone who is plugged into the market and can find the best loan for YOUR situation, not theirs, give Texas Mortgage Team a call -you will be glad you did.
The Federal Reserve dropped the federal funds rate by one-quarter point to 4.25 percent. The rate reduction is the third this year. The Fed also lowered its lending rates to banks by one-quarter-percentage point to 4.75 percent. That was the fourth cut to the discount rate since mid-August. Both the funds rate and the prime rate are now at their lowest levels in nearly two years.
Craig Pollard is a mortgage professional and owner of Texas Mortgage Team. He specializes in the Dallas Fort Worth area and is a frequent voice on Texas Home Central’s blog. Craig can be reached at CPollard@Texasmt.com or 972-317-9900
This entry was posted on Wednesday, December 12th, 2007 at 9:19 am and is filed under Housing Market, Money Matters, Refinance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.