Senate Republican leader proposes 4% mortgages

Feb 03, 2009 5 Replies
B

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Proposes Cheap, Government-Backed Mortgages to StimulateEconomy



Government involvement in the mortgage market is one of the causes of the present economic mess, and I do not think this proposal is a good idea. On a personal level, I am in the process of refinancing a 5.5%



15-year fixed rate mortgage to a 4.625% rate with 1 point. Now I wonder whether to pull the application and see whether the proposal becomes part of the boondoggle (ahem, stimulus plan).
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R

Getting a lower rate will involve paying more points. You have a good deal now.

-- Ron

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R

I just got the following in an email message from my bank: "The appraisers are taking about 3-4 weeks to do appraisals right now because of all of the refinancing going on. "

-- Ron

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I

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McConnell Proposes Cheap, Government-Backed Mortgages to Stimulate > Economy>

How likely is any Republican proposal to pass?

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B

Unlikely as a stand-alone measure, but possible as the price for getting a few Republican senators on board and preventing a filibuster of the "stimulus" plan.

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D

I think I agree with your characterization. IMO, the headline is "Due to bank CEO's idiocy and greed, free markets have been temporarily suspended." The link below charts prime v. mortgage rates back to 1992

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The spread varies, but it looks like it usually stays within a 2% range. Prime is currently 3.25%, so legislating the rate to 4% would not be out of line, it would seem, but I have little idea how banks run their books, nor what would happen if prime goes to 7% three years from now.

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