Low mortgage rates will not last forever

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As long as Treasury is buying mortgages guaranteed by Fannie Mae and Fredie Mac, mortgage rates will remain near historic lows. Federal government is virtually the only purchaser of this type of securities, since private investors ran for cover in mid 2008 and never came back as viable players. If not for the Fed, there would be very few takers for financial products backed by US mortgages. Most of the experts predict that Treasury will gradually withdraw from buying large amounts of mortgage backed securities some time in 2010, most likely in 3rd and 4th quarter. So what happens when Uncle Sam stops buying our mortgages? Most likely the private banks that will replace federal government on the secondary mortgage market will charge much higher interest rates based on current (uncertain) economic situation.

Weekely Foreclosure Report

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Last week the foreclosure activity was high. 4 single family houses went under contract (sold) and 6 more entered the market. The following houses were listed in MLS since September 13th: