The Veridian Blog

Last week's news about the unemployment rate increasing to 6.1% certainly helped bonds, but the effect on mortgage rates really wasn't felt until this morning when the federal government seized the troubled government sponsored enterprises (GSE) Fannie Mae and Freddie Mac.  The two companies will be placed under conservatorship and the US Treasury will provide up to $200 billion in capital to bail out the GSEs.  The taxpayer cost has not yet been determined – but it certainly looks like the makings of another kink in the American economy.   Equities initially skyrocketed on the news, but has since come down to reasonable levels.  Bonds have not fared well, however, in another example of the disintegrating connection between Treasuries and mortgage rates, this morning’s loan programs have sunk to 6-month lows… go figure.  This is a relief and welcome sight to lots of us in the real estate industry and let’s just hope it lasts for at least a few days… our no-cost 30-year fixed is down below 6.0% once more...