Rates wait on Fed

Tuesday, Nov. 3
Written 10:30 a.m. EDT

RATES: Mortgage rates seem to have been remarkably steady in the last week, possibly because investors are waiting to hear what the Fed's rate policy committee has to say. The committee meets today and tomorrow, with the rate policy statement coming at 2:15 eastern time Wednesday.

It's anybody's guess what the Fed will say and how the mortgage market will react. If you're not a risk-taker as far as mortgage rates go, and if you're closing within a week or two, you might consider locking your rate before the Fed's rate policy announcement.

CRA AND CRE: Paul Krugman points out that a lot of folks blame the mortgage meltdown on the Community Reinvestment Act and the influence of Fannie Mae and Freddie Mac. But if the CRA and Fannie/Freddie were the villains responsible for the residential real estate crash, what accounts for the commercial real estate crash? Commercial mortgages weren't affected by the CRA or Fannie or Freddie.

BAIR MARKET: Sheila Bair, chairman of the FDIC, tells an audience at Kansas State University that we need better consumer protection in financial services. "It is important to understand that many of the current problems affecting the safety and soundness of the financial system were caused by a lack of strong, comprehensive rules against abusive practices in mortgage lending," she says.

Technical innovation and greater access to credit are fine, Bair says, but "I also see too much emphasis on credit availability at the expense of products and services that help build wealth."