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If you are thinking of getting a mortgage and want to know what will happen to mortgage rates next year, keep your eyes on the Fed.
A forecast by the Mortgage Bankers Association predicts that the 30-year fixed rate will remain below 4 percent through the first half of the year. The forecast assumes that the Fed will keep the third round of quantitative easing, its mortgage bond-buying program, alive.
But what if the Fed pulls the plug on QE3? Rates would likely rise without notice.
Mortgage rates have dropped about a quarter of a percentage point since the Fed announced it would spend $40 billion a month in mortgage bond purchases, says Michael Fratantoni, MBA's vice president of research and economics.
"That was enough to take our refi application index to the highest level in four years," he told reporters at the MBA's annual conference. "A lot of that refi volume is going to spill over to (the first half of) 2013."
Based on the MBA's estimates, the Fed will buy 36 percent of all mortgages originated in 2013, says MBA's chief economist Jay Brinkmann.
"The Fed's purchases during the second half of 2013 could approach 50 percent of all mortgages originated in the last six months of the year," he says.
Any doubts about who rules the mortgage world?
US Bank called me every week for about two months to get me to apply for the lower rate. After paying the fees, they would not give me a loan due to being underwater. My appraisal was exactly alike what appeared on Zillow. If I can find the approximate value online, the bank can. I consider it predatory lending, as they contacted me knowing I most likely would not qualify. I have been in my home 14 years, no late payments. They knew I was underwater and would not qualify,yet badgered me to apply so they could make loan application fees, and pay the appraiser that most likely just looked on Zillow too!
I lost my job in the 2009 downturn, hence delinquent on my mortgage. After more than one year of frustrating requests, Bank of America offered a modification but @ 7.125 interest rate resulting in more than twice pre-deliquency mortgage payment - excessive on my earnings. Please advice on how to get assistance for interest rate reduction. my loan investor is Bank of NY & not Freddie Mac backed.
Thanks, Ozz
what Haunted Mansion does this picture represent??????
This time of year, business school candidates are starting to interview with their target MBA programs.
Low mortgage rates!! When my wife lost her job CHASE would not remodify or refinance my mortgage! How can anybody take advantage of these low rates! Big bank bailout what a fraud! Government told banks to HELP troubled home owners. WHAT A JOKE!!!
You read Feds statement today--- 2013 doesn't matter.