Comments on: Mortgage applications tank as interest rate goes over 5% http://blownmortgage.com/2009/01/23/mortgage-applications-tank-as-interest-rate-goes-over-5/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Sat, 07 Nov 2009 02:53:18 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: structured settlement http://blownmortgage.com/2009/01/23/mortgage-applications-tank-as-interest-rate-goes-over-5/comment-page-1/#comment-61753 structured settlement Thu, 30 Apr 2009 01:23:30 +0000 http://blownmortgage.com/?p=2143#comment-61753 Your blog is interesting.I like your writing style.If you want to exchange link with me please contact by mail. Your blog is interesting.I like your writing style.If you want to exchange link with me please contact by mail.

]]> By: Constantine von Hoffman http://blownmortgage.com/2009/01/23/mortgage-applications-tank-as-interest-rate-goes-over-5/comment-page-1/#comment-14221 Constantine von Hoffman Sat, 24 Jan 2009 00:48:25 +0000 http://blownmortgage.com/?p=2143#comment-14221 Who is this Fielding Mellish person and what does he keep saying things I agree with? That's the real mystery. Who is this Fielding Mellish person and what does he keep saying things I agree with? That's the real mystery.

]]> By: Fielding Mellish http://blownmortgage.com/2009/01/23/mortgage-applications-tank-as-interest-rate-goes-over-5/comment-page-1/#comment-14220 Fielding Mellish Fri, 23 Jan 2009 21:02:30 +0000 http://blownmortgage.com/?p=2143#comment-14220 The Fed's unprecedented foray into manipulating mortgage rates, while costing $56 billion so far (and $444 B left to go), has not nudged many people into buying a home (for the obvious reason that prices are still falling). What's also interesting is how little refinance borrowers' cash flow is affected by refinancing: If someone has a $200k loan at 5.875% with 28 years left and they refi onto a $205,000 30 year fixed @ 4.875%, their P&I drops from $1,214.53 to $1,084.88. So their payment goes down by $130. That's a fairly minor payment adjustment, in my opinion. It certainly wouldn't incent many people to go buy an SUV and save GM from bankruptcy. Not to mention that the only people who qualify for conventional refinances nowadays are already sitting pretty with equity in their homes.<br><br>Whenever the Fed is done buying agency MBS's, rates will spike up, which means that the present value of those $500B in MBS's will drop to...?...$450B? That's a pretty big cost just for the government to subsidize the refinance rates of people who were already in pretty good financial shape - with lots of equity in their homes. The Fed's unprecedented foray into manipulating mortgage rates, while costing $56 billion so far (and $444 B left to go), has not nudged many people into buying a home (for the obvious reason that prices are still falling). What's also interesting is how little refinance borrowers' cash flow is affected by refinancing: If someone has a $200k loan at 5.875% with 28 years left and they refi onto a $205,000 30 year fixed @ 4.875%, their P&I drops from $1,214.53 to $1,084.88. So their payment goes down by $130. That's a fairly minor payment adjustment, in my opinion. It certainly wouldn't incent many people to go buy an SUV and save GM from bankruptcy. Not to mention that the only people who qualify for conventional refinances nowadays are already sitting pretty with equity in their homes.

Whenever the Fed is done buying agency MBS's, rates will spike up, which means that the present value of those $500B in MBS's will drop to…?…$450B? That's a pretty big cost just for the government to subsidize the refinance rates of people who were already in pretty good financial shape – with lots of equity in their homes.

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