Marc's Mortgage Matter's

Last night the European Central Bank delivered the biggest interest-rate cut in its 10-year history by cutting their benchmark lending rate by 75 basis points to 2.5%. And here in the United States, lobbyists are pushing the Treasury Department to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to as low as 4.5%. How? As we saw last week, an increased demand for mortgage-backed securities would prompt mortgage rates to drop, which enables homeowners to refinance into lower-cost loans and make it cheaper for potential homebuyers to get into the market. Of course, the plan is not without its critics, especially since the markets have naturally pushed rates higher since last week. They say that only a narrow slice of credit-worthy borrowers would benefit, and the proposal would do little to help troubled borrowers who have fallen behind on their payments, have no equity in their homes or have lost their jobs. And remember those tight guidelines! 

In the event anything close to this pans out, and we have an opportunity to lower your rate by anything close to such levels, I will be contacting you if you're on my radar. If you have not heard from me in the past 12 months make sure to email me or call as you may have fallen into the do not disturb category ;)

The three big domestic automakers are now saying they are working jointly on a new hybrid car. It runs on a combination of state and federal bailout money. Tuesday marked the major automakers' deadline to submit restructuring plans as part of its $25 billion bailout package. (Conan O’Brien quipped, “A new study found that the Ford Motor Company makes the cars with the highest safety rating of all cars. Apparently, Ford cars are so safe because they never leave the dealer's lot.”)

The big 3 Detroit automakers now say they need $34 billion to fix the industry. The base price is still $25 billion, but they say they need another $9 billion for parts and labor. Sure, and I need only $1.2 billion to pay off my Visa and Discover credit cards!