Atlanta Housing Source

What is going on with rates?

Former Federal Reserve Chairman Alan Greenspan wrote an op-ed piece in the Wall Street Journal titled

We had a great week for rates – I locked my clients. And good thing because rates are a little higher today.

Big evening on Capitol Hill last night… First, the Financial Reform Bill was finally reconciled between the House and Senate. The final draft includes a Consumer Financial Protection Agency, which will have the authority to police banks for mortgage lending and credit-card abuses. As you have probably been reading in our member benefit from IMMAAG, the Bill also proposes to end – or severely limit – the use of mortgage loans without documentation of income and assets.

There are also many new reforms put in place to reduce risks taken by large banks through derivatives and proprietary trading. The Bill is intended to avoid a repeat of the financial disaster that occurred during 2008 – 2009, but whether the Bill actually achieves this is not unanimous. The next step in the process is to have both the Senate and House vote on the final form of the Bill, then get it sent to the President for his signature. Stay tuned on this front.

Additionally – the extension of the Home Buyer Tax Credit through Sept 30th did not get passed last night. It was part of the larger Jobs Bill, which included State aid and an extension of unemployment benefits for people out of work more than six months – and would have added $33B to the deficit. The White House said that the President will continue to try and move the Bill through Congress, but should this Bill ultimately not get passed, around 200,000 people will fall off the Emergency Claims Benefit each week, rejoining the formal workforce, and therefore the ranks of the unemployed. Additionally, without the State aid, many already financially strapped states – who are required to balance their budget each year – will be forced to remove many government jobs.

As always, be on guard in this volatile trading environment.

Thank you for this contribution by:
Amy Wilemon
Mortgage Loan Officer
America Home Key
Phone: 404-601-4177
Cell: 404-368-4031
MLO#: 226390
awilemon@americahomekey.com