Taking me up on my offer to publish pertinent and helpful info of interest to my readers, i.e. San Francisco home buyers and sellers, Frank Sandoval, mortgage broker extraordinaire of Pacific Bay Financial has sent over his take on the mortgage news and how it affects us here in the City by the Bay.
“Mortgages are in the news again, but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels seen since April.
You’ve probably heard that Fannie Mae and Freddie Mac were taken over or “bailed out” by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations.
These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated.
As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.
With the Treasury stepping in to provide a “backstop” for the mortgage giants, investors now have confidence to purchase Mortgage Bonds. And the greater interest has helped lower interest rates today.”
Frank Sandoval is an excellent mortgage broker. My clients have happily worked with him many times over the years. For more info, visit his website.