Improvements to the
Mortgage Modification
Plan
As the Federal Reserve prepares to wind down its commitment to purchase $1.25 trillion in mortgage-backed securities, mortgage rates remained below 5% for the third consecutive week. As expected, Federal Reserve reiterated its stance earlier this week to end the program on March 31.
Soon after, Freddie Mac reported the average mortgage rate on a 30-year fixed-rate mortgaged inched up a modest.01% to 4.96% for the week. The Federal Reserve's program has kept rates artificially low for more than a year, so it will be interesting to see what mortgage rates will do come April 1.
Taking Advantage of the Low
Mortgage Rates
Just three months ago, mortgage rates dipped to a record low of 4.71%. On Tuesday, the Reserve issued a press release stating, "The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability." Many mortgage analysts are concerned rates will spike once the program ends.
However, many other mortgage analysts have strong convictions in the Reserve's recent declarations, and for good reason. It's highly unlikely the federal government would allow the housing market to collapse again after showing compelling signs of recovery as a result of its efforts.
Flexibility Options With Mortgage Life Insurance
Nonetheless, the housing market remains very fragile. The stability of the housing market is vital in the recovery of the economy as a whole. By leaving the door open to purchasing additional mortgage-backed securities down the road, the Federal Reserve appears prepared to do its share.
