Washington Report: Rate Reduction Proposals, reports that there was a lot of talk last week about the Treasury Department and the real estate industry's desire for widescale rate reductions for home purchases. In one scenario, a government agency would purchase 30-year mortgages at a below-market fixed interest rates. There is potential for the Treasury to make money through a program of this type - by selling securities to bond investors at 3% rates and then acquiring privately-originated mortgages at 4.5%. Another option is for the government to pay loan discount "points" or fees. The goal is to pull people into the housing market to stimulate construction and move unsold inventory. As you could imagine, 4.5% interest rates could motivate a lot of people to get off the fence and buy.
http://realtytimes.com/rtpages/20081208_washingtonreport.htm
http://realtytimes.com/rtpages/20081208_washingtonreport.htm
