Does 2.25% Fed Rate Help the Mortgage Market?

Today I ordered wholesale rate sheets from couple lenders and turns out that the rates vary a lot between lenders and states. In state of CA you'll have same 30 year fixed rate range from 5.875% - 6.5%. State of FL had 30 year fixed rate range from 5.625% - 6.375% and northeast states 30 year fixed rate ranged from 5.50% - 6.75%. Turns out that lenders who use their own money offer better rates and terms. I've found some offering as low as 5.25% 30 year fixed no points. All loans were based on $200,000 loan amount. No point loans.
I suggest all borrowers shopping around before locking into anything. The chances are there are better rates out there than the one you've been offered right now.

MBA Fights Two Percent Mortgage Interest Rate "Tax"

WASHINGTON, DC – David G. Kittle, CMB, Chairman-elect of the Mortgage Bankers Association testified today before the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law.In his testimony, Kittle told the committee that proposed legislation to reform the bankruptcy code and allow judges to “cramdown” debt on primary residential mortgages will impose significant costs on consumers by restricting the flow of capital into the mortgage market and increasing the price tag on all mortgages.“If you chip away at the security created on home mortgages–and this bill is not a small chip, it is a sledgehammer attack—you chip away at the entire core of the mortgage finance system,” said Kittle. “In order to account for the added risk you will add significant costs to obtaining a mortgage. If this bill becomes law, we believe mortgage rates would jump significantly, going up 1½ to 2 points for everyone taking out a loan.”Today’s hearing focused on H.R. 3609, the Emergency Home Ownership and Mortgage Equity Protection Act of 2007. H.R. 3609 would allow judges under Chapter 13 bankruptcy proceedings to unilaterally mark down the value of a primary mortgage from its full amount down to the fair market value of the home. The bill would also give judges free reign to change the other terms of the loan, including the interest rate or the length of the loan.“What does that mean?” asked Kittle. “Assume you take out a 30 year fixed rate mortgage loan for $300,000 in today’s market. If you are a prime borrower you will receive a rate of about 6% with no points, giving you a principal and interest payment of about $1800 per month.”“If you pass this bill we estimate that the same loan with the same terms could cost as much as 8%,” continued Kittle. “That increases your payment to about $2,200 per month. This will be an increase of $400 per month, $4,800 per year, for a total of over $144,000 over the life of the loan. This is a massive back-door tax increase on homeowners.”

More info:
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