Fed's QE3 Should Soften G-fee's Impact
Gumbinger expects that there could be downward pressure of as much as 25 basis points on rates because of QE3. In case originations slow down to the extent that the Fed controls a larger share of the market, there could be an even bigger impact on rates.
Credit is more of an issue
For the week ending September 28, HSH.com's weekly mortgage rates survey found that the average rate on a conforming 30-year fixed-rate mortgage was down to 3.50 percent. As of Monday, October 1, that average fell to 3.41 percent.
But as Gregg Busch, vice president with First Savings Mortgage Corp. in McLean, Va., points out, at this point it is not so much about interest rates as it is about access to lending.
"Until underwriting guidelines loosen up a little bit more, the housing market will just continue slowly and gradually improving," says Busch. "Lenders have tightened up their guidelines considerably. So right now I don't see 3 percent interest rates being any better than 3.5 percent because people just can't get mortgages."
Borrower optionsFor borrowers who would like to avoid any impact as a result of the upcoming g-fee hike, one option might be to turn to portfolio lenders. These lenders, such as banks that don't sell their loans to Fannie Mae and Freddie Mac, will not be impacted by the g-fee hike.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV