Mortgage rates have fallen consecutively over the past two weeks. Today saw disappointing employment data released that further pushed mortgage rates closer to all time historic lows. While the employment data wasn’t entirely negative with 96,000 new jobs nationwide last month, it was lower than forecasted and confirmed an overall slowdown in job growth throughout 2012. Other data employment data released showed that unemployment fell to 8.1% and labor force participation fell to 63.5%, which is the lowest number since the 1980′s.
QE3: Quantitative Easing Round Three
While economic data that comes out each week will point to a stronger or weaker economy, the bigger question for months would be if the FOMC (Federal Open Market Committee) would engage in a third round of quantitative easing or QE3 when they meet next week. Each time poor economic data is released, pundits point toward the liklihood that QE3 will occur and when positive data is released, other pundits cry that there will be no QE3.
The truth is that nobody knows for sure whether the FOMC will do next, but the latest round of disappoining data is yet one more point for the “will enact” QE3 column.
FHFA (Federal Housing Finance Authority) Announces Increase in Guarantee Fees
The FHFA (Federal Housing Finance Authority) recently announced that new increased guarantee fees will be put in place for Fannie Mae and Freddie Mac loans. Guarantee fees are the fees that mortgage backed securities charge lenders for the processing and handling of mortgage backed bonds. These fees are expected to slightly push the rates lenders charge higher.
“These changes will move Fannie Mae and Freddie Mac pricing closer to the level one might expect to see if mortgage credit risk was borne solely by private capital,” said Edward J. DeMarco, Acting Director of FHFA.