Record Setting Day for Mortgage Rates

Mortgage rates fell today for the first time ever below 4.0%.

And thanks to the Fed and their new plan to sell off short term securities in exchange for purchasing longer term ones – a move that effectively lowers both long term mortgage rates and savings rates – mortgage rates could fall even further.

So if you happen to be in the market for a new home loan or are contemplating refinancing your existing loan, you’ll currently be met with spectacularly low rates. According to our database of 30 year fixed rate mortgages, today’s APR’s are as low as 3.83% in Los Angeles as well as 3.87% in New York.

However, even though rates hit a record low today, it has been no secret that they’ve been free-falling for a few years now. Most mortgage shoppers that have been sitting on the fence, reluctant to pull the trigger on a loan, have undoubtedly been weary of jumping into the market because each week has seemed to have featured a new all time low.

Contrary to the low rates though is the overall affect on home sales. In general home sales have been sluggish since the housing market collapse of ’07 and ’08, but 2011 is actually turning out to be the worst year in well over a decade.

This move by the Fed to indirectly lower rates across the board could turn out to be a stimulating one for the economy as a whole, but more home owners are going to need to be approved for refinancing. It does little good to have record low mortgage rates when only the most immaculate of credit scores can take advantage of them.

How much did Banks borrow from FED in 2008?

A report was just issued today on the whopping sum in which banks borrowed from the FED during the financial meltdown of 2008 along with ‘who’ exactly borrowed ‘what’ amount.

Prior to the Dodd-Frank regulatory reform law, the FED refused to disclose the sum it divvied out to our country’s most well known banks, however, this information has now gone public. And the sums are quite staggering! Check out the figures and facts below.

Bank Borrowing from FED:

1) Morgan Stanley — $107.3 billion
2) Citigroup — $99.5 billion
3) Bank of America — $91.4 billion
4) UBS — $77.2 billion
5) Goldman Sachs —$69 billion
6) Deutsche Bank — $66 billion
7) Barclays — $64.9 billion
8 ) JP Morgan Chase — $48 billion
9) Hypo Real Estate Holding — $28.7 billion
10) Societe Generale — $17.4 billion

Apparently there was significant borrowing from foreign banking institutions as well. The Royal Bank of Scotland, based out of Edinburgh, received $84.5 billion while Zurich’s UBS got $77.2 billion. Another noteworthy borrower abroad was Germany’s Hypo Real Estate Holding which received $28.7 billion – a whopping $21 million for each of its 1,366 employees!

More mind boggling facts regarding these loans:

- This balance was more than 25 times the Fed’s pre-crisis lending peak of $46 billion on Sept. 12, 2001.

- If loaned out in $1 bills, the $1.2 trillion would fill 539 Olympic-size swimming pools.

- Federal Reserve Bank of New York staffers in February said the central bank netted $13 billion in interest and fee income from the programs from August 2007 through December 2009.

- Bank of America’s bond-insurance prices last week surged to a rate of $342,040 a year for coverage on $10 million of debt, above where Lehman Brothers Holdings Inc. (LEHMQ)’s bond insurance was priced at the start of the week before the firm collapsed.

You can read more here and here.

Mortgage Delinquency Rates 2010: Optimistic trend forming?

At 10:00 am EST today, Federal Reserve Chairman Ben Bernanke will speak at the Fed’s annual meeting in Jackson Hole, Wyoming. And after the Dow just dipped yet again below the 10,000 mark yesterday, many investors will be tuning in to see how his perceived outlook could effect today’s market.

Among the many nightmare-ish charts Bernanke will be discussing, BankVibe.com will be closely following his interpretation of the current mortgage delinquency trends.

It seems there may be some reason for optimism according the Fed’s charts (which will be presented in the discussion). The charts show that actually as of May 2010, mortgage delinquency rates have begun to taper. Since the housing and economic collapse adjustable rate mortgages have been hit hardest with payment delinquencies. At their peak, mortgage payment delinquencies where affecting slightly over 15% of home owners with prime or near prime mortgages and a staggering 50% of all sub prime mortgages. For most of us, however, these facts are likely old news – what’s a more recent development is the beginning of a downward trend which these charts are beginning to show. Even subprime mortgage delinquency rates have begun to decline as of May.

So while rates still remain uncomfortably high, it still should be noted that there appears to be at least a faint light at the end of the tunnel.