Mortgage Rate Update – September 23, 2008

Mortgage bonds are trading higher (meaning lower rates) today after a pretty brutal day yesterday.  Oil and gold both had record rallies in place for much of the day.  This was largely based on a weaker US Dollar due to $700 Billion bailout that will require a massive sale of US Treasuries to cover the checks the government is writing…

…which brings us to the big news of the day:  Fed Chair Bernanke and Treasury Secretary Paulson are testifying to the Senate Banking committee today. The task before them is selling the plan that will take the mortgage backed securities and other illiquid assets off the lender’s books in exchange for more readily-marketable US Treasuries.  This could be an interesting day.

Right now, rates are trending lower versus yesterday and have made up some of the gains.  The new Access program is incredible.  This is about the most aggressive lending product in the market right now.  The IHDA loan still carries the grant and the City of Chicago program is ready for a big set of changes.

School’s back but the City of Chicago Teachers program never left.  In this same vein, the other program, often called the City of Chicago Police mortgage program, is also a good program and open to most City of Chicago Public Safety workers.

If today’s testimony moves the markets, check back for an update and commentary this afternoon.