According to Freddie Mac long-term mortgage rates dipped a bit during the week before Christmas. They reported that 15 year fixed rate loans averaged 4.15 percent compared with 4.17 percent the prior week. 30-year, fixed loans averaged 4.81 per cent down from 4.83 the week before and 5.05 percent a year ago.
Initial interest rates for five-year adjustable-rate fixed loans started at 3.75 percent, while one-year adjustable-rate loans closed the week at an average interest rate of 3.4 percent.
Mortgage giants Fannie Mae and Freddie Mac, who have backed 70 percent of new mortgages in recent months, are being taken over by the federal government in an effort to stabilize the housing market according to reports emerging from Washington D.C. The firms will be placed into conservatorship and the top executives will be dismissed.
The holders of the companies’ debt and preferred stock shares will be protected under the conservatorship plan but common stock holders can expect to see their shares drop dramatically in value. The government is looking to make conservative quarterly cash infusions into the companies rather than try to wipe the debt slate clean. The goal is to stabilize the mortgage market without a full scale tax payer bailout of the companies.
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