This week, concerns about prolonged weakness in the economy caused investors to sell stocks and buy relatively safer investments, including mortgage-backed securities (MBS). This, plus the fact that the Fed purchased more MBS than in any prior week, resulted in mortgage rates falling a little during the week.
For months, leading economists have been predicting that the economy will perform poorly during the first half of this year, and Friday’s Employment report was right in line with those forecasts. The economy lost -651K jobs in February, and the December and January figures were revised lower by a total of -161K. The Unemployment Rate jumped to 8.1% from 7.6% in January, which was the highest level since December 1983.
Borrowers interested in refinancing their loans under the Financial Stability Plan received some additional guidance this week. The program is designed to assist homeowners whose loans are owned or guaranteed by Fannie Mae or Freddie Mac, who are current on their payments, and where the loan amount is no more than 105% of the value of the home. A website (www.financialstability.gov) provides guidance on how to determine if a particular loan is owned or guaranteed by Fannie or Freddie and whether the borrower may qualify under this program. Additional details of the program are expected over coming months