Mortgage Rate Update for March 19, 2010

Terms: (A+ paper)
Purchase money, Owner Occupied, 60 day rate lock, Full Doc.

ALL RATES ASSUME 1 POINT
JUMBO
30 yr Fixed                                          5.375%                        (unchanged)
5/1 ARM                                               4.875%                        (unchanged)
CONFORMING (up to $417,000)
30 yr Fixed                                          4.875%                        (unchanged)
15 yr Fixed                                          4.375%                        (unchanged)
5/1 ARM                                              3.625%                         (unchanged)
10/1 ARM                                            4.250                           (down 1/8)
CONFORMING + LOANS (417,001 – $729,750)
Purchase and no cash out, use conforming rates add up to 1/2 point fee at closing.
These price adjusters are subject to change

Prime Rate = 3.250%                                                               (unchanged)

APR: 30 yr = 5.23%, 15yr = 4.55%, 5/1 = 4.25%,  10/1 = 5.22%

:: Market Update ::

This past week, the Fed met and there were few surprises. As expected, they kept the Fed Funds Rate unchanged. Importantly, key language within their statement also remained unchanged when they once again stated they will stay with “exceptionally low rates for an extended period of time”. This gave a slight boost to the mortgage market.

On the other hand, there is the matter of growing U.S. Debt…
Bonds were under pressure this week when yet another credit rating agency expressed concern over the possibility that the US may loose its AAA rating. If this were to happen, the U.S. would be forced to pay higher interest rates which would also raise mortgage rates.

In other Fed news, we are almost at the end of the Mortgage Backed Securities Purchase Program. This week, the Fed purchased $10 Billion and their total allocation has reached the $1.236 trillion mark. When this program ends, it is expected that transaction volume will drop off sharply and we could see more volatility with rates.

Dan Spitz
Private Mortgage Banker
Wells Fargo Home Mortgage
E2856-042
310.306.7940 Tel
310.622.3773 Cell
866.972.9593 E-Fax
www.wfhm.com/dan-spitz
dan.spitz@wellsfargo.com

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