The nation’s largest banks that have been receiving tax payer money from the TARP program have finally began to make new mortgage loans as mortgage rates remain low and home sales begin to pick up.
According to the U.S. Treasury’s latest survey of banks receiving money under the Capital Purchase Program from the TARP funds, mortgage refinance originations in January of 2009 increased by 110 percent from December of 2008. The jump in mortgage refinancing due in large part to the purchase of Mortgage Backed Securities by the Federal Reserve and Treasury that is keeping mortgage rates low.
The current average interest rate for a 30 year fixed mortgage is 4.98 percent, the lowest it has been since January 15th, according to Freddie Mac’s Primary Mortgage Market Survey. The survey also shows the 15 year fixed mortgage rate at 4.61 percent, the 5 year adjustable mortgage rate at 4.98 percent and the 1 year adjustable mortgage rate at 4.91 percent.
The National Association of Realtor also announced today that existing home sales increased in February of 2009 by 5 percent compared to January of 2009. It was also noted that nearly 50 percent of all existing home sales were made by first time homebuyers, which could mark a recovery if more first time homebuyers come out of the woods.
The Treasury, Federal Reserve and FDIC also announced a new program dubbed the Public - Private Investment Program for Legacy Assets which is designed to free up even more money for banks to lend.
It is expected in months to come that mortgage lending will continue to increase as funds come available to banks and that things are finally beginning to fall into place to start a rally for a recovery.
Get more details on mortgage rates, the Public - Private Investment Program and full existing home sales report by visiting Future Planning Financial at www.fpf-direct.com.
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