June 30th, 2017 1:36 PM by Gene Tidgewell
the Fed raised the Fed Funds rate by 1/4 % last week as expected and they also
indicated they will probably have one more increase this year either in
September or in December. This also raised the prime rate for everyone and
increased the rate on all HELOCS that are still in their interest only period.
other big news is they announced that sometime this year they would start to
reduce their purchases of Mortgage Backed Securities and US Treasuries to
gradually reduce their Balance Sheet which now contains trillions of dollars in
these items. They are currently purchasing about $30 million in mortgage backed
Securities per month.
they start they will reduce their MBS purchases by $4 million a month and
increase it $4 million per quarter until they hit $20 million a month in 5 quarters.
By doing this they will eventually wean themselves of MBS without causing a
spike in rates. It is expected mortgage rates will increase more gradually
following this plan. They will follow a similar pattern with US Treasuries
until they have reduced their purchases by $30 million per month.
Lending now does REVERSE Mortgages as well as traditional Forward Mortgages
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