Rates End The Week Lower As Market Digests FOMC Announcement

November 5, 2010

Daily Mortgage Updates

Doug Katz Mortgage Broker 5 November 2010 – The past week was an exciting one. First, there were the mid-term elections with all of the drama of a Mexican soap opera and the negativity of homeless curmudgeon yelling at you on an El platform. This, however, paled in comparison to the much anticipated announcement of QE or quantitative easing by the FOMC.

This move, under which the Fed will purchase $600 billion US Treasuries, is intended to provide a positive shock to the economy. The overall plan, if all goes as planned, will increase the money supply and provide downward pressure on interest rates. This should especially affect large banks, many of which hold large amounts of T-bills, who will now have more money to, at least theoretically, lend out. The hope is this will lead to wider availability of credit and, as the price of Treasuries rises, lower rates.

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We have yet to fully realize the full impact of this move, but the QE announcement definitely provided some volatility this week. The suspense was palpable as rate watchers and financial professionals anxiously awaited the details from the FOMC like teenagers waiting for the next Twilight movie and, when the specifics were announced, it was almost as horrible. The mortgage market initially reacted negatively with mortgaged back securities suffering some setbacks. By Thursday, however, the expected outcome of finally shown through with mortgage rates for Fannie Mae and Freddie Mac loans ending lower.

I am recommending that my clients closing in 7 days or less from today LOCK. For those closing more than 15 days out, I would suggest FLOATING for now with a watchful eye on the markets for the best opportunity.

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About Doug Katz

As the Senior Mortgage Banker and Sales Manager for Chicago Bancorp, Doug not only originates loans for his personal business, but also oversees affiliations with banks and other financial institutions that depend on Chicago Bancorp to meet their client’s lending needs. In this role, Doug directs the day-to-day mortgage sales operations of over 25 branches in a multitude of Chicagoland’s diverse communities. He brings to these relationships a wealth of industry experience and a dedication to an exceptional client experience that has established Chicago Bancorp as Chicago’s pre-eminent mortgage solution providers. Prior to joining Chicago Bancorp, Doug attended and graduated from West Point. Upon graduation, he was commissioned as an officer in the United States Army Artillery, where served 5 years in numerous roles and in various deployments include service in Kuwait. In addition to his Bachelor’s Degree from West Point, Doug holds an M.B.A. from Loyola University Chicago, where he was also inducted into the Beta Gamma Sigma Honor Society. He also served as President for the West Point Society of Chicago from 2003 to 2005 and still serves on the Board of Directors. When not working, he spends his time with his wife and three children in their hometown of Oak Park, as well as pursuing his passions for fitness, cooking and the banjo. Doug can be reached by phone at 312.738.6079, by email at doug@chicagobancorp.com, on his own blogs, BankerDoug.com and Vet Money Matters. He's also on LinkedIn.

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