Debt Ceiling Affects Interest Rates

Interest rates fro 10.4.13

The big news this week:  So far Congress has not agreed to raise the debt ceiling in order to pay our Federal debt obligations. As I mentioned in last week’s post, this has affected the bond market in a positive way, as this week interest rates continued to ease/go down on the uncertainty. So, as I always say: bad news is good news for fixed rates mortgages.

What’s next?  Many lenders are predicting that they will have trouble selling their loans since Fannie, Freddie Mac, and FHA will be slower to insure loans. However, this does is not affect the VA.

Fannie Mae and Freddie Mac also announced that they will not require verification of tax records (form 4506) or social security numbers through the SSA. But We Do verify those on all files

If a buyer has any problems with their social security number and tax returns, there’s no staff at these agencies to help clear up any problems. So be careful!

Many lenders are having problems on the back end, slowing them down. Predictions of either cutting-off or easing of the QE in October, are being squashed based on the premise that not much could possibly change in the next 2 weeks to sway the Federal Reserve. The problem?  Propping up any particular market is not in their mandate, so there may be cries for them to stop.

Good News: Despite the shutdown at the IRS and Social Security Administration, the vast majority of files at Stratis Financial are not, and will not be impacted by the shutdown.  We have systems in place for all the required items. If you are being impacted and need a file to get going and get closed, please contact me.