I was talking with the bank today and they said i could get a refi on a 30 year conventional house loan at 5.25%

I thought it a good deal.

Then i read this:

WASHINGTON - Financial industry lobbyists are urging the Treasury Department to take steps to lower mortgage rates in an effort to stabilize the housing market.

Under the proposal, Treasury would seek to lower the rate on a 30-year mortgage to 4.5 percent, Scott Talbott, a vice president at the Financial Services Roundtable, said Wednesday. That's about one percentage point below the current rate of 5.6 percent.

Treasury would do so by purchasing mortgage-backed securities from Fannie Mae and Freddie Mac, Talbott and other industry sources said.

While details of the proposal are in flux, the program could be similar to the effort announced last week by the Federal Reserve to purchase up to $500 billion of mortgage-backed securities from the two mortgage giants, Talbott said.

Mortgage rates dropped steeply in the wake of the Fed's announcement.

Additional purchases could drive mortgage rates down further, and enable Fannie and Freddie to purchase or back more home loans.

Fannie and Freddie, which were seized by federal regulators in September, own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt.

Treasury is strongly considering the proposal and could announce a decision as early as Monday, industry sources said.

Treasury spokeswoman Brookly McLaughlin said she would not comment on speculation about actions the department may take in the future.

Treasury could make the proposal as part of a request for the second $350 billion of the $700 billion financial rescue fund, industry sources said.

Treasury Secretary Henry Paulson has been criticized by members of Congress for using the bailout money to shore up Wall Street banks, while doing nothing for homeowners facing foreclosure.

The proposal was reported Wednesday on The Wall Street Journal's Web site.

In recent weeks, a diverse set of industry groups from real estate agents to carpet makers have called on lawmakers and the incoming administration of President-elect Barack Obama to subsidize lower mortgage rates and beef up tax credits to help stimulate housing demand.

The National Association of Realtors has been pushing a plan under which the federal government would spend $50 billion to lower mortgage rates. It says doing so would yield about 500,000 more home sales.

The National Association of Home Builders is leading a new "Fix Housing First" coalition to push for aid to the ailing housing sector, including a tax credit of up to $22,000 for anyone who buys a home before the end of 2009.

"The goal is drive mortgage rates so low that home prices not only stop falling but begin to rebound," said Greg McBride, senior financial analyst at Bankrate.com.

While the plan, if enacted, will help anybody looking to buy or sell a home, or refinance out of an expensive mortgage, it may not help those whose credit is so damaged that banks don't want to lend to them.

"It may change the number of borrowers seeking loans but it won't change the qualifications for who gets those loans," McBride said.

I don't think it will happen but if they do its going to be a very Merry Christmas.....for me..................even though it's asinine to charge that interest rate with the given risk level.

And what about the requirement of new appraisals for refinancing . . . ouch!

Since when is that a new requirement? Appraisal waivers have been gone for more than 2 years.

Well what heard today is that 4.5 will only be applicable to the purchase of a home (new or used), NOT for those of us responsible people that have been fathfully paying our mortgage.

Our lawmakers give it to us good AGAIN.

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1990 500SL

I was always taught to respect my elders.
I don't have to respect too many people anymore.

Exactly, what kind of reward is it to homeowners that have been paying market rates for years and may get kicked in the nutz? What will make it fair, a rebate? Paaleaze.

I'll be honest, as a banker this is the mother of all handouts with mandatory mortgage banker registration on the horizon the few of us left standing are going to be even fewer it will make the oil speculators look like encyclopedia salesman.

What do you mean by "with the given risk level"?

De fault lies not within the stars but within ourselves.

The banker said the need to do an appraisal is based on how recently you financed or refinanced. If it's within 2 or 3 years they don't order an appraisal

I'm not sure from your reply but I think you are suggesting that Howitzer's "given risk..." means the banks are going to offer 4.5% loan rates to those with shaky credit? If that’s what you’re saying, the article above clearly says that’s not the case:

“While the plan, if enacted, will help anybody looking to buy or sell a home, or refinance out of an expensive mortgage, it may not help those whose credit is so damaged that banks don't want to lend to them."

This kind of offer would definitely start a big trend. Even still, buyers with shaky credit would probably pay higher rates, but less than current rates.

It needs to make enough difference for some to be able to keep their home and for many to find a few more disposable dollars. 4.5 % for good risk would do that

Any rate in the 5's is excellent any way you look at it.

I think Jeff posited a graph awhile back showing that historically rates don't drop below 5% much, and when they do its very short.

__________________
1999 SL500
1969 280SE
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I closed on my first home for my family of 5 in june last year. I have a 6.75 conventional 30 year fixed rate, and have not missed any payments. People that have been missing payments, have a non fixed, or somehow otherwise made a stupid decision will get rewarded. So to get this straight: if you are stupid you get bailout $, if you chose wisely you get jack****. What does that say me? I ought to have been stupid, and I'd get $.

Isn't that approximately the domfock scheme that got us into the current freaking predicament?

Wrong, I don't mean to be abrasive but by today's standards that is incorrect in almost all scenerios there maybe a shining gem out there in a booming market but by Fannie and Freddie standards appraisal waivers are history...which I think is a good thing btw.

The open market suggests something much different , how do you define "a good risk". A good risk that deserves a rate that low is 50% ltv, 10%dti in a stable market. May I also remind you that Fannie and Freddie have 1% delinquency rates which makes them a hero by almost any standard the reason they lost their ass is they were selling non-conforming paper at conforming prices and got throttled by the market.