Refinance Mortgage Rates
Analysts from JPMorgan Chase & Co. are dishing out financial advice to the U.S. government. Leading finance analyst, Matthew Jozoff, tips the U.S. Congress to take on a legal action to enforce radical loan modifications on Fannie Mae and Freddie Mac-backed bonds, implying that current low refinance mortgage rates are not enough to spur consumers.
Jozoff believes that U.S. Congress’s initiative to implement mortgage reforms can spark a ‘nuclear’ mortgage refinancing wave.
In a statement addressed to their clients last August 27, Jozoff wrote, “Congressional action would be required to trigger any significant “government-sponsored refinancing wave” in the market for bonds owned or guaranteed by mortgage financiers Fannie Mae and Freddie Mac.”
Since yields are unlikely to be diminished with mortgage bonds tied to the U.S. home loans, investors can safely put their money here, the JPMorgan Chase & Co. team of analysts likewise advised.
But Jozoff is not optimistic that this will happen anytime, soon. He looks at a more practical solution which will need government action.
He further takes note of information from the Barclays Capital Index data which shows the government-backed mortgage bonds gathered as compared with the U.S. Treasuries last July 23.
Jozoff is not optimistic that any other major increase will spring after this year’s initial big wave of applications to make financial modifications to existing mortgages.
Photo credit: The Truth About Mortgage
