News Article From: 12-04-2008
Treasury weighs action on mortgage rates, an article from msnbc.com, reports that the Treasury department is "strongly considering a plan to intervene directly in the mortgage industry to dramatically force down rates." Under the plan, the Treasury would purchase securities that finance newly issued home loans. In order to participate in the program, lenders would be required to set exceptionally low interest rates. Those rates may be as low as 4.5% for a traditional, 30-year fixed-rate mortgage. Most of the securities would be purchased from Fannie Mae and Freddie Mac. Following a meeting in mid-November, senior Treasury officials stated that they were optimistic that "subsidizing lower mortgage rates with taxpayer dollars would help revive the housing market."