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Fed Reserve announces it will begin purchasing up to $500B in MBS (Mortgage Backed Securities) early January

Today the Federal Reserve announced it will begin it's $500 Billion purchase of MBS (Mortgage Backed Securities) backed by Fannie Mae, Freddie Mac and Ginnie Mae starting in early January through the 2nd quarter of 2009 in a program separate from the Treasury's MBS buying program.

What does this mean for us? Lower interest rates.

As more money flows into the MBS market we should see an improvement in the pricing of the FNMA 30 Year Bond which will directly result in lower interest rates.

What should I do? Be prepared to act fast!

The last time pricing hit the best point in history (Wednesday December 17th 2008) where we saw the 30 year fixed at 4.5%, it quickly snapped up after only a few short hours. So, be prepared to lock this time. Contact us for an application or for our lock agreement form. Or if you wish, you can fill out our secure online loan application.

30 Year Fixed Conforming
Rate	Points	APR	Lock Days
4.875%	1.000%	5.004%	45
The APR is calculated using a loan amount of $417,000 and these typical fees.

30 Year Fixed (High Balance Conforming)
Rate	Points	APR	Lock Days
5.125%	1.000%	5.245%	45
The APR is calculated using a loan amount of $561,200 and these typical fees.

Jumbo 5/1 ARM
Rate	Points	APR	Lock Days
5.300%	1.000%	4.300%	45
The APR is calculated using a loan amount of $750,000 and these typical fees.

Jumbo 7/1 ARM
Rate	Points	APR	Lock Days
5.400%	1.000%	4.491%	45
The APR is calculated using a loan amount of $700,000 and these typical fees.

Jumbo 10/1 ARM
Rate	Points	APR	Lock Days
5.650%	1.000%	4.844%	65
The APR is calculated using a loan amount of $700,000 and these typical fees.

VA
Rate	Points	APR	Lock Days
5.125%	1.000%	5.262%	45
The APR is calculated using a loan amount of $400,000 and these typical fees.

CAL VET
Rate	Points	APR	Lock Days
5.500%	1.000%	5.637%	45
The APR is calculated using a loan amount of $400,000 and these typical fees.

U.S.D.A.
Rate	Points	APR	Lock Days
5.000%	1.000%	5.140%	45
The APR is calculated using a loan amount of $400,000 and these typical fees.

Bond Quotes Last updated 11-21-08 (9:00 AM PDT)

Contrary to popular belief, conforming mortgage rates are tied directly to the performance of mortgage backed securities, NOT the US 10 Year Treasury Note. These two often move in similar directions (and sometimes they don’t), but do not represent one another. It’s like wanting to know the price of a share of Google stock and checking the ticker for Yahoo!. Below is how the two are performing today. An increase in the price will relate to an improvement to conforming mortgage rates.

Security	Last Sale	Day Change
Fannie Mae 30 Year Bond 6.0%	$101.31	-12 basis points
US 10 Year Treasury Note	$105.16	-121 basis points