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Mortgage Rates Today, HARP Loans and the Greek Vote

After making several consecutive weeks of all-time lows mortgage rates have paused their decent and have remained in a tight range the past several days. Mortgage rates today on 30 year conforming loans are averaging 3.64 percent and 15 year conforming mortgage rates are still under 3.00 percent averaging 2.99 percent.

The direction mortgage rates and bond yields took this week was dependent on the Greek vote to decide on a new government. Pro-bailout parties won a majority of seats to form a new government easing fears that the Euro-zone would unravel.



If the anti-bailout parties won, markets would have tumbled sending investors fleeing into dollars and U.S Treasuries. As Treasury prices rise, Treasury yields fall. Mortgage rates are tied to bond yields current mortgage rates would have declined to new lows this week.

Since the former happened bond yields are stable, no big swings in yields. Current 10 year bond yields are unchanged at 1.58 percent.

Today's mortgage rates on conforming 30 year rates at 3.64 percent are slightly lower from Friday's average of 3.67 percent. 15 year mortgage interest rates averaging 2.99 percent are also down from Friday's average rate of 3.02 percent.

Also in the news today is a report showing two large banks and benefiting from the government's Home Affordable Refinance Program (HARP) program to help homeowners who want to take advantage of low refinance rates but can't since they are underwater on the home loan.

These homeowners can't refinance since they owe more than their home is worth.With today's refinance rates under 3.75 percent on 30 year loans millions more would refinance if they were able to.

The two national banks are estimated to get as much as $12 billion in revenue refinancing loans under the HARP program according to Nomura Holdings Inc. Nomura also estimates homeowners will save between $2.5 billion to $5 billion this year by refinancing under HARP.

These homeowners who can't refinance otherwise if it wasn't for the HARP program are refinancing with their current lender at refinance rates above market rates. In fact 75 percent of refinances done under the program are done with existing lenders. Large lenders pretty much have a monopoly since these homeowners have no where else to to.

You would think after the financial crisis, TARP and the outcry for more government financial regulation the banks wouldn't want any more negative publicity but I guess greed got in their way.
 
Author: Robert Till
June 18th, 2012