Will The Govermnent Lower Home Mortgage Refinance Interest Rates?

President Bush’s media appearance on Wednesday was less than optimistic to say the least. He alluded to the fact that the country is facing diminishing retirement savings, increasing the number of residential real estate foreclosures, due to unstable economy and decline in home values, and closure of businesses. "Our entire economy is in danger," President Bush said. He stated that a massive rescue plan need to be implemented in order to improve the health of the economy and to prevent the disastrous consequences of the economy downfall.

He mentioned the pessimistic state of the financial and home lending markets and how it affects the general population. "Ultimately, our country could experience a long and painful recession,” President Bush said. He also stated that without an immediate action by the Congress, the economy could fall into a deep and lasting recession. He stated that the rescue measures are not aimed at individual companies and that he was in doubt to put taxpayers money on the line.
Interestingly enough, a lot of what was said addressed the mortgage situation, the lending practices and the mortgage backed securities. However, the blame was not assigned to any entity in particular, excluding the government backed mortgage programs such as Fannie Mae and Freddie Mac or the Wall Street giants who profit from the mortgage backed securities. Bush spoke in terms of investment banks more so than the speculative nature of the stock market and the mortgage backed highly speculative securities.

However, it is not clear what the rescue plan is. A lot of what was said was value and it doesn’t appear that the Government has a clear direction in which to turn the economy. It seems that in the light of the upcoming elections the Government does what it can to prevent substantial and sudden downfall of the economy. However, with increasing unemployment rates and home foreclosures the economy is already in a bad shape.

What does it mean for us, the consumers and the taxpayers in terms of home mortgage refinance market and mortgage rates? Will the Government lower interest rates to get the economy to a better situation? The question remains unanswered.