Rates take an unsurprising jump this week due to stock rallies and the lowering of the Fed Funds Rate.  Remember, when the Fed reduces their lending rate, the in turn economic change is toward inflation.  Inflation will cause mortgage interest rates to rise.  Since mortgage rates are not directly tied to the banks lending rates, this can occur.  The 30yr fixed up almost .5% this week to 6.25%, 15yr at 6%, FHA/VA at 6.375-6.5%.  Jumbo Arms still in the mid 5% range and the 5/1 is around 6%.

Help is on the way for the mortgage industry that will help as many as 3 million homeowners stay in their homes and avoid foreclosure. We have been saying for weeks that until the mortgage industry and the foreclosure pace is slowed, the economy would only decline further and stay weaker for a longer period than the Wall Street firms tout. Yesterday in a speech at an international deposit insurers conference in Arlington, Virginia, FDIC Chairman Sheila Bair mentioned the program being considered by Treasury. No real details but what we hear FDIC and Treasury are considering a program that may offer about $500B in guarantees for troubled mortgages to stem record foreclosures. The plan being talked about would require lenders to restructure mortgages based on a borrower's ability to repay. Under one option, the industry would keep lower monthly payments for five years before raising interest rates. The government until now has relied mainly on a voluntary, industry-led alliance to spur loan modifications and avert foreclosures.