Daily Market Update 1/25/12

Mortgage rates were little changed Wednesday ahead today’s Fed announcement.  The Federal Open Market Committee of the Federal Reserve wraps up a two day meeting to discuss monetary policy this afternoon.  It will release a statement at 12:30 and hold a press conference at 2:15.  No rate changes are expected, but the Fed will release its forecast for the Fed Funds Rate for the first time.  Investors will also be looking for any indication of the Fed’s plans for additional purchases of mortgage-backed securities.  In economic news, December Existing Homes Sales fell by 3.5%, more than expected.  Last night, President Obama proposed a new refinance program for borrowers who are current on their mortgages, regardless of who owns the loan.  While few details were provided, sources say the Administration plans to ask Congress to allow the Federal Housing Administration (FHA) to insure refinances of underwater mortgages and remove barriers that have kept many borrowers from refinancing.  Considering the current dire financial condition of the FHA, Congressional approval, particularly during an election year, seems extremely unlikely.

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