Rates inched lower Thursday, reflecting improvements in mortgage-backed securities markets yesterday afternoon. This morning, weekly Jobless Claims rose to 333,000, close to expectations. The 4-week average dropped to the lowest level since November 2007. Stocks moved higher. In a follow-up to yesterday’s blog, Fannie Mae and Freddie Mac reported combined second quarter profits of $15 billion, which will be returned to the U.S. Treasury. The two agencies will soon have paid back $147 billion of the $187 billion received in tax payer bailout funds. At the current pace of repayment, the entire bailout cost will be recovered in early 2014. Experts estimate that the elimination of Fannie and Freddie, as proposed by President Obama and being considered by Congress, will increase mortgage interest rates by 1/2% to 3/4%. The agencies need to be reformed to minimize future risk to tax payers, but not eliminated.