We’re all happy to learn from Freddie Mac that this week’s rates for 30-year FRMs (fixed rate mortgages) are at their lowest since March 2004. They’re now averaging 5.47 percent, down from last week’s 5.53 percent. This time last year, they were at 6.11 percent.

But there are two pieces of bad news. Read the rest of this entry »

This week’s mortgage news reflected something of a tug-of-war about what consumers should be doing in the face of the recession:

• Mortgage rates edged down yet again, with 30-year rates dropping to 5.47%
• Speculation was that the government would pursue policies to drive mortgage rates even lower
• Existing mortgages continued to experience trouble, as late payments and foreclosures rose to record territory in the third quarter
• Meanwhile, Americans worked to get control of their debts, as consumer debt levels fell on an absolute basis for the first time on record during the third quarter of 2008

The first two items reflect the hope that consumers can be induced to start borrowing enough to spend their way out of recession. The second two items reflect the grim reality that underlying this recession is a debt problem that has to be addressed before the economy can get healthy again.

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It may only have confirmed what most people already suspected, but the biggest financial news of the week was the official announcement that the United States was already in a recession.

Two very different consequences of the slumping economy could be seen in other news of the week:

• Unemployment figures reached levels last seen in December of 1982 — when the economy was just starting to recover from a one-two punch of two recessions in three years
• Mortgage rates plummeted, approaching their all-time lows

While the prospect of unemployment may be enough to give anybody pause, those low mortgage rates should be a green light for many borrowers.

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