RateWatch Wednesday

Another bailout on the books, but nobody seems to know what it's going to consist of, except lots and lots of dough, though not as much as Detroit wants. The stock market therefore doesn't know what direction to go. That's good enough for bond traders, who are buying short maturities in quantities never before seen. Traders are willing to buy bonds that have ZERO interest, just to have some place to park their money. There's still a lot of progress that needs to be made in the credit markets, folks. Things are not back to normal. Not by a long chalk.

What does that mean to you? Well, bonds are still attractive, meaning that mortgage rates are low and still seeing downward pressure. This is probably a good place to address Secretary Hank Paulsen's comments about driving mortgage rates to 4.5%. Paulsen is not in charge of mortgage rates. He can direct the Treasury to buy billions of dollars' worth of mortgage-backed securities and drop the rates for those a ways, but banks will not then necessarily drop mortgage rates just because Hank says so. The international bond market is a whale of a lot larger than the Secretary's purchasing authority. Nobody I know is betting on rates being a great deal lower than they are right now.

That said, by virtue of being on this list, you can be added to our exclusive RateLocker program, where we watch for a specific rate for you, and when we get it, we lock it, so you don't have to be glued to CNBC all day (which, incidentally, wouldn't help much). It's a service we provide; it costs you nothing but a phone call.

For now: 30-year fixed, conventional, 20% equity, owner-occ, 720+ credit = 5.375% with FHA rates about the same (accomodates higher LTVs and worse credit scores and cash out).