Debt Downgrade Surprise: Even Lower Mortgage Rates?

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At least one fear was not realized amid Monday's meltdown: the concern that mortgage rates would immediately shoot higher in response to Standard & Poor's downgrade of Fannie Mae and Freddie Mac, the government-sponsored entities that are the 800-pound gorillas of the mortgage market.

In fact, the initial response to Fannie and Freddie getting cut to AA+ from AAA was precisely the opposite. Mortgage rates were poised to continue declining.


HSH Associates, which surveys lenders, quoted the average 30-year fixed-rate mortgage at 4.44 percent Monday. "We expect to see rates go into the 4.30's by noon tomorrow," said Keith Gumbinger, of HSH Associates.

See the full story at CNNMoney.

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