More Videos
- Disney Profit, Sales Top Street Forecasts; Shares Rise
- Despite Rhetoric, Obama Has Few Options to Boost Jobs
- US Debating What to Do With Billions of TARP Money Left
- US Starts Fiscal 2010 With $176 Billion Gap for October
- Forecast From Retailers: Proceed With Caution
- Cities With the Most Home Price Reductions
- Housing Recovery 'In Uncharted Territory': HUD Chief
- For Video Game Makers, Stakes Are High for Holidays
- In Charity Tax Filing, a Real Glimpse of Goldman Sachs
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
- What's The Forecast from Retailers? Proceed With Caution
- Disney's CFO-Theme Park Chairman Executive Swap
- Road Rage Rants
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
- S&P Stocks Trading at New 52-Week Highs
MOST SHARED
- Meet The Leaders of the New Retail Revolution
- Obama Plans Jobs Summit But Not Second Stimulus
- "Friending" Big Pharma
- A Public Hearing That Isn't Public
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Disney CFO and Parks Chief to Swap Roles
- For Video Game Makers, Stakes Are High for The Holidays
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
- Smoking on Rise Again: More US Adults Lighting Up
Text Size 
The Treasury Department is considering a plan to boost the depressed housing market by easing mortgage rates on new home loans.
The plan, which is in the development stages, would bring loan rates down as low as 4.5%, a full percentage point lower than the prevailing rates for 30-year fixed mortgages.
The plan, which was first reported by the Wall Street Journal, was confirmed by CNBC.
Under the plan, the Treasury would buy securities underpinning loans guaranteed by Fannie [FNM
Loading...
()
] and Freddie [FRE
Loading...
()
], which are temporarily under the control of the government, as well as those guaranteed by the Federal Housing Administration.
Officials have said that this plan is different from the one that had previously been championed by FDIC’s chairman Sheila Bair.
Video: What the Treasury is considering.
Earlier Wednesday, bond guru Bill Gross told CNBC that the 30-year fixed-rate mortgage could fall as low as 4.5 percent as the economy stabilizes.
"The mortgage rate will come down another 50 to 100 basis points," Pimco's founder and chief investment officer said. "That's basically what the government needs. They need a 4 1/2 percent to 5 percent 30-year rate in order to support home prices and, yes, to encourage refinancing and the process of reliquification within the economy."
Yet many economists say that even with lower mortgage rates, falling home prices and mounting unemployment will keep the housing market in its deepest slump since the Great Depression.
Print
Email
- CNBC is blogging a talk given by Warren Buffett and Bill Gates to students at Columbia University.
- They may have wrecked their company or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.
Data is a real-time snapshot *Data is delayed at least 15 minutes