Mortgage Rates Both UP AND DOWN? How Can That Be?

Why are mortgage rates so confusing?

How is buying money different than gas? I mean, both have gone up, but I mean a gas station has a price on a sign, and you can shop for the lowest price.

At its core, loans sold to Fannie Mae and Freddie Mac, which are BASICALLY government loans, should be priced similar to gold or silver, or stocks in that there is a national market.

Yet, the government agencies, news sources, advertisers, and lenders are all in a conspiracy to make it seem confusing so they can overcharge you.

The press last week blasted headlines such as "Mortgage rates see the largest decline since 2008." Wow, that sounds important! 

But dig deeper and you will find that is wrong and was wrong before it was published.

One of the most misleading sources of mortgage information is the Freddie Mac weekly survey, which is quoted by sources as authoritative. Now, maybe when it was created in the 1990's it was useful to send a survey out to lenders and ask them to respond on any day during the week using whatever loan specifics they wanted. Results are reported from Thursday through Wednesday from lenders, compiled and released on Thursday. Yet, the rates may have and often do, go up from the 1st day of the reporting period through the last, and then rates increase again on Thursday, rendering the report worthless. Then, CNN reports on Thursday the data that is between 1 and 8 days old on a day the market moves again, and voila, a great headline that rates went down to 5.3% but in reality, they are still at 5.8%. Some lenders charge 0 points, some charge 1 point, and some do not respond every week.

But we know the actual rate. Both the Fannie Mae and Freddie Mac rates, the rates at which lenders can resell their loan packages, are reported much like gold and silver and stocks and is publicly available. Here you see a graph showing the Freddie Mac reported rate plotted against the real rate as printed in Mortgage News Daily, and you can see the fake Freddie Mac rate trailing the actual market but eventually getting there.

But it gets worse. It's like the card game scam "3 card monte" where the hustle is not just fooling the person being conned with card trickery, but its also getting others in on the hustle to act like they are helping the victim while they are part of the scam.

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