Home › Forums › Housing › Oh my… Countrywide just set new rates (effective tomorrow)… › Chris, in regards to “Once
in regards to “Once the secondary market unfreezes, rates will go back down”
Right now the secondary market is frozen due to market losses on mortgage and other derivatives which merely anticipate the actual credit losses from defaults and foreclosures, the markets will not know the true magnitude of these actual losses until late 2008. That is the key problem here. Until the market can determine with any accuracy the degree of what these losses are the secondary market will remain frozen. That will more than likely continue for the balance of this year and into much of next year. This is not a temporary blip. I guess I would like to know why you think the markets will become unfrozen in the near term or what time line are you speaking of?