No, because long term rates don’t necessarily correlate to the Fed Funds rate.
However, the reset rates DO correlate with the Fed Funds rate. Mortgage resets over the next 12-18 months have been cited as the next wave of downward pressure. These are primarily alt-A and prime borrowers.
The rates over the next 24 months WILL have an impact on these resets and WILL have an impact on whether or not foreclosure rates will continue to trend higher or start to flatten.
For example, ALT-A and Prime mortgages tied to the 1-year LIBOR with the typical 2.25% margin would rest currently at 6.75%.
