Why are mortgage rates higher now than in 2004 and the FED rate is near ZERO?

Answers:0   |   LastUpdateAt:2012-11-04 21:56:40  

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Frederico Barreto
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Is this all about the banks getting bailed out? Ya, people will say "Oh but the FED rate really isn't about mortgage rates". HOWEVER, actually it is - but seemingly only when it's convenient for the banks. Back in the bubble, it was desirable for the banks to have low rates so they cut them. Now, it doesn't matter WHAT the FED and LIBOR rates do - the banks have the mortgage rates magically stuck at over 5%. What gives?

Also, why are the banks allowed to "pull back" all lending now including and most importantly refinancing. They are simply denying all stated income loans including refinancing. People are trying for "loan modification" which are but a desperate chance to get relief on their mortgages. Certainly bailing out the banks has only made this problem worse.
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