Released: November 27, 2008

Credit still harder to get even as mortgage rates fall

Source: Madlen Read, AP [USA Today]

Mortgage rates sank again Wednesday, but investors are worried that getting a loan will still be a tough feat.

The credit markets, while not as crunched as they were last week ahead of the rescue of Citigroup and the Federal Reserve’s plan to buy $600 billion in mortgage-backed securities, are still in rough shape because financial institutions and other investors remain wary about lending. Short-term Treasury rates remain just above zero — suggesting a high level of fear among investors.

“You’re seeing modest, ever so modest, easing in credit conditions. But you can’t declare victory when the patient on the deathbed goes to critical. It’s still dire,” said T.J. Marta, fixed-income analyst at RBC Capital Markets.

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