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by CareyBot

On May 26, 2009, shock waves hit the mortgage market as interest rates shot up after dipping into the 4 percent range for 30-year fixed-rate conforming loans. On May 29, the bond market rallied, lowering mortgage rates by about half of the previous days' increase.This was followed by another rate hike as investors demanded higher interest rates on long-term government debt. Interest rates on 30-year fixed-rate home mortgages are tied to the 10-year Treasury rate. In mid-May, the interest rate on a 30-years fixed conforming loan for loan amounts up to $417,000 was available at 4.38 percent and one point. The one-point origination fee is equal to 1 percent of the loan amount. On May 28, the rate for this type mortgage shot up as high as 5.25 percent with one point, topping 5 percent...