4.5% rates Are they really comming?

The word on the street is the Federal Government is going to make mortgage companies offer 4.5% fixed rate mortgages soon. I saw this in the newspaper and I read it on the internet. Nothing has officially come out about rates dropping to 4.5% from the Government. The thought process behind this is if rates were 4.5% then potential homeowners would be motivated to get off of the fence and start buying homes. It was also mentioned that the 4.5% rate may be extended to homeowners that want to refinance. This could boost consumer spending, which is a major component of U.S. economic activity.


I wonder where this money is coming from. The Fed may start selling treasury notes at 3% to fund this program. The Fed would keep the 1.5% as a profit. One of my major concerns is if this is going to be a one-time program. If it is not, then there could be a problem for potential and current homeowners who are looking to purchase/refinance. By waiting around and not buying or refinancing, due to waiting for the rates to drop, they would all apply for mortgages at once. This would create a log jam in the mortgage system that would make it almost impossible to efficiently fund home loans.