#59 - Faramarz Moeen-Ziai - Bonds, Bills, and BS: The Truth About Your Mortgage Rate

The Mostly Real Estate Podcast, with Declan Spring

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What actually makes mortgage rates rise and fall? If you've been waiting for the Federal Reserve to cut rates before buying a home, you might be watching the wrong signals entirely.
Mortgage expert Faramarz Moeen-Ziai pulls back the curtain on the complex world of mortgage rate determination, revealing why there isn't a direct correlation between Fed actions and the rates homebuyers actually see. Drawing on over 21 years of industry experience, including surviving the 2008 financial crisis, Faramarz explains how the bond market – specifically mortgage-backed securities – dictates mortgage pricing through a delicate balance of risk assessment and investor demand.
The timing of this conversation couldn't be more relevant, coming just hours after Congress passed legislation potentially raising the debt ceiling by approximately $3 trillion. This massive influx of government debt will require unprecedented Treasury bond issuance, creating potential ripple effects throughout the bond market. The upcoming Treasury auctions will provide the first indication of how this expanded debt load might influence mortgage rates in the near term.
For homebuyers sitting on the sidelines waiting for rates to drop, Faramarz offers a sobering reality check based on decades watching market cycles: "Waiting can really cost you. It's not a trend, it's a momentary thing." With rates currently in the mid-6% range – a significant improvement from recent highs – and somewhat reduced competition in many markets, motivated buyers may find themselves with advantages they won't see when rates eventually improve and competition increases.
Beyond rate predictions, Faramarz shares how his lending approach has evolved to create deeper partnerships with real estate professionals through a customer-focused "Four Pillars" system designed to deliver exceptional service and generate mutual referrals. His insights will be valuable for anyone navigating today's complex housing market – whether you're a buyer, seller, or real estate professional looking to better understand what's really happening behind those mortgage rate headlines.

Please visit Faramarz Moeen-Ziai's business page here.

Faramarz Moeen-Ziai, mortgage advisor NMLS #342090

Declan Spring is a licensed CA REALTOR® DRE#01398898

Chapters

1. Introduction to Mortgage Rate Speculation (00:00:00)

2. Faramars' Journey in Mortgage Lending (00:14:37)

3. Navigating the 2008 Financial Crisis (00:30:37)

4. Post-COVID Mortgage Market Dynamics (00:46:07)

5. How Mortgage Rates Actually Work (01:01:24)

6. Bond Markets and Government Spending (01:15:54)

7. Cross Country Mortgage's Unique Approach (01:25:47)