The Federal Reserve recently cut interest rates for the purpose of preventing the United States economy sliding into a recession.

The rate cut has another benefit: finally, a cut in mortgage rates! This will be a boon to many hard up borrowers who have seen their charges zoom through the roof over the past 2years especially those in the sub- prime sector.

Borrowers should look forward to cuts of up to 2% or perhaps more over the next one year. This will stave off a large number of foreclosures especially in very vulnerable markets such as that of California where supervision of mortgage lending was one of the weakest.

A cut of 2% is substantial has it can cut as high as $3,000 a year or more for many sub-prime borrowers. This is substantial considering that many of these borrowers are blue collar and hence poorly paid and probably have high consumer debts on their credit cards. That is why they are in the sub-prime category!

The market that will benefit the most from this windfall will be that of the state of California which was threatened with as much as half a million mortgages that would have been reset within the next one year alone. A big reprieve as higher rates would have created not only a lot of foreclosures but also plenty of insolvent lenders as well 

It is best you meet your lender and request when the present rate cut passed by the Fed will be extended to you. A cut of a few hundred dollars a month will not be a bad thing especially if you were soon to be a victim of the sub-prime woes that engulfed the economy in the latter half of 2007.

The foreclosure nightmare may finally be coming to an end. Let’s party!