The Wall Street Journal reported that unnamed sources in the Treasury department are floating the idea of 4.5% mortgages that would be bought by Fannie, Freddie and the FHA to stimulate the housing market. These rates would not be available for refinances. But don’t hold your breath…

Frequently, in the ways of Washington politics, “trial balloons” are launched to see what type of flack they might receive from the multiple stake holders in any given situation – especially if the trial balloon comes from “unnamed sources” for attribution.

However, there is no doubt the political climate in Washington is to stop foreclosures, stop the decline in home values, and to see the housing market jump started, so this idea of the Feds lowering interest rates may gain traction, especially after the Obama administration takes office.