The struggling economy could get a jolt if a published report regarding struggling AMBAC comes true. AMBAC is one of the nations largest bond insurers. They provide a critical role for municipalities who seek to finance their projects through issuing bonds. If AMBAC's rating falter it will force higher premiums on the insurance and thus cause more financial pain for local governments who are already struggling financially. Rumors surfaced last week that eight major banks would collaborate to restructure the bond insurer and thus preserve the important AAA insurance rating. This move would help to calm the credit markets and provide a sign for investors that the economy could get back on track. Mortgage rates were relatively unchanged on the news but it could be a large factor in a stock market rally this week.

2-25-2008 ©LowRateMortgage.com

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