Although prices of mortgage backed securities moved higher yesterday, lenders were unwilling to move mortgage rates lower. This was a frustrating event for most originators and borrowers who were expecting to see at least modest improvements in the primary market (mortgage rates) as the secondary market (MBS trading) rallied. While a few lenders repriced for the better towards the end of the day, the gains were weak. As a reminder, as MBS prices rally, lenders are able to offer lower mortgage rates. I like to use the below chart to illustrate the inverse relationship. MBS prices are in green and mortgage rates are in red. Remember as MBS prices rise, mortgage rates fall. Do you see the relationship? :-D The market absorbed two economic reports this morning. First, the U.S. Department of Commerce...(read more)

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