Posts Tagged ‘mortgage backed securities’

Mortgage rates went into the weekend at new record lows last Friday. This was the ALERT we published on Rate Watch... ALERT : There are some lenders out there, if the APP--to--CLOSING process is flawless, where a borrower could close at 4.25% right now, without paying more than 1 pt. But you're loan file is gonna have to be a real slam dunk. You must be the definition of "well-qualified". Mortgage rates moved lower as a result of continued high demand for agency mortgage-backed securities. We have described this demand as a "flight to safety" , but from another perspective, what it really boils down to is the highly-competitive loan origination environment. READ MORE A flight to safety happens when investors are nervous about owning risky assets like stocks, but do not...(read more)

Mortgage rates hit their lowest levels in over a month yesterday after mortgage backed securities prices rallied to new 2010 highs. These improvements were triggered by a stock sell off which forced investors to reallocate funds into less risky assets like US Treasuries. Panic in stock markets was prompted by a proposal from the Obama administration which limits the size of banks and their risk taking/profit making strategies. While details have yet to be provided, the stock market did not react well to this news. Bank stocks sold off rapidly as market participants scrambled to make sense of the regulatory proposal. This event turned out to be very supportive of interest rates. As MBS price gains held into the trading session close, many lenders reissued rate sheets which lowered consumer borrowing...(read more)

All week we said "wait until Thursday to lock", "mortgage rates will improve after the bond auction on Thursday", "the end of the week will be the best time to lock in your loan". The Treasury auction came and went. After the last round of debt was sold, $13 billion of 30 year bonds yesterday, everything that was supposed to happen in order for mortgage rates to improve...happened. Everything except mortgage rates moving lower that is! Although prices of mortgage backed securities rallied immediately after the auction, prices soon lost progress and most lenders were not able to improve mortgage rates. To remind readers, as the prices of MBS move higher lenders can offer lower consumer borrowing costs. This was a huge letdown for us. But we were still hopeful we...(read more)

Although lender's adjusted mortgage loan pricing by a few basis points yesterday, for the most part mortgage rates were unchanged as the bond market failed to make much progress in either direction. In the absence of economic data and noteworthy events, it was a pretty boring session yesterday. Both benchmark Treasury yields and mortgage-backed securities prices did however manage to make marginal improvements, perhaps I should say they didn't get worse instead as gains were minimal. Slightly improved is better than slightly worse though right? The economic calendar is once again light today with the only significant data being the International Trade report. This data reports on the difference between the dollar amount of what our nation imports and the dollar amount of what our nation...(read more)

Mortgage rates moved higher for the second day in a row yesterday as investors took profits and set up positions for the release of Non-Farm Payrolls data today. As a reminder, when mortgage-backed securities prices move lower, lenders are forced to offer higher mortgage rates. If MBS prices move higher, lenders can offer lower mortgage rates because they can sell loans in their pipeline of loans for a higher price. Below is the chart I used earlier this week to illustrate this relationship... GREEN is MBS prices and RED is mortgage rates Today was a major event for the mortgage rates outlook. For almost the entire month of December, the bond market reflected a "worst is behind us" economic perception. Long term Treasury yields moved considerably higher, pushing mortgage rates over...(read more)

Mortgage rates improved for the first time in six sessions yesterday as mortgage backed securities price appreciations early in the day allowed lenders to boost rate sheet rebate. Mortgage rates are slightly worse this morning after a better than expected Jobless Claims report. The weekly jobless claims report totals the number of Americans who filed for first time unemployment benefits in the previous week. Included within this report are continuing claims and extended benefits claims. Continuing claims totals the number of Americans who continue to file for unemployment benefits (because they haven't gotten a new job). Extended benefit claims totals the number of Americans who’ve used up their traditional benefits and are now collecting extended payments under recent government...(read more)