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Bond Markets Holding Losses For Now; Reprice Are Coming
Posted to: Micro News
Wednesday, March 19, 2014 2:30 PM

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This is one of those situations where many lenders are just waiting for the bottom to hit, or at least for the first bounce before sending out a reprice.

It looks like that bounce may be in the works, but not before MBS lost well over half a point.  That will make for some hefty negative reprices.

The move has more to do with the change in Fed forecasts than the announcement itself, though removing something mathematical and replacing it with something qualitative makes for uncertainty (and markets don't like uncertainty).

Digging in to the forecasts, we see that one additional Fed member moved his/her forecast up to 2015 for the first rate hike and the "end of 2015" median rate forecast moved up from .75 to 1.0.  For 2016, the median forecast moved up to 2.25 from 1.75.  That's probably the biggest piece of news from 2pm with respect to bond market weakness.

After falling as low as 103-22, Fannie 4.0s are already back up to 103-30, so the show isn't over yet, but you will likely see reprices if you haven't already.

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Mortgage Rates:
  • 30 Yr FRM 3.67%
  • |
  • 15 Yr FRM 2.95%
  • |
  • Jumbo 30 Year Fixed 3.62%
MBS Prices:
  • 30YR FNMA 4.5 108-28 (0-00)
  • |
  • 30YR FNMA 5.0 110-17 (-0-04)
  • |
  • 30YR FNMA 5.5 111-30 (0-02)
Recent Housing Data:
  • Mortgage Apps 10.03%
  • |
  • Refinance Index 11.33%
  • |
  • Purchase Index 8.43%