|This email was sent to you by:|
Mortgage News Daily
Email alerts, such as this one, are a free service
provided by Mortgage News Daily. If you would like to receive an alert when important news breaks
please register to join our community
No New Weakness, but Reprice Risk Could be Growing
Posted to: Micro News
Wednesday, July 2, 2014 12:29 PM
Occasionally there are viscerally-motivated reprice alerts. This is one of them. Most lenders aren't at risk, but soon could be--at least to some extent.
Here's why (in bullet points):
- tight range post-sell-off this morning for MBS, but favoring the lower end of that range now
- Treasury benchmarks progressively weakening. This makes it harder for MBS to continue to hold ground, and savvy lenders are aware of those risks to the price outlook
- liquidity getting to be more of an issue as the week's only other active trading is unanimously slated for after tomorrow's NFP (lenders are more cautious amid illiquid trading conditions).
- actual, current prices are pretty close to levels normally associated with negative reprice risk anyway, but in the presence of the other bullet points, risk "feels" a bit higher.
Long story short, prices don't necessarily justify negative reprice risk, but it will probably take less than normal in terms of losses to justify negative reprices for some lenders today.
More from MND:
If you would like to opt-out of receiving email forwards from this person please click here to remove your email address.