Mortgage Rate Watch : mbs

Mortgage Rates Bottom Out. Lock'em If You Got'em

Victor Burek — Fri, 20 Nov 2009 15:31:00 GMT

While benchmark interest rates continue to chop around in a contained range, mortgage-backed securities have moved sideways, failing to make much progress in either direction. Although we have experience a few moments of added volatility, tight trading ranges have kept and generally "topped out" MBS prices have kept mortgage rates stable all week, near six month lows. As previously stated, MBS prices are hitting a ceiling, unable to make enough progress to push mortgage rates any lower. Therefore, if you are still floating, it is time to take advantage of the aggressive rates lenders are currently offering. Eventhough there is room for benchmark Treasury yields to move lower heading into year end, we do not expect MBS prices to benefit from continued gains as the recent strong performance of mortgages has many investors thinking about profit taking....(read more)

HVCC Petition Submitted; Mortgage Rates Hit Floor

Victor Burek — Thu, 19 Nov 2009 17:32:17 GMT

Reports from fellow mortgage professionals indicate that mortgage rates are unchanged from yesterday. The par 30 year conventional rate mortgage remains in the 4.625% to 4.875% range for well qualified consumers. To secure the par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are seeking a 15 year term, you should expect a par rate in the 4.125% to 4.375% range with similar costs. Mortgage rates are testing the lower boundaries of their range. Given the currently expensive prices of MBS, we don't see much room left for mortgage rates to rally. Still in lock mode. ...(read more)

Mortgage Rates Hold Near Six Month Lows. Still Locking Loans

Victor Burek — Wed, 18 Nov 2009 18:29:35 GMT

Reports from fellow mortgage professionals indicates that rates are unchanged from yesterday. This keeps the par 30 year conventional rate mortgage in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are seeking to access equity in your home, you should expect either higher closing costs or a higher interest rate. Is everybody that is closing in the next 30 days locked yet? ...(read more)

Mortgage Rates Marginally Lower. Would You Lock or Float?

Victor Burek — Tue, 17 Nov 2009 17:56:04 GMT

Benchmark Treasury prices and mortgage-backed security prices rallied yesterday. AQ described the inner dynamics of the trade strategy that led to rate improvements READ MORE. In terms of the headline news catalyst for the rally in bond markets, some fixed income friendly verbiage from Federal Reserve Chairman Ben Bernanke gave us a boost late yesterday morning. Reports from fellow mortgage professionals indicate the par 30 year conventional rate mortgage is holding in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. ...(read more)

Mortgage Rates Hold Near Aggressive Levels. Still Advise Locking

Victor Burek — Mon, 16 Nov 2009 15:27:57 GMT

Reports from fellow mortgage professionals indicate mortgage rates are holding steady, near last week's aggressive closing levels. The par 30 year conventional rate mortgage remains in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are seeking a 15 year term, you should expect a par rate in the 4.25% to 4.50% range with similar costs. ...(read more)

Mortgage Rates Inch Lower. Favor Locking Over Floating. Take Your Profits!

Victor Burek — Fri, 13 Nov 2009 18:24:50 GMT

It was a busy day in the rates market yesterday. Although several data releases needed to be digested, the main event was the 30 year bond auction. Recently, while demand for shorter maturity Treasury notes has proven stable in the "post-November 4 FOMC statement" environment, the market has forced yields higher in the long end of the yield curve. Specifically the benchmark 10yr note and the 30 year bond have taken a beating over the past two weeks. Yesterday was the first chance we had to really test market's appetite for longer dated debt investments, which have more of an influence over mortgage rates. Unfortunately, while specific buyers supported the bidding, overall demand was weak compared to previous auctions. Following the release of the auction results, MBS prices plummeted and a few lenders with itchy trigger fingers repriced for the worse. However, soonthereafter the rates market recovered all losses and prices went green on the day! By the end of the day, MBS prices were at their highest levels in quite some time. Most lenders repriced for the better as the gains held until close. To remind readers, as the price of MBS move higher, lenders are able to pass along lower mortgage rates. That momentum has carried over into today as MBS prices are once again slightly higher. ...(read more)

Little Room For Mortgage Rates to Continue Improving

Victor Burek — Thu, 12 Nov 2009 17:45:15 GMT

Early reports from fellow mortgage professionals indicate mortgage rates holding steady. The par 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified consumers. There is not much room for MBS prices to move higher or for mortgage rates to move lower at the moment. If you are happy with the rate being offered to you and don’t want to risk rates moving higher, you should lock today. While there still is some room for MBS prices to tick higher, it is better to have locked when you should have floated than it is to float when you should have locked. ...(read more)

Mortgage Rates Marginally Improved. To Pay or Not to Pay Points?

Victor Burek — Tue, 10 Nov 2009 17:24:00 GMT

Reports from fellow mortgage professionals indicate mortgage rates are marginally improved from yesterday. This keeps the par 30 year conventional rate mortgage in the 4.75% to 5.00% range for well qualified consumers. ...(read more)

Locking Higher Loan Amounts. Cautiously Floating Less Sensitive Files

Victor Burek — Mon, 09 Nov 2009 17:15:00 GMT

I have been using a well defined trading range to gauge my lock/float recommendations. The idea is to lock at the price highs and float at the price lows. On Friday I recommended floating through the weekend, this strategy worked out well as mortgage rates are modestly improved (not big improvements) today. Considering that MBS are holding near the top side of the trading range and as AQ and MG put it, there isn't much room for MBS prices to continue to improve, I have advised a few of my higher loan amount clients to lock in their loans....(read more)

Float Bias Back as Mortgage Rates Hold Steady After Jobs Data

Victor Burek — Fri, 06 Nov 2009 15:43:59 GMT

While price action has been volatile so far this morning, MBS continue to hold in the middle of the recent trading range. Because the Employment report was friendly to the fixed income sector, I am switching my outlook from lock to float. However, because we are seeing better rates this morning, there is nothing wrong with locking today to take advantage of overnight and morning improvements. ...(read more)

Mortgage Rates Hold in Range. Locking Still Favored Over Floating

Victor Burek — Thu, 05 Nov 2009 18:15:53 GMT

With the all important Employment Situation report due out tomorrow morning at 8:30am, floating remains risky. If the report is better than expected, we could see mortgage rates rise quickly. Making this situation extra sensitive is the fact that while benchmark interest rates have continued to rise over the course of the week, MBS have held steady. If the data is better than expected and benchmark rates continue to rise, MBS coupon prices will have more room to fall then benchmark Treasuries. Another problem with floating into tomorrow’s report is that it is released prior to lenders issuing rate sheets. If the data is better than expected, there is no time to get your loan locked before lenders reprice for the worse. Because mortgage rates have held steady in the middle of the range in which we base our lock/float recommendations upon, I would say locking today is still the best move. This range has been our friend, following the strategy of locking at the price highs and floating at the price lows has worked very well over the last few months. ...(read more)

Mortgage Rates Pressured Higher Ahead of FOMC Statement. Did You Lock?

Victor Burek — Wed, 04 Nov 2009 17:09:46 GMT

Mortgage rates ticked higher yesterday as prices of mortgage backed securities were pressured lower by a selloff in the long end of the Treasury yield curve. To remind readers, as prices of MBS and Treasuries fall, their yields or rate increase…price and yield have an inverse relationship. No major report or headline caused the moved lower, AQ and MG point out that it was a function of Friday's bond market rally being unwound before today's Treasury auction announcement and the FOMC meeting which was ignited by a "Build America Bond" issuance pricing in California. Their brains are complicated but we make a good team! Whatever the reason was, price losses held into the close and the majority of lenders repriced for the worse. Reports from fellow mortgage professionals indicate that mortgage rates have moved higher this morning. The par 30 year conventional rate mortgage is now in the 4.875% to 5.125% range for well qualified consumers. To secure a par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including one point loan origination/discount/broker fee. You can elect to pay less upfront fees but your interest rate will be higher....(read more)

Floating is Risky Ahead of Major Market Events

Victor Burek — Tue, 03 Nov 2009 17:16:55 GMT

Reports from fellow mortgage professionals indicate lender rate sheets to be similar to yesterday afternoon’s. This keeps the par 30 year conventional rate mortgage in the 4.75% to 5.00% range for well qualified consumers. To secure the par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you are looking to access home equity, you should expect either a higher interest rate or additional fees. Despite MBS prices holding near the top of the recent range, I will continue to caution floating in the near term. We have some high impacting events approaching, the Treasury Refunding announcement tomorrow morning, the FOMC statement tomorrow afternoon, and the Employment Situation Report on Friday. These events have the potential to move rates considerably. Always remember, rates move higher faster than they move lower. Consumers closing in the near term have more to risk than to gain by floating. ...(read more)

Mortgage Rates in Aggressive Side of Range

Victor Burek — Mon, 02 Nov 2009 18:04:55 GMT

Last week ended on positive note for mortgage backed securities and mortgage rates. As stock indexes fell, market participants re-allocated portfolios from risky assets to safer investments, resulting in added demand for government AAA rated fixed income securities. The benchmark 10 yr Treasury note moved back under 3.40% and MBS closed near their best levels in the past few weeks. Most lenders repriced for the better. Following the release of today’s data, MBS have moved off their recent price highs but continue to hold near the high side of current trading range which I have used to recommend locking or floating. Considering MBS prices are still close to recent highs it makes more sense to lock rather than float, so I would advise anyone closing within the next week to go ahead and lock to remove all chances of a spike higher in mortgage rates....(read more)

Mortgage Rates Back in the Range After Bad Day for Bonds

Victor Burek — Fri, 30 Oct 2009 15:09:47 GMT

Mortgage rates rose yesterday after a better than expected advance read on third quarter GDP sent benchmark yields higher early in the trading session. Making matters worse for the fixed income sector was a recovery rally in stocks and a 1pm Treasury auction. As explained in previous posts, added supply of Treasury debt can have negative effects on yields as traders look for any reason to force rates higher in an effort to earn greater returns. Its the old econ 101 principle: if supply is greater than demand, then prices must fall enough to entice demand. Well...when Treasury prices fall, yields rise, and so do mortgage rates. Yesterday the deck was stacked against the rates market...better than expected econ data, a Treasury auction, and rallying stocks! That's why mortgage rates moved higher.......(read more)