Hey AQ, I've been staring at the computer and on the phone all afternoon. My eyes are burning and my head is mush. Can you be a little more clear? I'm thinking your still in lock mode, but with increased purchases won't that improve things? Mentally spent yours, Jeff

im locking loans.

just locked today for 30yrs at 4.5% paying 0.25% point. is it good deal?

Vish it is good deal......now pass the vodka...

Still don't think FHA is about to explode and crumble like sub prime? One of the largest home builders says it is and it's only months away: “Yesterday’s subprime is today’s FHA,” Toll said today at a New York conference for builders sponsored by UBS AG. “It’s a definite train wreck and the flag will go up in the next couple of months: Bail us out. Give us more money.” Toll Brothers is largest U.S. luxury homes builder (http://www.bloomberg.com/apps/news?pid=20601087&sid=arqAG5n7wEVw&pos=3). Who owns FHA-you do, well our government does. Add Fannie and Freddie to the mix and the government is on the hook for 6-7 trillion dollars worth of mortgages. Add the Fed's 1.2 trillion and the two them own just about everything. I believe there is an estimated 11 trillion of mortgages outstanding, and we as a country own around 70% of them. The more this sinks in the more you realize the goverment and the Fed will never leave MBS. They can't. They can't because no one will step in and fill that gap. Heck, no one want's to. As unemployment goes up, as default rates go up, more and more investors will leave the mortgage market, and the government and the Fed will be forced to add further funds. Didn't we all worry about rates at the end of 2009 as the program came to an end? Late Spring/Summer I thought for sure, 100% Oct-Nov. would be a freak'n disaster as rates pushed up....but they haven't and they won't. Sure we'll get a run up at some point ala black wed, but long term sub 5 rates are here to stay and I think sub 4 rates are in the cards over the next 2-3 years. Without them, this country falls apart and I think the Fed and the government know that.

Edgar, i agree with you that the Fed cannot afford to leave the MBS market, but here is the thing; Quantitative Lending is not sustainable and at sum (pun intended) the Fed has to pull the plug on the MBS purchase program. The issue is that they are hoping (read into hoping r.e. the plan is not working) that the recover comes before the printing presses run out of ink. China is openly questioning our President and how he is spending money (i.e. what is the tab for healthcare) and pointing to why are they spending a gagillion $$ in our bond market. The Fed cant afford to leave MBS, but in the long run they cannot, and will not afford to stay in

Quantitative Lending is not sustainable -agree. In fact earlier this year I psoted a ton of times that the government/fed intervention would only lead to disaster. Much like a crack head knows it needs to stop, a crack head never does. That is until the crack head is dead. I thought financial disaster would arrive quickly once the government/fed stepped in, but now think this is a long saga with many chapters. Sometime over the next 5-10 years the day will come when the government and the fed are BK. We went from 5-12 trillion dollars in debt during the last 6-7 years, and I would not be surprised if that number double over the next 4-5 years. Think our GDP will rise fast enough to counter 20-25 trillion in debt as baby boomers add another drain on the government's budget? Social security was suppossed to have enough money until 2017, but that quickly reversed this year to show it may go negative as earlier as next year. 35 million people receive food stamps, and every month it's a new record high. True unemployment is approaching 18%, tax revenues are down and many states like CA are BK just no one wants to admit it.

Thank you Fed!!