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Federal Reserve MBS Purchase Program





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MBS UPDATE: Selling Continues

by Matthew Graham
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Not much change from last but to reinforce downward price pressure.  Now down to 100-21 in 4.5s,  additional reprice risk if you haven't seen it already.

 

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Martin Barbee  |  Contact or Connect with this Member
on
Reprice from AmTrust. I think the government needs to reset expectations and soon. I have clients that can save now but won't do anything because of the rates that keep popping up in the press. They have really screwed up a good thing for the consumer.
CDM  |  Contact or Connect with this Member
on
I agree with that. Too many people think rates are 4% now or soon. Any clue when something is supposed to roll out?
Craig  |  Contact or Connect with this Member
on
I have clients in the same boat. I have been telling them to lock for weeks and they keep holding off for 4.5% based on what they hear on the news.
Nothing to see  |  Contact or Connect with this Member
on
Craig - Where are you recommending your clients lock? I would be satisfied with 4.75 and 0/0, but can't find that anywhere.
CDM  |  Contact or Connect with this Member
on
I know Obame said something is coming out this week. Any clue what???
Mike  |  Contact or Connect with this Member
on
I'm glad I'm not the only one, and where rates are today, it's not that beneficial for them to refi. So now we wait for where rates were a few weeks ago....hopefully then they will listen to me
CDM  |  Contact or Connect with this Member
on
I know I just wish we could somehow get back to Jan6th-8th rates. 5% paying 1.5% on FHA is perfect for streamlines.
Mark H  |  Contact or Connect with this Member
on
We may not agree but the market is always right. I believe rates will drift lower with Fed intervention, however, I suspect the headwinds are greater then they expected.
Adam Dahill  |  Contact or Connect with this Member
on
Locked one this morning, still got a ton floating. I'm in NYC and all the files either require a CEMA or they are COOPs both of which take weeks to close. You're lucky if a 45 day lock will do more like a 60 day and the rates are horrible that far out. Just got to hang in there. Literally have a dozen of clear to closes hanging around waiting for rates to dip.
Adam Dahill  |  Contact or Connect with this Member
on
I'm still getting emails from clients saying that they heard rates got better and if they can lock the 4% rate they heard they could get with no points. They look at me like I have three heads when I tell them they are wrong. Very frustrating. Wasn't the Fed buying 3.5% and 4% coupons yesterday?
CDM  |  Contact or Connect with this Member
on
I try to tell people that rates have actually gone up since the beginning of the month and they think something is wrong. I just hope this govt actually delievers or else clients will miss out on great rates.
CG  |  Contact or Connect with this Member
on
Matt, I hope one of you can explain the GOP Senate push to reduce rates to 4% in the stimulus bill being presently debated. I'd be very interested in your take on how that would be accomplished and how quickly it would go through.
George Chamberlain  |  Contact or Connect with this Member
on
Per article from MBA, it looks now like the so called "Experts" are now not worried about the funds buying up MBS now, but, OH MY, "What will happen when the funds are used up in June"?? IDIOTS! Mortgage Rates Tick Up, Despite Fed Efforts Wall Street Journal (02/03/09) P. C2; Natarajan, Prabha> A move by the U.S. government and the Obama administration to reduce borrowing costs could face challenges, as Bankrate.com data shows the 30-year fixed mortgage rate has risen to 5.34 percent from a low of 4.875 percent in early January, when the Federal Reserve agreed to purchase $500 billion in mortgage bonds by June. Mortgage interest has climbed because more borrowers refinanced when rates fell and boosted the supply of mortgage bonds; but experts also attribute rising rates to expanded borrowing by the government to pay for stimulus packages, worries about Fannie Mae and Freddie Mac and concerns about whether the central bank will continue to purchase mortgage bonds after June.
CDM  |  Contact or Connect with this Member
on
Would we be able to get down to 4% if they truly guaranteed these loans?
Kim Mackay  |  Contact or Connect with this Member
on
My head hurts..........
CDM  |  Contact or Connect with this Member
on
I just wish we some sort of clue where things are going. Govt and media say one thing and the truth is the exact opposite so far
George Chamberlain  |  Contact or Connect with this Member
on
What irks me is that the article states "More borrower's refi'd when rates fell and boosted the supply of MBS". How long did that last? 2 weeks, tops. Something does not seem right!
Johnny C  |  Contact or Connect with this Member
on
with a budget of $500 billion, if a refi boom really did occur, imagine how fast that money would evaporate. yes, the fed is purchasing 5.5 notes, that once repaid early, can be used to purchase more, but how long that last? also, i remember someone posting that the russians dumped their MBS portfolio, which could explain part of the increase in supply story. also, the chinese... i'm also confused about what the government really means by "guaranteeing" 4% loans. wouldn't that make MBS' as "risky" as tsy, thus tightening the yield differences between the two?
Edgar  |  Contact or Connect with this Member
on
It is extremly frustrating the gov't keeps mentioning 4-4.5%...and it will be even more frustrating if they do not deliver. If we are so lucky to get another week or two of below 5% rates, it will be a mad dash to lock in rates. I have major concerns about the economy (how fast it's tanking..did you see auto sales today??? UGLY), the amount of debt the US is taking on and countries like Russia saying they will no longer buy MBS (they've sold everything recently). Another problem (that is no being talked about) that I'm seeing is the start of more lenders closing up. I wont post the lenders (we all know the blog that posts them) but another one closed today. As more and more lenders close, that will only continue the problem of 4 week underwriting times and inflated rates. I am remaining positive, but I think there are some serious issues that most people are ignoring.
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