Posts Tagged ‘ mortgage-backed securities ’

National Mortgage Rates Report: April 29, 2008

No real change in my posture. I still believe that national mortgage rates have room to go lower in the next 30-90 days but I’m advising clients who are closing in less than 17 days to lock. All others can float.

Mortgage-backed securities traders have “baked in” a .25% rate cut from the Fed when they meet tomorrow. If Bernanke doesn’t cut, mortgage rates will jump quickly. This week is filled with economic data.

If the data are reported weaker than the estimates, we could see lower mortgage rates in the next week. The risk of that not happening, in this volatile market, is real so I’m sticking to the recommendation of locking your loans if you are closing before May 15.

Countrywide Financial reported a big loss from foreclosures while MasterCard reported huge profits. While MasterCard doesn’t actually issue the cards (they just make money from transactions), it shows that people are walking away from their mortgages and using credit cards more frequently. Continue reading this post


Posted by: Brian Brady on April 29th, 2008 under Financing, Mortgage and Home Loans


National Mortgage Rates Report- Mar.18, 2008 – Fed Cut .75%

The Federal Reserve Bank Cut both the discount rate and federal funds rate .75% today in an effort to stimulate this slowing economy.

While commodities’ prices accelerate, the housing market and subsequent liquidity crisis is dragging the economy into a recession.

We call this phenomenon stagflation and it’s REALLY bad for the economy. The Fed has been aggressively cutting interest rates and the declining housing market is closing down mortgage companies, investment banking firms, and real estate brokerages. What more can the Fed do to help?

The Fed can (and will) buy mortgage-backed securities.

Rather than to buy treasury notes in the open market, the Fed will be buying mortgage-backed securities. They will want to get those assets off investment banking firms’ balance sheets and provide stability to the MBS market. Remember when I said that only the uneducated pay attention to the treasury note to determine the direction of mortgage rates?

Today is proof.

The spread between treasury notes and mortgage-backed securities has been widening these past six weeks. Why? America was considered to be a sub-prime nation; everybody was expected to default on their home loans. Expect the Fed to prop up the MBS market in the next 4-6 weeks. That will be bad for treasury notes and good for MBS. Continue reading this post


Posted by: Brian Brady on March 18th, 2008 under Financing, Mortgage and Home Loans

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What MUST Your Mortgage Professional Know?

A common misconception held by most real estate agents is that the 10-year US treasury note drives mortgage rates. Some loan originators believe that to be fact as well.

That statement isn’t true.

Mortgage-backed securities (MBS), or mortgage bonds, cause mortgage rates to fluctuate. Often mortgage-backed securities act in concert with the 10-year U.S. treasury note; most fixed-income securities do. Sometimes, they move in opposite directions; that’s when the folks that follow the 10-year treasury note get caught with their pants down.

Consider this first chart, provided by

It’s easy to see that Continue reading this post


Posted by: Brian Brady on February 14th, 2008 under Guest Bloggers


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