Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on April 20, 2010

Locking Stance: LOCKING    Mortgage Bonds: –3bp

Mortgage backed securities took a dive yesterday and have virtually scrapped hope again.  It is a very interesting chart that has developed, one which shows traders are generally confused and without genuine direction.  With MBS prices having broken through their 25-day moving average last week, fairly solidly I might add, one would think they were going to hold their ground.  However, as I mentioned yesterday, there was still plenty of negative indications begging to question their ability to maintain their gains over the long-term.  Well, yesterday showed their inability as they closed down 31 basis points, and even back below their 25-day MA.

Once again, we see no data significant enough to generally move the markets, with only the ICSC-Goldman Store Sales and Redbook, along with the 4-week Treasury Auction.  Yesterday’s Treasury Auctions were met with very strong demand and with yields holding steady, but MBS prices fell nonetheless.  Ben Bernanke prepared comments for today’s testimony before the Committee on Financial Services, noting the need to fill the gaps in our financial regulatory framework and essentially eliminate “too big to fail”.  He cited the fact Lehman did not fall under the Fed’s supervision, and essentially that needs to change.  The government is taking over everything else, why not our investments too?

What does this mean for Mortgage Rates?  Expect the bumpy ride to continue.  The short-term still offers a ray of hope, though it is rather dim, while the long-term is still for higher mortgage rates.

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