Posted To: MBS Commentary

Let's do the simply-worded conclusion right up front. For fans of low rates, the Fed's inclusion of 1.5 MBS (30yr) is a good thing, but not some new and wonderful guarantee of ongoing improvement. It's more of a byproduct and less of a root cause. It's a sign that MBS have finally caught up to levels that make sense and that lenders have finally cleared enough of the pipeline backlog to offer rates they could technically have offered months ago. But those rates didn't make a lot of sense to offer when 2.0 UMBS was the lowest coupon bucket they could fill (if that's confusing, check out the MBS 101 series in the MBS Live knowledge base. Also make sure you understand which rates go into which coupons ). Unfortunately, it's always a slow, careful slog when it comes…(read more)

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Source: Mortgage News Daily