MBS RECAP: 1/24/2012

Fannie 3.5’s are back to their 101-19+ pivot. Anything below that is more likely reprice territory, but even with the existing amount of weakness, MBS have fallen almost 8 ticks in 2 hours. Benchmarks are looking like they might be willing to drift slightly higher. Risks are simply increasing, even if we’re not yet at levels where we’d expect most lenders to reprice.

Same old drill… Some of the “early crowd” might reprice at current levels, but a majority of lenders would not reprice unless we’re falling definitively below the pivot point (101-19+ to 101-20). So depending on the lender in question, we’d keep on eye on those levels, and possibly set an automatic alert for 101-18. We may well avoid most reprices if MBS are able to continue holding sideways support.

Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/244457.aspx

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