MBS RECAP: 2/10/2012


As we said earlier in the day, lenders are normally more conservative with positive reprices around the MBS Settlement cycle, not to mention the same is also true for Friday afternoons. So all we can really say is that the shape of MBS trading today is similar to past examples that have resulted in positive reprices. Fannie 3.5’s haven’t made any tremendous gains, but they’ve been in a fairly narrow range between 103-15 and 103-17 cine around 11am.

This is better than the 103-13 to 103-14 range that was prevalent when most lenders were releasing rate sheets, but more important than the range was the fact that the direction of bond market trading still looked a bit uncertain this morning, whereas now we look to be out of the woods, so to speak, with respect to seeing losses on the day.

Bottom line, it’s possible we see a reprice or two, but not necessarily likely given the environment. So the better take-away may be that we’re not looking like we’re at much risk of negative reprices for those inclined to float until cut-off or beyond.

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