Prices of stocks, bonds and Mortgage Backed Securities (MBSs) are lower this morning after the House passed the $819 billion "stimulus bill" late yesterday. A bill to allow judges to "cram down" mortgage debt in bankruptcy proceedings also passed a House committee yesterday.
The 30-Year FNMA 4.5% coupon is now down 15/32 due to the massive supply of government debt.
Remember, on MBS, as the price goes up, the yield goes down - and mortgage interest rates go down with it. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. Expect mortgage rates to get worse this afternoon.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB