Mortgage Backed Securities (MBSs) continues their volatile trading trading today after spiking up 11/32 at the opening bell. The 30-Year FNMA 4.5% coupon is currently trending downward and is now trading below the yesterday's close. Mortgage rates may get worse in price before the close of business today.
Meanwhile, the Obama administration may be considering shelving its plan to create a "bad bank" to purchase "toxic mortgages" from banks. The problem lies trying to place a value on those assets so as not to hurt banks while at the same time not bail them out. An announcement for a "bad bank" plan was scheduled for early next week. Now the Obama administration is considering an insurance or guarantee program, and a plan won't be announced for at least another week or so. For more details, watch this video at http://www.cnbc.com/id/15840232?video=1018074662.
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Lew Corcoran, Sr. Mortgage Consultant in Massachusetts |
