For the last few weeks all eyes have been on the FOMC.  The Fed then announced that they would not start tapering off purchases of Treasuries and MBS until they seen continued improvement in economic data.  This resulted in an immediate improvement of .125-.250% in rates.

Continued improvement has been seen based on speculation that any Fed tapering will be far off due to the potential government shutdown.  We have seen rates remain flat, with the improvements occurring in rebate pricing, however to see any significant rate improvement, MBS will have to improve by hundreds of basis points.

As last week continued to show improvement, we switched back to monitoring the FNMA 3.5 MBS as the par coupon.  We believe to be a good sign for improving rates over the next couple of weeks.

However, always be prepared for a sudden market reversal and work closely with your Mortgage Loan Professional to protect your interest rate.

- Michael Corboy
www.specialtyfinancialservicesmtg.com