MBS Recap and Forecast

Yesterday the MBS market was extremely volatile, bouncing up and down within a 32 basis point channel. The end result was an 11 basis point improvement, but most likely this gain on the day will not guarantee better rebate pricing as lenders were reacting to the market volatility through the day. Yesterday's activity did push us right up against the 102.00 resistance level, so we will want to watch that closely.

Today mortgage rates are once again at a crossroads where economic data releases will drive the direction of rates. If the Non-farm Payrolls show a strong economic outlook, be prepared for MBS to sell off, leading to higher mortgage rates. It is our belief that this is the more likely outcome. However if traders find weakness in the Non-farm Payrolls number, we could once again break above the 102.00 resistance level and see interest rate improvements. So today, like yesterday, be ready for volatility, and be ready to react. It is best to remain in contact with your Mortgage Professional, who is also monitoring the MBS market in real time and is your best resource to stay ahead of lender's pricing reactions to the market.

Remember, if you want to know the benefits of locking your rate today versus floating, simply contact your Most Trusted Mortgage Loan Professional who has access to real time Wall St. data and instant market alerts with breaking news.

- Michael Corboy
www.specialtyfinancialmtg.com