Yo!~

Market held its own today with the FNMA 4.5% LOSING ONLY 12 BPS...

We will hope to see a little upswing as for the next few days and hopefully some pricing improvement again soon. We are all pretty convinced out here that the rates will not fall below 5% again without major investment or some really unexpected news that moves the markets in that direction.

Remember there is a supply vs. demand issue.

There is an OVERSUPPLY of bonds and mortgage backed securities.

1. The feds are peddling T-notes like they are going out of style with another 35 billion dollars worth auctioned off today.

2. The mortgages from the last several months are hitting the markets as securities which adds supply. (Remember that about 60 days after a loan funds, it is essentially sold to the "investors" FNMA, FHLMC, GMNA1 or GNMA2 etc. The "investors" provide money to banks so they can continue to lend...even if they continue to "service" the mortgages they "sell on the secondary market." The "investors" then chop the mortgages up into little pieces and sell them to other "investors" so they can continue to "buy more mortgages" from banks.)

3. FEAR of inflation with the severe dilution of the US dollar with all the money printing going on tends to drive investors away from "fixed" return investments and into the stock market or "inflation protected securities".

The GOOD NEWS: rates are still historically LOW...and it is a GREAT TIME TO BUY.

Remember: we HAVE JUMBOS that have been relatively sheltered for now from the activity of the markets so far...AND METLIFE IS SUBSIDIZING THE RATES ON THEM so the rates are VERY competitive.

Have a great day!