WOW. The FNMA 4.5% bond closed out the day at $102.90. This is as high as it has been and mortgage rates out of my office in Bozeman Montana and elsewhere continue to tumble.
The FNMA 4.5% bond is actually so high valued and rates are so low that it becomes appropriate to start watching the FNMA 4.0% bond. We haven't watched that one since rates were at their lowest last year.
Remember that watching the FNMA 4.0% bond represents watching how the market receives 4.5% mortgages that have been securitized.
Hungary?
Hungary has come into the spotlight as speculation was raised as to whether or not they are the next "financial crisis". They insist they are not. Check out the article in the New York Times for more info.
They are not a member of the European Union so they do not affect the Euro...directly. However, when their money is down vs. the euro: they do not tend to purchase goods and services that are priced in "Euros" as they are then "more expensive" with the conversion rate.
In the last several years: many of the mortgages obtained in Hungary have been from banks in the European Union.
When their money is "down" vs. the Euro:
1. They are a market segment that would then take a dive for banks in the E.U. providing them with mortgage financing.
2. Making their mortgage payment becomes MORE difficult when it takes more of their currency to convert to Euro to make the payment.
In other words the worry is that default rates could go up while business goes down.
Cheers!
Chad
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com
