After yesterdays roller coater ride, Mortgage Backed Securities (MBS) are flat in calm trading. Yesterdays roller coater left investors unsure of where to price. In result we lost ground on rates and yield.

Today's economic reports confirms continued weakness for labor market and manufacturing sector, signaling a deeper and longer recession.

Historically, mortgage rates should/could be lower; the spread between 30yr fixed and FannieMae (FNMA) current coupon averaged 0.14% over the last 5 years.

Today the spread is 1.4% reflecting uncertainty about how many applications will turn into loans from this recent refinance boom.

Now that the rollercoater has found flat ground, I hope to see the benefit passing through to you the customer, in terms of low rates and low origination. Stay tuned!

Cheers,

Ian R Bennett

Mortgage banker