Localism: Should I float? Should I lock? - Daily Update for Tuesday, February 19, 2008

Here are the daily thoughts on floating or locking if you are asked by your clients.

As always - consult your favorite mortgage professional who will be able to offer the best advice for YOUR unique situation.

No scheduled economic news is on tap for today. Therefore bonds will be taking direction from stocks. Futures for the 3 major markets show marked increases today. This alone has caused the bond to already fall 31 bps.

Technically speaking - the FNMA 5.5% 30 year bond is rapidly approaching the 100 day moving average. The last time it approached this level it bounced off to equal highs of the past 3 years.

The pundits will be suggesting to float as this could be a major spring board to better rates. Since I don't consider myself a pundit - I will suggest folk continue to

Lock.

To learn why one should Float or Lock -

Check out Should I float? Should I lock? & Reasons to Float or Lock

Posted Tuesday Feb 19

(02/19/08 08:21AM) — Kirk Williams, #LMA 510-LO-32537

Could not agree with you more. Nobody knows for sure. 50% of the time by locking you are GENIUS! The other 50% you "woulda, coulda, shoulda".

In the end pigs get slaughtered. If anyone really believes that it would be horrible at this point to have a rate at 6% then I would have you look back 20 years ago when they were over 10%.

Good post.

(02/19/08 08:48AM) — Sherri Sherpy

And as I look this morning, stocks are gaining significantly, based on Walmart's earnings. It will most likely be a bad day for treasuries. Wall Street is SO volitile these days that whenever I get into a conversation with a client regarding locking or floating, I start by saying..."Your crystal ball is just as good as mine."

Great post and let's hope the Fannie 30 year hits that moving average!