Should I float? Should I lock? - Daily Update for Thursday, March 20, 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.

Good News yesterday.  The government oversight of Fannie Mae and Freddie Mac was lifted slightly.  Because of all the troubles that Fannie and Freddie accountants seemed to have with numbers (I imagine it wasn't their fault), government regulators insisted that the two companies have an excess 30% in cash on their books to cover accounting irregularities.  This was relaxed by 10% yesterday.  While 10% doesn't seem like a lot, it translates to roughly $200 Billion. 

Some Good News this morning as well for bonds.  Jobless Claims were about 6% higher than expected.  The big news of the day though will be the release of the Philadelphia Fed Index at about 10 AM  This will give some guidance to the state of the economy.

Technically speaking - the FNMA 5.5% 30 year bond clawed its way back up to 2.5 year highs yesterday.  It is now bumping up against a major level of resistance.  If the 10 AM report is not at all what is expected, the bond will fall back again. 

I am still in a conservative mood.  Though rates have improved significantly over the past week I still suggest you the consumer to    

     Lock your interest rate.

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