Garrick Werdmuller

Mortgage backed securities (MBS) prices are higher (rates lower) in volatile trading amid speculation banks may need additional infusions of cash after the stress tests of balance sheet strength are completed; FNMA 4.0% coupon 100.03bps, +19bps and the high of the session. MBS markets are again taking their lead from the stock market this morning, DOW is down 100pts so money is moving out of equities and into fixed income assets like MBS. The Fed is prepared to buy U.S. government securities today and tomorrow in an effort to cut borrowing costs. 30yr mortgage rates rose to 4.87% from 4.78%, a record low, last week and are 197bps above the 10yr note, widening from 146bps two years ago. That half a point would be welcomed by all. No economic data will be released today, but the rest of the week will be busy.

Fannie and Freddie rolled out their DU Refi Plus this week. In a nut shell, these Limited Cash Out refi's allow a greater level of flexibility for Fannie & Freddie serviced homes. To clarify, if the loan was original sold to Fannie or Freddie for servicing then they may be elegibile. To determine whether they are presently serviced by Fannie or Freddie you must access their site. The links are attached and the steps are pretty self explanatory.

Fannie: http://www.makinghomeaffordable.gov/
Freddie: http://www.freddiemac.com/

As long as one has good credit the rates and terms are phenomenal! One can refinance their home at 105% loan to value and get a rate in the mid 4's! The guidelines would turn this into a very long blog so contact me for details and I can pre qual you quickly into a lower interest rate and payment.

Mortgage backed securities (MBS) prices are lower (rates higher) as the Treasury prepares an auction of $18 billion of 10yr notes and global stocks advanced; FNMA 4.0% May coupon 100.03bps, -19bps and the low of the session. Monthly rollover took place overnight, switching the current coupon from April to May. May MBS prices reflect a drop of about 31bps from April. The change is priced in over the course of the month so the impact on mortgage rates on the day of the rollover is generally no greater than on any other day of the month. U.S. stocks surged after Wells said 1st quarter earnings will be better than expected. Jobless claims fell 20K to 654K, but benefit rolls rose to a record 5.84 million, indicating little let up in labor force contraction. U.S. trade deficit unexpectedly narrowed 5.1%,the lowest level in 9 years as demand for Asian cars, toys and electronics collasped and exports climbed from a 2yr low as sales of pharmaceutical supplies, autos and telecommunications equipment improved. The report emphasizes how much consumers and businesses have pulled back on spending. Import prices rose 0.5% in March due to price of petroleum products jumping 10.5%; ex-oil prices fell 0.7%. Export prices are also showing contraction, down 0.6%. MBS markets will close early today at 11am pt and will be closed tomorrow for Good Friday. Happy Easter and Passover!

The month of April starts off with the all important March Employment report released on Friday the 3rd giving insight on the labor market, unemployment rate and wage inflation. The second week of April has a light economic calender with the FOMC minutes on Wednesday the 8th and Jobless claims on Thursday the 9th. The Treasury also auctions 3yr & 10yr notes this week. Tuesday April 14th brings Retail Sales data and the Producer Price Index (PPI), followed next on Wednesday April 15th with Consumer Price Index (CPI), Industrial Production and the Fed's Beige Book. The week winds down with Housing Starts and the Philadelphia Fed Index on Thursday the 16th, finishing with the Consumer Sentiment report on Friday the 17th. Another light week of economic data follows with only Leading Economic Indicators on Monday the 20th, Existing Home Sales on Thursday April 23rd and Durable Goods Orders on Friday the 24th. The final week of April provides Consumer Confidence information on Tuesday The 28th, Advance Gross Domestic Product(GDP) the 29th and Thursday the 30th Personal Income/Spending and Chicago PMI completes the month.

Mortgage backed securities (MBS) prices are lower (rates higher) after release of March Employment figures as traders refocus on the record amount of government debt needed to be sold to end the recession; FNMA 4.0$ coupon 100.19bps, -11bps. The economy lost 663K workers in March bringing the total losses since December 2007 to near 5.1 million. The Unemployment rate climbed to 8.5%, the highest level in 25 years, threatening to keep spending subdued for months and delay any recovery. The job cuts have been spreading from manufactures to service providers and employers are also cutting back on hours. Average work week shrank to a record 33.2 hours in March. ISM non-Mfg index fell to 40.8, more than expected, pointing to a deepening contraction. New orders, employment and prices paid components all fell indicating slowing business conditions ahead. On a positive note, no primary dealers submited bids to tap the Fed's Term Securities Lending Facility (TSLF)to help firms meet short-term funding needs indicating more optimism regarding ways to finance holdings of less liquid assets like MBS. TGIF!