Mortgage backed securities (MBS) close even today at 101..69 while stocks dropped.  Despite the sell off in equities, MBS Bonds were not able to rally becasue of the announcement of next week's Treasury auction volume.  The auctions will consist of  $44 billion 2 years on Monday, $42 billion 5 years on Tuesday and $32 billion 7 years on Wednesday.  Each of these represents a record volume.

We are all forced to live with the Home Valuation Code of Conduct (HVCC) which became law as of May 1 of this year.  The law affects single family loans that are sold to Fannie Mae and Freddie Mac.  Appraisers are still required to  be licensed in the state where the subject property is situated.  The code allows an appraiser to update an appraisal for a second lender if the first lender does not approve the loan.  The intent of the Code is to prevent anyone who might profit by the loan going through from influencing the appraiser.  For loan originators, this means no contact with the appraiser at all.

Mortgage backed securities (MBS) closed down 6 basis points today at 101.69 just above support at 101.50.  Since coming close to 2009 highs on Monday, MBS bonds have slid downward.  Inflatiion readings were slightly higher than expected and traders are concerned about the massive amount of debt our government is adding.  Tomorrow the Fed will announce how many T notes will be auctioned off next week and that could cause further downward movement.

RESPA has some elements that bring the old way of doing business to a halt.  Do you know what RESPA allows a mortgage originator to give in exchange for a referral, as thanks for a referral or even the promise of a referral.  Nothing, zippo, zilch.  On the other hand if you wish to reward your client for his or her business, the sky is the limit.  You can have a mortgage broker sponsor a meeting if no one is singled out.  Lunch at your own open house on the other hand is absolutely forbidden.

Mortgage backed securities (MBS) closed down 12 basis points today at 101.75 below resistance at 101.91.  The MBS bonds traded in a fairly tight 40 basis point range.  Resistance proved too tough even for tame inflation numbers to push through.  Bruyette and Woods agreed today with mortgage maestro Barry Habib that mortgage prices will begin to slide causing interest rates to increase as the Fed's MBS purchase plan wanes.

This week's economic calendar is packed with High and Moderate impact reports.  The week started out today with high impact retail sales.  Tuesday will have the moderate impact Producer Price Index (PPI) and the Core PPI.   Wednesday will bring the high impact Consumer Price Index (CPI) and the Core CPI.  Thursday the moderate impact Jobless Claims report will be released.  The week will end with a bang with the high impact Philadelphia Fed Index.  Expect some volatility ahead.

Mortgage backed securities (MBS) closed up 25 basis points today at 102.00 resulting in eight consecutive days of gains.  A weak manufacturing index reading combined with Fed Chairman Bernanke's assertive comments that inflation will remain low, enabled the improvement.  Once again stocks move forward on the same day as MBS bonds with the Dow closing up 136 points.

A tremendous amount of money is spent each year avoiding estate taxes.  The reason that so much is spent is that the tax man can make half of a large estate disappear.  For those who die testate (with a valid will in place) there are some broad sweeping protecive elements that affect whether or not a tzx will be due.  The first is an unlimited marital exclusion.  This means that everything that passes to the spouse of a decedant is excluded from federal taxes.  The second is that the first $2,000,000. of assets are not federally taxable.  Always consult a qualified estate tax accountant because there are a lot of rules and you want to be on the right side of the tax code.

A tremendous amount of money is spent each year avoiding estate taxes.  The reason that so much is spent is that the tax man can make half of a large estate disappear.  For those who die testate (with a valid will in place) there are some broad sweeping protecive elements that affect whether or not a tax will be due.  The first is an unlimited marital exclusion.  This means that everything that passes to the spouse of a decedant is excluded from federal taxes.  The second is that the first $2,000,000. of assets are not federally taxable.  Always consult a qualified estate tax accountant because there are a lot of rules and you want to be on the right side of the tax code.

Mortgage backed securities (MBS) closed up 25 basis points today at 101.75 having broken through resistance at 101.75 and below the next level of resistance at 101.91.  Good results in this week's treasury auctions combined with the Fed continuing to buy MBS bonds pushed the 4.50% coupon to its highest close since October 8.  Once again today both MBS bonds and stocks were up on the same day.