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What Makes Me Scream

By Lonnie Glessner

Mortgage and Lending with America's Mortgage LLC

November 20, 2008 08:36 AM

Nothing makes me scream louder than Mortgage Professionals telling people that mortgage rates are tied or linked to the 10 Year Treasury Bill. Plus hundreds of "Talking Heads" in the media believe and say this as well.

NO THEY ARE NOT!!!!!!!!!!!!!!!

The last 2 days of trading make my point as the 10 Year Treasury Bill is up over 400 basis points in price as the yield has plummeted over 1/2% to 3.01%. Today, the 30 Year Treasury Bond's yield dropped .64%.

But, in the last 2 days the 6.00% Fannie Mae 30 year bond has gained a grand total of 11 basis points in price!!! And mortgage rates have remain unchanged. You see mortgage rates are directly correlated with the sale of mortgage bonds and nothing else.

If your client's Mortgage Professional ever says that mortgage rates are tied or linked to the 10 Year Treasury Bill, please please tell them that they are wrong. Then, advise your clients to work with a Mortgage Professional who knows the TRUTH.

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Beth Forbes

The mortgage help you want when you need it. - Center Valley, PA

Your 24/7 loan officer

Well back in the days of the dinosaurs the T-Bill was a pretty accurate way to determine what mortgage rates would do. Obviously that isn't so much the case these days but don't blame us old timers for occasionally slipping into old habits.

Nov 20, 2008 08:42 AM

Dean Moss

Dean's Team - Keller Williams Realty Partners Chicago IL - Chicago, IL

Dean's Team Chicago IL Real Estate Team

Lonnie -

Thanks for the clarification - I thought this to be true as a Realtor, but, often, by inexperienced lenders, often representing buyers for my listings, I get a different tale.

Should there be national standards for education and knowledge. Or, at least, if you're not sure about something, don't pretend you know what you don't know!

My thoughts, anyway!

DEAN & DEAN'S TEAM CHICAGO

Nov 20, 2008 08:57 AM

Joan Whitebook

BHG The Masiello Group - Nashua, NH

Consumer Focused Real Estate Services

I am surprised how many time this misinformation is stated by the various "experts"! Thanks for clarifying again!

Nov 20, 2008 09:22 AM

Lonnie Glessner

America's Mortgage LLC - Littleton, CO

I wish they were higher educational standards in my industry. Here in Colorado I am finishing up my 40 hours of education that is required to obtain my newly required license in my state. And there was nothing about this in those 40 hours of education. Over 30 hours of the class are about legalities at the federal and state level and almost nothing about mortgages. Ugh!

Nov 20, 2008 10:42 AM

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Lonnie Glessner

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