Bond Bombshell

By
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #208860

pinataIt's 2:45 EST and the bond market is getting whacked harder than a pinata at a 4-year old's birthday party.  Since my blog posting this morning, the Fannie Mae mortgage-backed securities fallen even farther down the rabbit hole and the currently stand at -50 bps.  That's a hefty loss.  Turns out the bond traders figured out that a lot of the financial news coming out as of late points to a serious risk of inflation poisoning our economy.

This is bad news for bonds and the lenders are feeling it.  I am getting intra-day reprices for the worse as I type this and that means rates are climbing higher.  I locked in two clients early yesterday and got them amazing rates on 30-yr fixed mortgages.  Luck?  ESP?  An overdeveloped cerebellum?  Hardly.  I just study the markets and pick up on trends.  Bonds were overbought and were looking for reasons to sell off and they found just that in the PCE Number (see earlier blog post).

Feel free to comment or ask questions as I am grateful and excited to be part of the Active Rain community.  Hope everyone has a Blue Skye weekend!

Comments (5)

Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!
Timing is everything in this business.  I truly hope that inflation does not rise dramatically.
Dec 21, 2007 06:37 AM
Mike Tullio
Guaranteed Rate NMLS# 2611 - Sarasota, FL
VP of Mortgage Lending
You are right on the money Lola.  Timing is key and having accurate and useful information can make all the difference.  The FED won't let inflation get much higher than it is right now.  Their goal is to stay between 1-2% a year and we are at 2.2%.  The FED will actually raise the FUNDS RATE if they have to slow things down and control inflation, so we're not in any danger.  What an amazing economy we have.
Dec 21, 2007 07:00 AM
Dan Forbes
Bradenton, FL
Mike, Hi.  I arrived in Austin today and will be here for the Holidays.  I'm glad to see you blogging.  Good job.
Dec 21, 2007 07:17 AM
Mike Tullio
Guaranteed Rate NMLS# 2611 - Sarasota, FL
VP of Mortgage Lending
Glad you landed safely and I want to sincerely thank you for inviting me to join the Active Rain family.  It's only been 24 hours, but I'm already feeling a part of what's going on here.  Look forward to getting together and hearing your thoughts on how to get the most out of this opportunity.  Enjoy your time in TX!
Dec 21, 2007 07:25 AM
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Mike,

Dan Forbes sent me over before he left for Austin.  Welcome to Active Rain!  Dan will be an excellent mentor for blogging for dollars in the Rain.  This stuff really works, but you have to work it to make it work.  ...how much wood would a woodchuck chuck...  LOL

Mike in Tucson

Dec 21, 2007 11:06 PM