Market Update 7/23/2008

Mortgage and Lending with CYPRESS MORTGAGE

Treasuries fell for a second day as traders pushed yields to a one-month high before a

record sale of two-year notes and concern dropped that financial companies' losses

will widen, easing the haven appeal of government debt. Two-year note yields climbed

for a second day ahead of the sale of $31 billion of the securities today, while yields on

benchmark 10-year notes increased to the highest since June 25. Lawmakers reached

agreement yesterday on a plan to support Fannie Mae and Freddie Mac, adding to

speculation the U.S. will sell more debt to pay for the rescue estimated by the

Congressional Budget Office to cost $25 billion over two years. The 10-year note's

yield rose 3 basis points, or 0.03 percentage point, to 4.14 percent at 8:44 a.m. in New

York, according to BGCantor Market Data. The 3.875 percent security due May 2018

declined 1/4, or $2.50 per $1,000 face amount, to 97 29/32. two-year note's yield rose

7 basis points to 2.78 percent. Market is relatively unchanged this morning.

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