{"id":2663,"date":"2008-02-26T12:50:47","date_gmt":"2008-02-26T19:50:47","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=2663"},"modified":"2008-02-26T12:50:47","modified_gmt":"2008-02-26T19:50:47","slug":"once-more-with-feeling-mortgage-rates-are-determined-by-mortgage-bonds-mbs-not-the-ten-year-t-note","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2663\/once-more-with-feeling-mortgage-rates-are-determined-by-mortgage-bonds-mbs-not-the-ten-year-t-note\/","title":{"rendered":"Once More With Feeling- Mortgage Rates Are Determined by Mortgage Bonds (MBS), Not The Ten Year T-Note"},"content":{"rendered":"

Mortgage rates are volatile today…very volatile.\u00a0 There are two underlying factors contributing to the volatility: suspicion of the credit quality of the MBS market and supply\/demand imbalance (more people want money than is offered).<\/p>\n

Why am I so adamant about the fact that the ten-year treasury note is not the determining factor of mortgage rates?\u00a0 The statement is factually incorrect.<\/a>\u00a0<\/strong> While the two securities often move in concert, polarity can occur and sometimes does; this is one of those times.\u00a0 The ten-year T-note is considered the benchmark, not bellwether fixed-income security.\u00a0 This means that all other securities are compared to the 10-year T-note (we call that the “spread”).\u00a0 It is GENERALLY a guiding indicator of ALL rates, however, in times or crisis or exuberance, it can’t be relied upon for other fixed-income securities’ direction.\u00a0 Spreads to the T-note widen and narrow due to extraneous variables.<\/p>\n

The real estate industry is calling for higher professionalism among lending professionals.\u00a0 Some REALTORs, however, are clinging to\u00a0 the demonstrated neglect\u00a0the mainstream media delivers\u00a0<\/a>(check the comments).\u00a0 An argument that bankrate.com is the source of mortgage rate movements, because the “most originators use it”, is akin to suggesting that Zillow.com is superior in home pricing than the Multiple Listing Service.<\/p>\n

Mortgage professionals have at least three MBS quote services available:<\/strong><\/p>\n

1- Mortgage Market Guide ($100\/month)<\/p>\n

2- MBS Quoteline ($50\/month)<\/p>\n

3- Rate Link ($45\/month)<\/p>\n

Four originators (Me, Dan Green, Rhonda Porter, Mike Mueller)\u00a0 with a combined 2007 funding production in excess of $100 million, subscribe to MBS pricing.\u00a0 Why?\u00a0 We’re mortgage professionals.\u00a0 We see the need to invest $50-$100\/month in the tools that serve our clients’ best\u00a0interests.<\/p>\n

What can REALTORs do today, to help the mortgage industry improve its professionalism?<\/strong>\u00a0 Well, you don’t have to rely on the government<\/a>\u00a0to make the world a better place.\u00a0 Get educated by professionals in the know, and start asking loan hacks which MBS pricing service they have.\u00a0\u00a0<\/p>\n

Would you refer a client to a REALTOR that didn’t subscribe to the MLS?\u00a0 Of course not.\u00a0 Why?<\/p>\n

Your clients are much too important.\u00a0 Choose mortgage professionals carefully.<\/p>\n","protected":false},"excerpt":{"rendered":"

Mortgage rates are volatile today…very volatile.\u00a0 There are two underlying factors contributing to the volatility: suspicion of the credit quality of the MBS market and supply\/demand imbalance (more people want money than is offered). Why am I so adamant about the fact that the ten-year treasury note is not the determining factor of mortgage rates?\u00a0 […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[],"class_list":{"0":"post-2663","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2796,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2796\/will-the-fed-buy-mortgage-backed-securities-in-the-open-market\/","url_meta":{"origin":2663,"position":0},"title":"Will the Fed Buy Mortgage Backed Securities In the Open Market?","author":"Brian Brady","date":"March 18, 2008","format":false,"excerpt":"I never post my Mortgage Rates Reports here.\u00a0 They're boring unless you are thinking about buying a home or refinancing your mortgage.\u00a0 Today, it seems plausible that the Fed is shifting its open market activities from buying treasuries, to buying mortgage-backed securities, in order to bolster liquidity in the mortgage\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3188,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3188\/mortgage-rates-higher-at-the-end-of-may\/","url_meta":{"origin":2663,"position":1},"title":"Mortgage Rates Higher at the End of May","author":"Brian Brady","date":"May 29, 2008","format":false,"excerpt":"Here's how bad it gets when the mortgage-backed securities market deteriorates: From May 21: This is a chart for the last 30 days for mortgage-backed securities.\u00a0 When MBS prices go up, mortgage rates come down.\u00a0 In this case, I noticed a meteoric rise in MBS prices in the last week\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8627,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8627\/lower-june-2009-mortgage-rates-rely-on-central-bank-action\/","url_meta":{"origin":2663,"position":2},"title":"Lower June, 2009 Mortgage Rates Rely On Central Bank Action","author":"Brian Brady","date":"May 28, 2009","format":false,"excerpt":"May Day in the mortgage rates market is over.\u00a0 The market got spooked by triangulated opinions about the viability of the US Treasury as a going concern.\u00a0 In response, mortgage traders sold off mortgage-backed securities, some 3-4%, in 4 days, to drive mortgage rates from 4.75%\u00a0 to the 5.375% current\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1147,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1147\/bad-loans-buried-in-the-back-of-the-breadbox\/","url_meta":{"origin":2663,"position":3},"title":"BAD LOANS: Buried In The Back Of The BreadBox","author":"Brian Brady","date":"March 14, 2007","format":false,"excerpt":"Let me tell you a story about how the subprime mortgage market collapsed and millions of baby boomers had to accept less money in retirement. If you liked the Da Vinci Code, you're gonna love this one. It's not wrapped up in sex, or murder, or corruption, just good-old fashioned\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4455,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4455\/leveraged-loser-loans-lead-to-loss-of-liquidity\/","url_meta":{"origin":2663,"position":4},"title":"Leveraged Loser Loans Lead To Loss of Liquidity","author":"Brian Brady","date":"September 15, 2008","format":false,"excerpt":"I'm kicking this one up to the top, in honor of today's events.\u00a0 It's a historical look about the early MBS markets.\u00a0 Now before you jump me for my incorrect conclusion, I didn't realize that the hedge funds leveraged their loan holdings 10 to 1 (or more).\u00a0 That \"38 bucks\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14866,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14866\/could-mortgage-rates-drop-after-a-treasuries-credit-ratings-downgrade\/","url_meta":{"origin":2663,"position":5},"title":"Could Mortgage Rates DROP after a Treasuries’ credit ratings downgrade?","author":"Brian Brady","date":"July 29, 2011","format":false,"excerpt":"The dictated debt limit deadline looms and a credit rating downgrade, to US Treasury securities and agency mortgage-backed securities, seems likely.\u00a0 Naturally, a spike in treasury yields is expected and a subsequent rise in mortgage rates should follow. \u00a0 That's right out of the senior year textbook, in most American\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2663","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=2663"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/2663\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=2663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=2663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=2663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}