10 year treasury yield

[patientrenter]

SDR, have rates come down for fixed rate conforming loans only, or for other loans too?

What I’m thinking is that spreads over Treasuries are widening for bonds with credit risk. Bonds issued by the quasi-government agencies (FNMA, Freddie..) are thought to be essentially risk-free, so their rates should have gone down with Treasuries, making it possible to lower rates on the mortgages they buy. Rates on loans that can’t be sold to the agencies would have gone up, I would have guessed, especially for the riskier types of these loans.

I don’t follow home loan types and rates. Are some home loan rates going down, and some up? I am guessing that risk-free interest rates might go down a little (or just stay level for a while) while riskier rates climb, and this should flow through to home loans.

Patient renter in OC

[patientrenter]

SDR, have rates come down for fixed rate conforming loans only, or for other loans too?

What I’m thinking is that spreads over Treasuries are widening for bonds with credit risk. Bonds issued by the quasi-government agencies (FNMA, Freddie..) are thought to be essentially risk-free, so their rates should have gone down with Treasuries, making it possible to lower rates on the mortgages they buy. Rates on loans that can’t be sold to the agencies would have gone up, I would have guessed, especially for the riskier types of these loans.

I don’t follow home loan types and rates. Are some home loan rates going down, and some up? I am guessing that risk-free interest rates might go down a little (or just stay level for a while) while riskier rates climb, and this should flow through to home loans.

Patient renter in OC

[The-Shoveler]

Speaking of mortgages

Countrywide profit falls 33 pct, slashes outlook
Tuesday July 24, 8:27 am ET

NEW YORK (Reuters) – Countrywide Financial Corp (NYSE:CFC – News), the largest U.S. mortgage lender, on Tuesday reported a 33 percent decline in second-quarter profit and slashed its full-year earnings forecast, citing a difficult housing market.

[The-Shoveler]

Speaking of mortgages

Countrywide profit falls 33 pct, slashes outlook
Tuesday July 24, 8:27 am ET

NEW YORK (Reuters) – Countrywide Financial Corp (NYSE:CFC – News), the largest U.S. mortgage lender, on Tuesday reported a 33 percent decline in second-quarter profit and slashed its full-year earnings forecast, citing a difficult housing market.

[Chris Scoreboard Johnston]

Adam,

Sorry I could not comment on this yesterday, for some reason I was blocked from this thread. As I think predicted in the thread at the beginning of the year about going on the record with predictions, I think Bond prices will rally in the 2nd half of the year ( rates will drop ). Even if I did not do it there, I wrote about it in my newsletter ( no I am not hawking the newsletter, just stating that I am officially on the record on this subject in it ), and also told Adam during my home purchase process, that I thought rates would rise into June, then decline. This is one of the most consistent seasonal patterns in the markets, rate rise through June, then decline through the end of the year. It is tracking almost to the week so far this year, so I expect it to continue.

Patient Renter, to answer your question, I mostly trade the futures markets, Bonds and S&P. I do trade stocks as well, but normally hold them for 6 months or so, whereas the futures I trade much more actively. I have commented alot on stocks this year, due to the strong trend in the markets that I saw people fighting, and it was my attempt to try and dissuade people from doing that. I have officially dropped that campaign, as it is hopeless. I have learned that lesson the hard way in my career, and I thought I might be able to spare some people the heartache, but it did not work.

[Chris Scoreboard Johnston]

Adam,

Sorry I could not comment on this yesterday, for some reason I was blocked from this thread. As I think predicted in the thread at the beginning of the year about going on the record with predictions, I think Bond prices will rally in the 2nd half of the year ( rates will drop ). Even if I did not do it there, I wrote about it in my newsletter ( no I am not hawking the newsletter, just stating that I am officially on the record on this subject in it ), and also told Adam during my home purchase process, that I thought rates would rise into June, then decline. This is one of the most consistent seasonal patterns in the markets, rate rise through June, then decline through the end of the year. It is tracking almost to the week so far this year, so I expect it to continue.

Patient Renter, to answer your question, I mostly trade the futures markets, Bonds and S&P. I do trade stocks as well, but normally hold them for 6 months or so, whereas the futures I trade much more actively. I have commented alot on stocks this year, due to the strong trend in the markets that I saw people fighting, and it was my attempt to try and dissuade people from doing that. I have officially dropped that campaign, as it is hopeless. I have learned that lesson the hard way in my career, and I thought I might be able to spare some people the heartache, but it did not work.

[POZ]

I thought I heard BIG Ben say that Inflation was his primary concern, and isnt there a direct correlation between the devaluation of the dollar and inflation?

[POZ]

I thought I heard BIG Ben say that Inflation was his primary concern, and isnt there a direct correlation between the devaluation of the dollar and inflation?

[The-Shoveler]

“Isnt there a direct correlation between the devaluation of the dollar and inflation?”

Only in the stuff you need to live, ie.. (Food, Gas, Health care, cost of buying a house etc…) But it’s not core !!! as Ben would say..

[The-Shoveler]

“Isnt there a direct correlation between the devaluation of the dollar and inflation?”

Only in the stuff you need to live, ie.. (Food, Gas, Health care, cost of buying a house etc…) But it’s not core !!! as Ben would say..

[SD Realtor]

Thanks for posting Chris!

pr – Yes the rates have come down for conforming loans. In general all mortgage rates will follow the long bond yields, however all programs will build a premium in as an offset to risk. Loans that cannot be sold will eventually go away and not be offered. If a lender cannot make money on a loan then that lender goes out of business unless servicing a loan is part of their business model.

SD Realtor

[SD Realtor]

Thanks for posting Chris!

pr – Yes the rates have come down for conforming loans. In general all mortgage rates will follow the long bond yields, however all programs will build a premium in as an offset to risk. Loans that cannot be sold will eventually go away and not be offered. If a lender cannot make money on a loan then that lender goes out of business unless servicing a loan is part of their business model.

SD Realtor

[The-Shoveler]

Chris,

“strong trend in the markets”

What trend(s) do you see in the second half ???

I think the LBO stuff is almost dead as well now.

[The-Shoveler]

Chris,

“strong trend in the markets”

What trend(s) do you see in the second half ???

I think the LBO stuff is almost dead as well now.

[capeman]

I would have to disagree with that. The Fed is heavily obligated to control not the price but the stability of the dollar. Right now the DX is at 80.08 and falling. There is a serious breaking point at 80.00 and the dollar would likely spiral out of control if it breaks 80 causing a whole host of problems including hyperinflation, real interest rate increase on a large scale and a depression the likes of which has never been seen. Controlling stability of the currency is likely the Fed’s top priority unless they want to see equity’s tank and revolution to occur.

[Author]

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