Loan Biz Blog

Sorry for my tardiness today but wanted to confirm that this was the light at the end of the tunnel instead of another train about to run us over (2:00 pm CST 10 year note futures close). Two fundamental factors, Pending Home Sales falling 16% and the Fed being open to extending the MBS purchase program to help underpin the housing industry gave us the boost (see details below). The chart work I was waiting to see was if we could close above the 8 day moving average, something we haven’t done for over 2 weeks. Given that fact that we closed above the 8 day, many bearish signals (ADX, Trend Intensity, etc.) have been neutralized, crippling the bears and reducing the probability of continued bearish trending. In other words, the light we were seeing “is” the end of the tunnel which should produce better mortgage pricing into Friday’s Employment release (7:30 am cst). Given the severity of the selling over the past 3 weeks, we could easily see another 1 point gain in the 10 year and another ½ point improvement in MBS. This will need to occur within a short time frame (2 days) as all bets are off come Friday. Use the improvement to square up your pipelines before Friday’s Employment data.

With Permission & Courtesy of Scott S. Eggen
Senior Vice President – Capital Markets

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Sam Cowen, NMLS ID#: 176693
Branch Manager, Lending in 47 States
PrimeLending | a PlainsCapital Company
2007 N Collins Blvd Ste 403 Richardson, TX 75080
Email: 888@MrLoanBiz.Com Web: www.MrLoanBiz.Com
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