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If declines in mortgage rates matched those in the MBS from which they are priced, the 30-year...

If declines in mortgage rates matched those in the MBS from which they are priced, the 30-year fixed would be at 2.6% (instead of 3.3%), says the FRBNY. Capacity constraints among mortgage originators appears to be a key reason, say researchers, as big swaths of the 3rd party origination industry were wiped out in the crisis, and, so far, haven't returned.
Comments (3)
  • Brendan O'Boyle
    , contributor
    Comments (1035) | Send Message
     
    Does anyone know what this means for the future direction of mortgage rates? It would seem to me that the 30 year should get lower gradually if it is capacity that is slowing it down.
    31 Dec 2012, 03:50 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    "LibertyStreetEconomics" - now there's an oxymoron from the source.

     

    3rd party originators aren't returning because the government dominates mortgage financing, aka public mortgage financing.
    31 Dec 2012, 03:57 PM Reply Like
  • SoldHigh
    , contributor
    Comments (1001) | Send Message
     
    "big swaths of the 3rd party origination industry was wiped out in the crisis, and, so far, hasn't returned"

     

    Nor should it given the poor practices it had in which originators had -0- interest in whether or not borrowers repaid. Originators need to have skin in the game, otherwise they have zero incentive to lend to qualified borrowers.
    31 Dec 2012, 04:08 PM Reply Like
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