Mortgage Update March 6th 2008

Rates have taken a sharp increase during the past week. Most everything is up 1/2%.

For the past week the banks have had a huge liquidity problem and are selling off their Mortgage Bonds in order to bring in badly needed cash. In doing so the supply of Mortgage Bonds has greatly increased vs the demand for them. When supply of anything is much greater than the demand buyers expect, and will get, a great deal. Thus, the Mortgage Bond buyers are getting higher yields and our rates are therefore higher too. We had a great run while the rates were low and we all hope this Mortgage Bond oversupply situation doesn't last too long!!

Another thing that you should all know about is the situation with "stated" loans. Basically, the "stated" loan is starting to go away. I still have some Lenders that will do a stated loan but don't expect that to last too long. Tell your buyers to get their paperwork in order and be ready for "full doc" loans in the near future!!