Although later than it should have been, independent mortgage service providers were finally given financial support today that will help prevent a total collapse of the mortgage industry. The FHFA finally agreed to step in and provide financial support after a loan service provider has made 4 mortgage payments on behalf of mortgage holders who sign up for a payment forbearance. As ridiculous as it is to think that independent mortgage service providers would be forced to make even a single payment for a program that lawmakers offered, at least this will be enough to keep our industry from falling apart.
US stock markets have fallen sharply the past couple of days. The drop in price came after stocks failed to make a decisive break above a critical level that could have signaled a reversal where stocks went from trending lower to trending higher. Since the fundamentals of the US economy don’t even support current levels, I continue to believe we will see stocks fall even further.
Mortgage bonds have been trading in a tight range. However, as the Fed has slowed their purchase of mortgage backed securities, bond prices have been drifting lower. This is adding slow upward pressure to mortgage interest rates. In light of this, we will maintain our locking bias.