Rates are Dropping

I hope everyone had a great Labor Day weekend and that everyone is safe this morning as thousands of people are without power due to crazy winds in the valley.

Core Logic’s delinquencies report came in. The number of 30 day late as well as 60-90 day late mortgages were slightly down from last month. However, the number of loans that are more than 90 days late increased 1.5% showing increasing foreclosure risk in the future once government programs pull back.

Mortgage bonds are up 16 bps this morning following the tumbling stock market starting on Thursday. We are now sitting on the 25 day moving average. If losses in the stock market continue, it is likely that we will rise above and potentially have a run at the highs we saw in mid-August. It is safest to lock; however, if you are able to closely watch the market, there’s potential upside to floating.