Waiting For a Mortgage Market Bailout

Stocks rally this morning, fueled by continued optimism for a quick economic recovery.  Although there remains little to justify this rally, it seems like the Fed’s commitment to the US economy is enough of a reason for investors to pour into the market.  They may be right or this will be proven to be a “fools rally.”  We will have to wait and see.

In a speech made yesterday along side President Trump, US Treasury Secretary Steve Mnuchin stated that he will not allow the mortgage industry to fail.  This gave many independent mortgage lenders and service providers the assurance they need that a bailout is coming.  Once the mortgage industry receives a bail out, we should see the excessive tightening that has hit the industry the past few weeks soften.  This will allow many who have been forced out of the housing market to once again be able to get a loan approved.

With upward pressure on mortgage interest rates, we will maintain a locking bias.