Loan Pricing Gets Whacked as 3.5 MBS Goes Off the Board
ByPosted To: MBS Commentary
Pricing got whacked today! Rebate is 41.6bps worse in the last 48 hours. Week over week isn’t any better. Reductions are robust across the coupon stack. Note rates below 4.25%, those used to fill 3.50 MBS coupon buckets, are the biggest losers. 4.25% is still on the board, but it’ll cost almost 50bps more at closing. Check out how expensive the buydown is from 4.375 to 4.25%. 4.125% is out there as some desks are still looking to fill 3.50 buckets, but those offers are not widespread as 3.5s are no longer liquid. This is not pretty, even for a Friday…. Mortgages had a terrible week in general. Prepayment speeds were faster than forecast, especially in recent vintage production coupons, which sent investors running to shorten the duration of their portfolio. Falling price levels also pushed…(read more)