There’s been a lot of chatter since yesterday afternoon about treasury rates, mortgage rates, the yield curve, and so forth—and for good reason. Here’s a good write-up from Mish’s Global Economic Trend Analysis on what’s going on: Mortgage Market Locks Up
Yesterday 10 year treasury yields went soaring and the mortgage market literally seized up. Mark Hanson at the Field Check Group has this report that I can share.
As Bad As You Can Imagine
With respect to yesterday’s episode in the mortgage market — yes, it is as bad as you can imagine. Yesterday, the mortgage market was so volatile that banks and mortgage bankers across the nation issued multiple midday price changes for the worse, leading many to ultimately shut down the ability to lock loans around 1pm PST. This is not uncommon over the past five months, but not that common either. Lenders that maintained the ability to lock loans had rates UP as much as 75bps in a single day.
A good friend in the center of all of the mortgage capital markets turmoil said to me yesterday “feels like they [the Fed] have lost the battle…pretty obvious from the start but kind of scary to live through it … today felt like LTCM with respect to liquidity”.
For a local insider’s perspective, check Rhonda Porter’s post over at Rain City Guide: Mortgage Rates on the Move Up Today…way up.
And finally, here’s a post that goes into some of the mess going on behind the scenes that has led to this interesting development: It Is Failing: ALL OF IT