3/18/09 Feds announced a significant increase in the amount of Mortgage Backed Securities that they intend to buy. In addition to the earlier pledge to buy $500 billion between now and June, they indicated that they are intending to purchase an additional $750 billion in MBS. Moreover, the Feds also indicated their plan to buy $300 Billion in Long Term Government Treasuries (something that they have been hinting at for 2 months)
On the news, MBS prices improved 125 basis points. Given this improved pricing, watch for improved rates this afternoon and tomorrow. In my opinion, once this action has been fully priced in during the next couple of days, you or your clients will want to seek your rate and have me lock it in. I believe this is the final push that we have been hoping for.
Of EQUAL importance is this caution...
This will totally overwhelm all areas of the mortgage industry. Please take this into consideration when establishing closing dates and financing commitment dates.