Originators should prepare for quick reversal on rate trends

by MPA24 Jul 2013

A bond analyst has warned originators to prepare themselves for a reversal in rate trends, even after two weeks of easing mortgage rates.

With mortgage backed security sales rallying over the past two weeks, mortgage rates have been easing off year-long highs. But MBS Authority senior bond analyst Bryan McNee has told MPA's Weekly MBS Wrap that the trend may not continue for long.

"The bottom line this week is that we're trading above the 25-day moving average. We haven't done that since April, and MBS might be a little bit over-bought," he said.

McNee said though pricing on MBS remained good, he was concerned that "this might be an apex". We urged originators to remain prepared.

"You need to be watching the live line charts, keep watching the live data and get ready for a quick reversal," McNee said.

To see McNee's full analysis on this week's Weekly MBS Wrap, CLICK HERE.


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