Industry News
Mortgage Industry News
Rally of Mortgages Raises Gross Profit Margin
04/28/2010
Yesterday, Greek debt was downgraded to junk by S&P; they project that investors would only recover 30-50% of their investment should the nation fail to make debt payments; yields on Greek 2yr notes are over 25% from 4.6% a month ago. With the rally in mortgages yesterday, the Compass 30-year Average Gross Profit Margin showed an 8bp jump. The Treasury will auction $42B in 5yr notes today and $32B in 7yr notes tomorrow. Right now, the futures market is pricing in a 90% chance that the Fed keeps rates at .25% through August 10th, 2010. Currently, the Ten Year yield is at 3.74% (3.77% yesterday) and the 2-10 yield spread is at 271bps, flattening 3bps since yesterday morning.
