Market Snapshot March 20, 2020

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Good Friday Morning,

 

Yesterday could have been the toughest day in the bond market that I can remember. There was no oxygen for mortgage bonds and it became clear that regardless of what the rest of the market was doing (equities were positive), markets are concerned about the future of mortgage bonds. Anticipated unemployment, forbearance, and delayed payments all contributing. The Fed will need to come in and be the buyer of mortgage bonds. The Fed is buying, just not enough. If you have a locked loan, do not let it expire or need an extension. You will not get that rate back for the next few weeks. I do think it comes back, it will just take time for the market to become liquid again.  The 10-yr is back to .96%, mortgage bonds -21bps  and stocks are on sale as well, with the Dow down 300.  All seems to be on shaky ground right now.

 

As a note, HUD and FHFA announced that there would be no foreclosures or evictions for 60 days.  Additionally, earlier this month, FHFA announced Fannie Mae and Freddie Mac would provide payment forbearance to borrowers impacted by the Coronavirus, allowing for a mortgage payment to be suspended for up to 12 months due to hardship caused by the Coronavirus.

 

Yesterday, the state of California expanded their shelter in place to include the entire state of California, and this morning the State of New York imposed virtually the same.

 

That’s all for this week. Please, please, please be safe and healthy.  Seems like a good time to re-binge GoT or something. Enjoy the weekend and first, make today great!