Good Thursday AM,

The Fed finished their 2 day meeting yesterday and left rates unchanged as expected. Chairman Powell was firm on his plan that the Fed would continue to buy bonds (which is what we really need to keep rates low) for the foreseeable future and he would let markets know in advance of any plan to curb bond buying. The metrics he would need to see would be full employment (keeping in mind as he accurately noted that the current 6% reported unemployment rate is artificially lower than the actual since labor force participation has declined) and he would need to see inflation moderate above 2% (not spike as is expected over the next few months to then fall back). Bonds did well after the Chairman spoke. This morning is another case. We are getting hammered and now sit upon a critical support level as well as the 50 day moving average. Some are saying the selloff is sparked by GDP and Jobless claims. This is likely untrue, as both releases missed expectations.  I would think today’s movement is driven more by some strong economic data in Europe pointing toward growth in the European economy. If that is true, with the European markets closing, we could see some improvement. Currently the 10-yr has backed up to 1.66% and mortgage bonds were off 25bps (clawing back a bit now). We are sitting on the 50 day moving average and it is really important we hold. If not, pricing can worsen substantially. Stay alert.

Good news from FHFA (Fannie and Freddie) on a new refinance program to help moderate income borrowers. Details are below…

The program also includes:

• A requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate;
• A maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver (the Enterprises will provide the lender with a credit of $500 upon the loan’s sale to an Enterprise); and
• A waiver of the 50 basis point up-front adverse market refinance fee for borrowers with loan balances at or below $300,000.

The refinancing option will be rolled out this summer to GSE borrowers with incomes at or below 80% of the area median income. Another condition is that applicants must not have a mortgage with a loan-to-value ratio greater than 97%, a debt-to-income ratio above 65%, or a FICO score lower than 620. They are also required not to have missed a payment in the past six months and no more than one missed payment in the past 12 months.

Last, a sobering reality and a good reason to lock/freeze your credit (I need to take my own advice).

Due to continuing security breaches, “you can bet that the personal information of every adult in the U.S. has been exposed. Our data are out there,” said Kathy Stokes, director of fraud prevention at AARP Fraud Watch Network, which offers free help to consumers.

Please remain safe and healthy, make today great.