Feds look to future of Fannie, Freddie
Posted February 23, 2012
Weekly jobless claims were flat this morning, coming in at 351,000 which mirrored the adjusted figure from last week. The reading is the lowest we’ve seen since March 2008.
Bond reaction to the flat data was limited in early trading, however the 10 Year Yield has now dropped below two percent for the first time in quite a few trading sessions, thereby helping to push mortgage rate directional momentum to the downside. Mortgage Rates continue to trade in a very narrow range, and will likely do so until we experience deviation from consensus estimates as it relates to future economic data releases.
The Federal Housing Finance Agency put out its thoughts this week on a plan to help restructure Fannie Mae and Freddie Mac. Since going into conservatorship in 2008, the GSE’s have been under intense scrutiny by those in Washington. FHFA states that there are three strategic goals for the next phase of conservatorships. The three goals are to build a new infrastructure for the secondary market, lessen the GSE’s presence in the marketplace and maintain foreclosure prevention activities and credit availability for new and refinanced mortgages.
This will be a task of mammoth proportion, simply due to the complex and volume driven involvement that the GSE’s have within today’s mortgage market. I’ll have much more for you on this issue in the coming weeks and months.