Rates

Well it is about to happen, and from what I read, it will.  Greece is about to default on their debt and exit out of the European Union.

And what does this mean, well for 1 I am going to have to find a new acronym, because there will be no more "G" in PIIGS.

Greece will probably default sometime in June, which will through a tizzy into the EU, because this will be the 1st time one of it's members has exited.  And the traders are not going to like this because the EU has sunk Billions of dollars into Greece and they are going to get zip.

So this means that investors are going to flock to US bonds, as they have. 

As you can see by the chart above, we are trading below the critical 1.90% mark, and traders are nervous. 

So what does this mean for rates, well if we can consistently trade into next week, below the 1.90% mark, we have a good opportunity for rates to take the next nose dive and go down to the 3.625 to 3.50% range.

Right now I do have 1 lender quoting FHA rates at 3.50%!  But we will see if this holds.

And if, and a big IF, the EU continues to collapse, do we dare say 3.50% will be the norm?  Who would of thunk!

Lenders are really cautions on purchasing the 3.0 Coupon, which would cause the rates to fall.  But the river is getting really built up behind this dam, and could break any day.  Next 2 weeks will be critical.  It happed before, back in October and then again in February.  But didn't happen.

HARP 3.0

Well these has been quite a bit of chatter out there about a refinance program that will encompass loans not owned by Fannie and Freddie.  We call these Conventional Bond loans.  Been some testifying on Capital hill over the last week.

I am hoping that this is not election year lip service and Congress will act, so stay tuned!