How come mortgage interest rates are not dropping in par with the 10 year bond?

10 year treasuries have dropped over 130 basis points yet interest rates on mortgages have only dropped about a third of that?

How come mortgage interest rates are not dropping in par with the 10 year bond?

Its called supply and demand. If you are a loan purchaser in todays market.. You call the shots. Fannie/ Freddy have cap limits and cannot exceed them. You go to the secondary market (most are gone) and if you find ANYONE you pay what they ask. Im surprised that rates havent gone up. And if you want to see TRUE madness look at Countrywides 90% jumbos. You want YSP? Rates REALLY close to 10%. Can you say bend over and grab your ankles/

How come mortgage interest rates are not dropping in par with the 10 year bond?

It%26#039;s because of the sub-prime lending %26quot;scandal.%26quot; Banks and underwriters need to shore up some of their poor loans and do not want to be seen as lowering rates in order to attract customers that should not be getting loans in the first place.

How come mortgage interest rates are not dropping in par with the 10 year bond?

Because the mortgage industry is in trouble. They passed out mortgages like Halloween candy and now the foreclosure rate is through the roof. They have to make money and they aren%26#039;t gonna cut those rates for a good while. It has to have time to correct.

How come mortgage interest rates are not dropping in par with the 10 year bond?

They are dropping, but they trail the bond rates due to the spread banks and other financial institutions need to stay in business (profitability).