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Watch Out Folks Mortgage Backed Securities Ready to Crumble

mycmps | 23 April, 2009 14:07

Take a look at the chart above. What does it mean? To the untrained eye, absolutely nothing. Look closer...dig deeper...you will need to read between the lines.

Most finance and mortgage professionals will agree that mortgage rates of recent are at his htoric lows simply due to the amount of government intervention. Timothy Geithner, the Treasury Secretary, even commented during his speech to the oversight committee earlier in the week that the time for buying mortgage-backed securities will come to a halt sooner than due to stabilization in the credit markets.

If that is the case, once the FOMC and the Treasury decide to stop pumping billions of dollars into the economy interest rates will reverse course. Not only will mortgage rates rise, but they will rocket out of control in a blink of an eye.

For those in the know the "perfect storm" is staring us back in the face.

Watch out folks, mortgage-backed securities are ready to crumble and that means these historic low mortgage rates will be just that...history.