5 Negotiating Tactics That Kill Real Estate Transaction

Cut by the Fed does not directly translate to lower mortgage rates

  • Current Market and why Mortgage rates aren’t as low as people think is as result of what I listed below. 1. Dislocation – 10 yr. down (all time low) + MBS up = follow MBS (Mortgage Backed Securities are what we use for pricing rates) 2. Servicing Values – how many years is the borrower going to pay? Unknown right now. This affects the value of the loan and what investors are willing to pay for the loan. a. Diminished servicing values + MBS = pricing not as good. b. Hedge Cost – more expensive than ever before. c. High Hedge cost + Low Servicing Values + MBS = worse pricing