Nothing makes me scream louder than Mortgage Professionals telling people that mortgage rates are tied or linked to the 10 Year Treasury Bill. Plus hundreds of "Talking Heads" in the media believe and say this as well.
NO THEY ARE NOT!!!!!!!!!!!!!!!
The last 2 days of trading make my point as the 10 Year Treasury Bill is up over 400 basis points in price as the yield has plummeted over 1/2% to 3.01%. On Thursday, the 30 Year Treasury Bond's yield or rate dropped .64%.
But, in the last 2 days the 6.00% Fannie Mae 30 year bond has gained a grand total of 11 basis points in price!!! And mortgage rates have remain unchanged. You see mortgage rates are directly correlated with the sale of mortgage bonds and nothing else.
If your Mortgage Professional ever says that mortgage rates are tied or linked to the 10 Year Treasury Bill, please please tell them that they are wrong. Then, hire a Mortgage Professional who knows the TRUTH and can advise you the best.
Posted on November 21, 2008
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