Mortgage rates¬†improved today, hitting the lowest levels in more than a month. ¬†Bond markets (which underlie mortgage rates) generally improved last week as the new administration's ability to get policy changes through Congress was called into question by the breakdown of the new healthcare bill. ¬†As of last week, there was some hope that debate would resume this week and that the bill wasn't completely dead. ¬†As the weekend passed without meaningful updates, markets increasingly assumed failure.
One of the primary functions of government and mortgage-backed bond markets is to serve as a "risk-free" investment. ¬†It might seem strange to consider mortgage-backed securities (MBS) as "risk-free" with the mortgage meltdown being a fairly recent phenomenon, but indeed, today's MBS are as risk-free as they've ever been. ¬†Even then, they tend to follow movements in US Treasuries which are considered the risk-free benchmark for all other dollar-denominated bonds....(read more)Forward this article via email:¬†¬†Send a copy of this story to someone you know that may want to read it.[img]http://www.mortgagenewsdaily.com/aggbug.aspx?PostID=721832