I received this information from Norm Hansen of AmWest Mortgage on Monday, March 24th, 2008.  It contains valuable information about the local Tahoe market and the lending industry.  I hope you find it useful!

Good Morning,

The Federal Reserve has been discussing the possibility of buying mortgage backed securities to add liquidity to the markets.  My sources suggest that this will not happen because it will set a dangerous precedent. Instead, the Feds are going to lend money to banks using these mortgage backed securities as collateral, a much more conservative approach.  This added liquidity will surely improve rates.

So far today, Mortgage Bonds are getting battered down lower, as Stocks surge higher.  One reason Stocks are moving higher is the expectation that the buyout price of beleaguered Bear Stearns will likely be raised from $2 per share to $10. This is an overall boost to the financial sector, which has been the hardest hit area in the latest Stock market downturn.

Today brings some encouraging news for the housing market. Existing Home Sales for February came in better than expected. Potential home buyers should take note that this is a strong sign that we may have reached or are very close to the bottom for home prices. This surprisingly decent read on housing is also helping Stocks move higher and pressuring Bonds lower still. 

However, with Mortgage Bonds trading above an important level of support, I recommend cautiously floating.

Please call me with your questions.

Best regards,

Norm