MORTGAGE RATE COMMENTARY

Milwaukee Mortgage Rate Environment Changing

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Mortgage Backed Securities are PLUS 3bps this morning.

FRANKFURT (MarketWatch) — Greece’s European Union partners applied increased pressure on private bondholders to accept a lower interest rate on restructured debt amid worries a proposed deal won’t put the country on a sustainable fiscal path.

Greek Finance Minister Evangelos Venizelos told reporters in Brussels Tuesday that finance ministers from the 17 nations that share the euro gave Greece the “green light” to wrap up debt talks in coming days. But the talks appear to be moving slowly.

The talks are on going and giving hope to the world markets. That can be measured in the Volatility Index http://www.marketwatch.com/investing/index/VIX. The index which peaked at 48 during the most precarious times of the Euro debt crisis have fallen to under 20. It is a widely held believe that the best time to invest long term is when the VIX falls below 20. That could be why we have seen a decrease in secondary market credits used to pay down closing costs and decrease mortgage interest rates.

We also have seen more positive numbers in manufacturing. The Richmond Manufacturing Number increased from plus 3 in December to plus 12 in January. This is evidence that the economy is turning around.

Trying to turn around the economy and the unemployment numbers is like trying to turn Titanic. We are showing signs that the maneuvers that have been taken are righting the ship. This will start taking mortgage interest rates higher.