What's Up Is Down...

Good Morning!

Here's another example of how the mortgage world is kind of upside down right now.

On many programs 30 year loans are priced lower than 15 year loans.  (Typically 15yr loans are lower)

I think there's two main reasons for this:

1)  There are much more 30 years loans in the market right now, and they are much easier to sell to the Fed.  More demand equals lower rates.

2)  The other is the Covid virus.  15yr payments are higher, thus potentially at more risk of financial stress than 30yr payments.  This in turn hurts the servicing valuation of the loan, which plays a role in the loan rates.

Hopefully this liquidity for the 15 year mortgages will improve in the coming weeks, and things will get back to where they should be.

That's it for today!

Thanks for reading!

Brett

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