MBS RECAP: Quiet Bond Market Leaves Focus on Demise of Adverse Market Fee

Posted To: MBS Commentary

Quiet Bond Market Leaves Focus on Demise of Adverse Market Fee Seemingly out of the blue, the much-maligned adverse market fee for conventional refis was removed today. Lenders acted quickly to adjust pricing for new locks with most going so far as to adjust existing locks depending on their nearness to the closing table. This made for good drama and discussion on MBS Live, and it was an ideal day for such things considering a complete absence of volume and volatility in the bond market. 10yr yields ended with 1bp of unchanged and MBS underperformed slightly to end 2-3 ticks weaker (-0.06-0.09). The underperformance could be as simple as investors making token adjustments for the impact on prepayment speeds from the removal of the adverse market fee (it's not a huge consideration, but it…(read more)

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MBS RECAP: Quiet Bond Market Leaves Focus on Demise of Adverse Market Fee
MBS RECAP: Quiet Bond Market Leaves Focus on Demise of Adverse Market Fee

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