**Market** (Rumors, Rumors, Rumors)
Rumors have been opening up more holes in the MBS market lately than the New Orleans Saint’s zone defense. Despite higher dollar prices and lower rates, buzz about a possible meeting between FHFA and big servicers caused investors to dump any mortgage bond trading above this guy’s IQ:
Rumor was that the two parties were close to a deal on HARP 2.0, which would remove some refinance barriers in the original version of HARP, immediately sending Refi ’11 into overdrive and causing prepayment speeds to spike. A statement from FHFA was sent out, stating that no such agreement had been made about enhancing HARP, but indicated that they are working on potential changes with large originators and servicers (i.e. Chase, Wells, BOA).
Other spreading rumors include a possible Greek debt default, which is leading to the de-risking in the equity markets. All in all, a lot of rumors (or facts) to keep an eye on that could have an impact on rates over the next several days.