December 15th, 2009 10:24 PM by Eric Fang
A few reasons:1)Bond does not change too much, but MBS bond may changes.Especially at the current market when the Fed is purchasingMBS(till end of March)
2)Even if the MBS does not change, the lender can lower/increasetheir profit magin to lower/increase the interest rates.
3)If the lender's pipeline is almost full, even the MBS doesnot change that much, the lender can still increase the rateto alleviate the pressure of more loans(that means the lenderwill have huge margins if the borrower still wants to have those higer rates)