Is there life on this planet after all? - 1.65 above LIBOR

A Bloomberg article points out that IndyMac, the second- largest independent U.S. mortgage lender, sold its first non- agency mortgage securities in two months on April 1st. About $235 million AAA rated bonds were sold at a coupon of 1.65 percent above LIBOR. Last April the same class of securities that involved ARMs had a coupon 0.33 percent above LIBOR, in December the same coupon carried 0.7 percent. But in early March this year buyers of similar AAA rated home loan securities were paid an extra yield of 4.5 percent. This spread seemingly is coming in, which could be a good sign for the housing market. IndyMac also said it took a pretax loss of about $2 million on the transaction. It was not clear whether the $2 million loss stemmed from the AAA rated bonds getting sold below their face value.

The weekly MBA mortgage applications index perked up 5.4% last week, with refis up 3.4% and purchasing applications higher by 8.1%. The fixed 30-yr mortgage rate edged up to 5.78% (+3 basis point) while the 15-yr rose to 5.39% (+11 bps) & 1-yr adjustable rate mortgage were up at 7.06% (+6 bps).