Mortgages are about 3 ticks wider to Treasury debt today. Participants report a lack of activity except for some originators selling some product. The coupon of choice this morning was 6.5s.One portfolio manager noted that the issue of the new higher loan limit has not been settled yet. Some feel that all loans with the higher limit should be lumped into some new jumbo class. Others feel that since the change is permanent the new loans should not receive any special treatment.
The portfolio manager with whom I spoke believed that if they were not treated as a special class and included with TBA paper it would dilute TBA s and give added value to specified pools.