Prices on lower coupon mortgage-backed securities (3.5% and 4.0%) have improved today while prices on higher coupon securities (above 4.0%) have fallen. The cause appears to be an announcement that the Obama administration is considering a broad refinance program for government guaranteed loans to be refinanced without the normal restrictions, like LTV. The details of plans being considered are not available. The goal of the program would be to stimulate the economy, as people would have more discretionary funds. The downside could come from MBS investors whose investments will pay off much faster than anticipated. On future investments, investors would likely pay lower premiums for higher coupons. This news should have little impact on most loans currently in your pipeline.
Read the full article from The New York Times: U.S. May Back Refinance Plan for Mortgages