SPREADS WIDENING ..................................2/5/08

Spreads between MBS yields and 10 year treasury yields have widened rapidly in recent moments.

This usually will not lead to any repricing, but if investors see this as a buying opportunity for MBS's there is a chance we could see a price change this afternoon.  Remember, if investors are buying MBS's, the price goes up, which brings rates down.

Unfortunately, it seems that MBS prices are sliding a bit.  Lender's that priced aggressively may reprice for the worse.  It could go either way.