Pimco’s Home-Loan Wager Seen as Prescient on QE3 Odds: Mortgages – Bloomberg 06-07-12

Salient to Investors:

Investors expecting QE3 are buying mortgage securities to later sell to the Fed for a profit.

Pimco Total Return Fund increased mortgage holdings to 53 percent in April, the highest in three years.

JPMorgan survey a month ago showed money managers were overweight home-loan securities.

Predictions:

Columbia Management Investment Advisers LLC said QE3 wouldn’t help much as low interest rates haven’t produced significant growth.

Amherst Securities Group LP  says QE3 won’t help consumers much because lenders have little capacity to process additional home loan refinancing – will only benefit large financial institutions as originators leave mortgage rates higher than bond yields suggest.

Deutsche Bank said recovery of housing is no longer about affordability, but about credit being made available to more consumers.

Read the full article at http://www.bloomberg.com/news/2012-06-07/pimco-s-home-loan-wager-seen-as-prescient-on-qe3-odds-mortgages.html

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