21 January 2011 – So this week, I had a bit of writer’s block. I sat and thought about how I can best describe the current level of lunacy and frustration in the mortgage market. Then, like a beam from Heaven it came to me in the memories of my favorite Warner Brother’s cartoons and something affecting many ratewatchers that I am calling Wile E. Coyote Syndrome.

This malady suffered a good number of my own clients is characterized by transformation into a ravenous canine futily seeking to catch the uncatchable. They have their Acme rate trap configured and the stage is set. For a fleeting instant it looks like they might get their prey, but then in a cloud of dust and a taunting “meep, meep,” the rate that they are chasing disappears and they smash into a wall.

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Monday of this week was quiet after some aggressive Friday pricing presented a great opportunity to secure the best rates for several weeks. This was not to last, however, as positive existing home sales and a favorable four week moving average for employment numbers spelled higher borrowing costs. In a veritable instant we were back up at the recent higher mortgage rate levels and many a Wile E. Coyote stricken borrower returned to the drawing board to catch the Rate Road Runner the next time he passes by.

My mortgage rate lock advice for my clients is unchanged and still based heavily in defensive thinking. IF closing in 7 days or less LOCK. If closing in 7 to 30 days, I would suggest FLOATING with extreme caution. With this much volatility, I would LOCK on any improvements as well as any major upward repricing. You do not want to miss the boat.