25 February 2011 – Finally, after weeks of pent up parody lyrics I am again able to unleash upon you, my loyal readers, a musical interlude and tribute the late, great Groucho Marx.

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Libya (Sung to Lydia, The Tattooed Lady)

Ooooooooooooooooooh

Libya oh Libya, Oh have you seen Libya
Libya a country unraveling
She is 6th in Middle East oil reserves
The unrest in her people shakes world market nerves, so

Libya oh Libya, Oh have you seen Libya
Libya a country in turmoil
If she stops pumping her precious oil
European consumers begin to toil
And equities tank in downward coil
For low mortgage rates thank Libya

I will spare you the rest, but the basic gist is clear. The unrest in the Middle East is driving the train right now for world markets. Libya, in particular, is of concern as they produce a good deal of the oil used in Europe and the clashes have become increasingly violent. This has sent ripples through the entire global marketplace with major spikes in fuel costs, which results in concerns for everything from consumer spending to operating costs for companies. The result is a flight to the quality of good old US Treasuries. With an influx of money, rates drop on T-bills, as well mortgage backed securities. In the end, we see better pricing for consumers on mortgages.

This rang true this week as the upward pressure on mortgages that we have seen as of late evaporated. Mortgage pricing actually improved with best execution, no points loans pricing back near 5%. It is important, however, to realize that this could be a fleeting opportunity and rapid resolution in Libya and other countries could reverse the recent gains.

My mortgage rate lock advice is actually markedly different. I am now recommending that only my clients closing in 7 or less days LOCK. I believe those closing 15 or more days from now have the luxury of FLOATING a bit with a keen eye on any upward movement.