from Accrued Interest Blog:
In addition to this, we need to keep in mind that starting in 2010, mortgage resets will begin to rise again, and will continue to rise to a peak in 2011.It was shades of 2002, only in reverse today. Mortgage servicers sold intermediate/long rates, which drove rates higher, which brought out more mortgage hedge sellers. Now we are set with some very basic problems.
The Fed can't keep mortgage rates at or below 5% with the Treasury market where it is. Can't happen.
