Market confidence, as evidenced specifically by bid-ask whole loan spreads in the secondary market, continues to improve. In addition, the TED spread (the difference between 3-month Treasury and 3-month LIBOR indices) has consistently been in the 20-30bp range since August, down from over 125bp at the beginning of 2009 and its high of over 500bp in August of 2007. As we have noted previously, the TED spread, an indicator of perceived credit risk in the general economy, has also proved, in our experience, to be the single best determinant of portfolio transaction levels in the secondary market … i.e. the lower the spread the more active the trading.

Also, check out our new website at “www.qallc.info” or “www.quadrantadvisors.com.”
You’ll find background information about Quadrant Advisors and its services, personal profiles of its Principals, advice on how to assure efficient sales in the secondary market, links to significant articles about the market, and answers to some interesting topical questions (for example, what’s the derivation of the word “mortgage” and what is a mortgage button?).

Tom Charles
Quadrant Advisors, LLC
January 28, 2010