As a mortgage rate shopper in Cincinnati, geopolitics can either be your dream or your nightmare.

Lately, it's been the former.

Mortgage Rates React To Politics

The mortgage market is a living, breathing organism, susceptible to outside influence.

Some influences are easy for which to prepare.  We call them "calendared" events.  Things like the release of Existing Home Sales data, jobs numbers or an FOMC meeting -- these are events we know are coming and for which we can devise a rate lock strategy.

It's the non-calendared events, however, that can throw the markets for a loop.  You can't make a plan for something if you don't know it's coming.  You can only hope the market moves in your favor.

Right now, we're in the midst of a 7-week, non-calendared event.

• Late-March : Greece debt problems start to surface
• Early-April : Eyjafjallajokull erupts in Iceland
• Mid-April : Greece debt problems worsen
• Late-April : Civil unrest in Greece and PIIGS contagion fears
• Early-May : Greece contagion spreads to Eurozone

And then today, North Korea is threatening military action against South Korea.

Markets can't prepare for non-calendared events like they can a jobs report.  For example, if the jobs report is stronger-than-expected, we know that mortgage rates will rise. If the jobs report is worse-than-expected, we know that mortgage rates will fall.

With geopolitical happenings, on the other hand, we often have no basis.  Markets react on emotion rather than fact and it makes for a wild, rickety roller-coaster ride. Mortgage rates end up changing multiple times per day, and make big movements at a time.

North Korea + Eurozone = The Lowest Mortgage Rates Ever

Thankfully for rate shoppers, geopolitics have been pushing mortgage rates down. Way down.

As of the time of posting, 30-year fixed conforming mortgage rates have moved lower on the day and now successfully pushed through to their lowest levels of all-time.

Let's say it again : Of all time.

Now, this isn't true for all loans, of course. We're only talking about conforming mortgages.  Mortgage rates on many jumbo and super-jumbo loans are actually getting worse.  The same is true for certain portfolio products.  This is because mortgage rates on these products is not based on the mortgage-backed securities market -- they're based on bank-risk and bank-risk is growing.

Seriously -- Make Time To Get Yourself A Rate Quote

The problem with markets run by fear is that fear can quickly turn to greed.  And when it does, low mortgage rates start to go away.  Get in touch with your loan officer right away and find out if refinancing is an option.

If you can save some cash each month plus find a reasonable break-even point on your loan's costs-vs-savings, get it done. The math is favorable right now and you've got North Korea to thank for it.

A few pointers for getting low rates:

1. Try not to take too long in the "shopping" process. Rates can rise by 1/4 percent at a time while you're jockeying to save an eighth.  You'll lose in the end.
2. Try to call a loan officer directly and not the call center number on your statement.
3. Watch my Twitter feed for near-real time market updates. You'll want to know what the market is doing.

And, if you don't have a loan officer to call, you can always call or . I am an active loan officer, I answer all my own emails, and my rates are as low as anyone's. Make sure you mention you read my blog, too.

Looking for a mortgage rate prediction? I am a weekly participant in the Bankrate.com Mortgage Rate Trend Index and this week's survey may have the answers you need.

Fannie Mae And Freddie Mac Mortgage Rates Only

By way of disclosure, the Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages nor is the survey specific to Ohio or Illinois mortgage rates. Furthermore, unique property types including non-warrantable condos and condotels may be excluded.

for a real-time rate quote.

Breaking Down The Predictions

Here's the group's mortgage rates predictions:

• 35% predict mortgage rates will increase
• 18% predict mortgage rates will decrease
• 47% predict mortgage rates will remain unchanged

I expect mortgage rates to remain unchanged.

My advice not be appropriate for your individual situation and I'm not always right. Ultimately, you may find your time better spent watching Tayne do a Hat Wobble and a Flarhgunnstow.

Either way, here's what I told Bankrate.com:

"Apparently, the Greek debt crisis ain't over till it's over. And rates stay steady till it is."

It's like White Men Can't Jump.  Every time you think the story's over, it's not. And it goes on and on and on.

Safe Haven Buying Continues Because Of Greece

Safe haven buying is a market trading pattern. It describes a risk-averting trading pattern that often emerges during periods of economic uncertainty. Investors move money away from riskier investments and into safer ones.

One way to do that is by selling high-risk assets and investing the proceeds in ultra-safe securities.

Right now, with the future of Euro sovereign debt in doubt, a lot of high-risk/high-reward assets and getting sold off.  And domestic mortgage bonds are reaping the rewards.

Why mortgage bonds?  Because MBS is backed by the U.S. government and our government's pledge to service debt is stronger than oak.  That makes them safe and causes demand to rise.

More bond demand means higher bond prices which leads to lower rates.

Bond rates move opposite bond prices.

Too Much Fear Will Cause Rates To Backfire

Fear and doubt work in favor of mortgage rates.  Too much fear and doubt, however, work against them. It's why mortgage rates won't fall further in this next week.

Mortgage bonds are quality assets, but on the debt totem pole, they sit second to treasury debt.

In other words, when things get really bad, U.S. treasuries tend to rally more than mortgage bonds. Both improve, but treasuries improve by more.  And that's what's starting to happen.  The spreads between treasuries and MBS are growing and it shows us that investor fear is growing.

Mortgage rates may have fallen as far as they're going to fall.

It's A Safe Time To Lock A Mortgage Rate

There's very little reason for mortgage rates to drop right now. Markets have already squeezed the gains out the Greece debt scenario. It's time to move into locking position.

MRV -- Mortgage Rate Velocity -- is as high as its been in a year and rate changes have come quickly. If you haven't given a loan application to your loan officer, think about doing it today. The longer you wait, the more this next loan may cost you.

Applications-by-phone are a 4-minute process. To give one, call my office at 513-443-2020 or . And be sure to give applications to other loan officers, too. Don't worry -- your credit score won't be damaged if you do it the right way.

Home buyers in Cincinnati are getting a terrific break this week.  Mortgage rates are falling because of events occurring 5,444 miles away.

Growing concerns that the Greek government will default on debt are pushing the nation's risk premiums beyond junk levels.

At one point yesterday, the 2-year Greece note yielded a whopping 25 percent.

Safe Haven Buying Draws Rates Lower

When investors require a 25% return on investment, you can be sure they're sensing a potential default.

And now, that default concern is now spilling beyond the Greek border to the rest of the PIIGS -- Portugal, Ireland, Italy and Spain. Contagion mentality has set in.

Markets have moved into Safe Haven mode.

"Safe Haven buying" is market jargon. It describes a risk-averting trading pattern that tends to emerge during periods of economic uncertainty. It's characterized by large groups of investors moving money away from riskier investments and into safer ones.

When in doubt, get out.

Mortgage Bonds Get An Unexpected Boost

Safe haven buying is a logical approach to investing, really. Rather than doubling down on a risky bet, cash out to protect against further loss.  They take those proceeds and stash the cash somewhere safe until certainty returns.

This is why safe haven is sometimes referred to as a "Flight to Quality". Money flows from risk to risk-less.

Either way, mortgage rate shoppers have cause to yell Opa!  Mortgage bonds unwound 3 weeks of losses in 20 minutes Tuesday for no other reason than because of Greece and fear of a debt default.

30-year fixed mortgage rates fell to 5 percent for the first time since March.

See, when the Federal Reserve left the mortgage-backed market March 31, 2010, mortgage rates were supposed to rise back to 6 percent.  The thing is, Greece has kept that from happening. Bonds demand is high right now.  Prices are up and yields are down.

Mortgage rates move opposite prices for mortgage bonds.

Take Advantage Of Low Rates. They Won't Last.

Rates are low now.  It won't last.  It can't last.

One major reason why low rates won't last is that fear contagion is often overblown and it doesn't last forever.  Already today, in fact, we're seeing pullback from the initial market reaction to the PIIGS.Secondly, the U.S. economy continues to expand, a development that spurs risk-taking at the expense of the bond market.

Both of these development should push mortgage rates higher. Sooner rather than later.

The time to lock your rate is now. to get your rate lock underway.

Mortgage Rate Lessons We Can Learn From Greece

If nothing else, the Greek government debt situation vis-a-vis the mortgage market highlights a key theme on The Mortgage Reports. The events we can prepare for, those aren't the ones that drive mortgage rates the most.

It's the events we never predicted at all.

In Cincinnati, in Columbus, and in every town in this country, mortgage rate shoppers are getting a gift.  Rates should be high, but they're not.  Because of Greece and the PIIGS.  Tomorrow, though, the situation could change.  All it would take is international aid to Greece.  And that's in negotiations as we speak.

Once there's less fear of default, there's less need for safe haven buying.  Mortgage rates will rise. to execute your rate lock before that happens.

Mortgage Market Update For April 21 2010

With 9 days left to claim the federal home buyer tax credit, I thought this would be a good time to review the mortgage market, jumbo loans, and the state of home appraisals.

This 2-minute video covers a lot of ground:

• How volcanoes and threats of a Greece debt default are helping mortgage rates
• Peak levels for Mortgage Rate Velocity (MRV)
• How jumbo mortgage rates are "made" and why jumbos are so cheap right now
• The return of the home appraisal

If you've got mortgage-related questions I didn't answer above, email them to me directly at . I'm happy to talk mortgage with you anytime.