Mortgages finally caught a bid last week, finally outperforming agencies after two weeks of steady underperformance following the accord between Rep. Richard Baker (R.-La.) and the GSEs.

Near close last Thursday, the 30-year MBS sector was outperforming by 1.7 ticks. A large west coast fund was reportedly in the market last week selling a good chunk of slight-premium Ginnie Mae bonds, sources said.

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