While the recent surge in the bond market, outside of Treasuries, has pushed mortgage bonds to seven-month highs, these securities still represent good value.

That’s the view of Scott Simon, head of mortgage- and other asset-backed securities at Pimco.

“The sector had just gotten stupidly cheap,” he tells Bloomberg.

“And on any kind of loss-adjusted basis, stuff is still really cheap. If you didn’t know about the last few months, you’d never know how it’s gotten here. You can run some pretty draconian scenarios and get awfully high yields still.”

The recommendation applies to securities without government backing, which excludes Fannie Mae, Freddie Mac, and Ginnie Mae securities.

Prices for the most senior prime jumbo securities jumped 32 percent in the last two months, to about 83 cents on the dollar, according to Barclays Capital.

The non-agency mortgage securities plummeted amid the housing crunch and bank meltdown. But prices started rebounding big-time after the Treasury and Federal Reserve announced plans March 23 to lend to buyers of the securities and invest with them.

Simon says the securities also have benefited from rising prices for virtually all bonds outside of Treasuries, the easing of banks’ mark-to-market rules and a willingness among investors to embrace risk again.

Experts see opportunities across the bond market spectrum.

“Bonds are becoming the next great investment with equities so beaten up,” Tony Decello, director of financial advising for Deloitte Tax, tells Moneynews.