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Posted To: MBS CommentaryYesterday was ‘ neat ‘ for a while–at least in the morning hours when massive stock losses helped bonds achieve their best levels in weeks. Then stocks bounced in the afternoon and most of the bond market gains were erased. Today was a carbon copy in many regards although the stock selling was more abrupt. It also never enjoyed the same sort of bounce seen yesterday. The bond market seemed more eager to capitalize. Bonds were already rallying ahead of the 9:30am NYSE open, even as stocks were holding mostly steady. After 9:30am, it was ‘game-on’ for stock sellers and bond buyers. The ensuing 90 minutes saw big moves on both sides of the market. Unlike yesterday, however, the afternoon proved to be a continuation of the morning trend. with stocks and bond yields plumbing new…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Mortgage Rate WatchMortgage rates were roughly unchanged today. That’s an appalling reality considering the movement in underlying bond markets. Bonds–specifically, mortgage-backed securities (MBS)–are the primary input used by mortgage lenders in determining rates. As bonds improve, mortgage rates tend to improve as well. There can certainly be some input lag (i.e. bonds can move first and lenders need time to catch up or let volatility play out), but it’s rare to see substantial improvement in bonds and limited improvement in mortgage rates. Yet that’s just what we’re seeing today. What gives?! The first part of the issue is the relationship between MBS and broader bond markets. It’s common to see mortgages discussed in the context of 10yr Treasury yields because MBS and 10yr Treasuries behave similarly over…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireNew home sales managed to pull out a gain last time they were reported. The question was, with an improving inventory but rising interest rates, could they do it again? Analysts were pessimistic, but not quite pessimistic enough. Sales of newly constructed homes fell in September by 5.5 percent to a seasonally adjusted annual rate of 553,000. Even worse news , the August increase evaporated. Those sales were revised down from 629,000 to 585,000. With those losses, sales fell behind September 2017 by 13.2 percent and May remains the last month when sales increased. Analysts polled by Econoday had expected the Census Bureau to report around 625,000 annual sales with a range of 610,000 to 640,000. Econoday also noted that they have seen signs of price discounting on the part of builders. There…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireMortgage delinquencies surged by 13.2 percent in September, the largest single-month increase since November 2008. But despite the ominous connotations of that comparison, Black Knight attributed the September rise to the calendar and Mother Nature rather than the economy. The company says that delinquencies tend to rise in September and have done so in 16 of the past 19 years , usually by an average of 5.2 percent. This probably is because 30 days hath the month, allowing less time for mortgage payments to be received and processed. This year the month also ended on a Sunday, which also almost always occasions a delinquency jump, one that is usually reversed, at least partially, the following month. More serious and longer lived will be the expected impact from Hurricane Florence. There was…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireLike most measures of monthly home price appreciation, the Federal Housing Finance Agency’s House Price Index (HPI) has slowed in recent months but not quite as much as others. That index, which is based on the sales prices of homes financed with mortgages from either Freddie Mac or Fannie Mae, rose 0.3 percent in August on a seasonally adjusted basis. The July increase, reported at 0.2 percent, was revised upward to 0.4 percent. On a year-over-year basis the increase nationwide was 6.1 percent, again showing significant slowing since the first of the year but remaining stronger than most other indices. In January and February 2018 the annual increases were running over 7 percent, decelerating to 6.5 percent by June. Among the nine census divisions the only decline in the seasonally adjusted…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Pipeline PressLenders, investors, and servicers don’t like bankruptcy, and for good reason. Thank you to Brian B. up in New Jersey who sent along this note about how courts are beginning to try to stem the tide of serial debtors who file multiple petitions for bankruptcy protection. “Recently, the U.S. Court of Appeals for the Seventh Circuit issued an opinion that serves as both a warning to serial filers and a potential remedy for lenders.” M&A & investor shifts There are plenty of deals going on out there, large and small. Some public, some private, some merely hinted at. (For example, why would Maryland’s Corridor be taking applications under the SWBC name, but without a formal announcement?). One seasoned vet likened the lender M&A environment to, “Owning a mortgage company,…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MBS CommentaryFor nearly a week, 10yr Treasury yields had been treating 3.18% as a floor (3.178% was the lowest close over the past 4 days. That arguably changed yesterday , with the entire session trading under 3.18% despite a late day sell-off that almost spoiled the party. With overnight strength, bonds are now in a position to confirm the technical breakout. That would be a small victory. 3.18% is a short-term, intermediate pivot point at best. What we’d really like to see is a confirmed break below the most serious floor of the past 3 weeks at 3.13%. Realistically, that would require a move below 3.11% (which would break yesterday’s intraday lows–also the intraday highs from September 25th). The following chart splits the difference at 3.12%, but let’s not split hairs. The point is there’s…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MND NewsWireMortgage applications rose during the week ended October 19, an increase the Mortgage Bankers Association (MBA) attributed to a rebound from the Columbus Day holiday the previous week. Results for the week ended October 12 had not included any adjustment to account for the holiday. The MBA’s Market Composite Index, a measure of application volume, was up 4.9 percent on a seasonally adjusted annual basis compared to the previous week. The unadjusted version moved 5 percent higher. The recovery in refinance applications was especially strong . That index gained 10 percent compared to the week ended October 12 and refinancing applications accounted for 39.8 percent of total applications, up from 38.1 percent. The seasonally adjusted Purchase Index moved higher again after retrenching for two straight…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: MBS CommentaryWhat a frustrating day! Yes, it’s true that bonds ended up in positive territory at the close, but it would have almost been better to endure a modestly weaker day without the volatility. As it stands, we were built up largely to be let down . Stocks began selling fairly aggressively overnight. 10yr Treasury yields were 5bps lower before domestic trading ever began and continued into even stronger territory by 10am ( 3.11% at the best levels ). All of that coincided with additional weakness in equities. Up until that point, MBS were stronger as well, but not nearly as noticeably as Treasuries. To make matters worse, the average lender didn’t pass along much of the improvement on rate sheets. That’s not uncommon and we would have been well within our rights to expect additional improvements…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Posted To: Mortgage Rate WatchMortgage rates didn’t move much for the second day this week. Unlike yesterday, there was a relatively massive amount of volatility in underlying financial markets. This was especially true for stocks and the US Treasury market (which sets the tone for the broader bond market where mortgages operate). Even if we look specifically at mortgage-backed securities (MBS), we see some of the best gains this month. In fact, mortgage rates likely would have ended the day with more noticeable improvement if the gains had remained intact. Unfortunately , the strength began to erode in the late morning hours. Bonds had benefited from massive stock losses, but starting just after 10am, stocks began to bounce back while bonds weakened (weaker bonds = higher rates). Momentum kicked into higher gear later…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.