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Posted To: Mortgage Rate WatchMortgage rates caught a break to end a week that was otherwise spent moving higher. Although we did see a bit of improvement in underlying bond markets yesterday, lenders were still getting rate sheets caught up with Wednesday afternoon’s bond market weakness. As such, we were left with a decent trading day but no improvement in rates. In order to see that improvement, we needed this morning to bring stronger trading levels and that’s exactly what it did. Lenders were consequently able to offer token improvements in the upfront costs attached to the same old rate quotes that have prevailed for weeks. In other words, bond markets aren’t moving enough for actual mortgage rates to change. Instead, movement is limited to the upfront costs (or credits) associated with any given loan–something that…(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 NewsWireFannie Mae’s 3% down payment HomeReady program was rolled out in 2016. HomeReady has numerous advantages over FHA loans (historically the most common “low down payment” option) and other conventional loans. We’ll compare them in this series. Today, let’s look at mortgage insurance costs: No upfront mortgage insurance premium: While both HomeReady and FHA have low down payments (3% for HomeReady, 3.5% for FHA), FHA loans add an upfront mortgage insurance premium (UFMIP) of 1.75% of the amount borrowed to buyers’ loan balances at closing. On a $200,000 purchase, that’s $3377. Think that’s not a significant cost? You don’t recoup it until you’ve made 12 payments! It also means that half your down payment goes to UFMIP costs, versus the…(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 NewsWireTaking out a mortgage with an origination balance higher than whatever the conventional loan limit was at the time used to be an expensive proposition. Home buyers and refinancers had an incentive to do whatever they could – higher down payments, piggy back second mortgages – to get their loan under that conventional limit in order to reap the benefits of lower borrowing costs. However, as Archana Prahan writes in the CoreLogic Insights Blog, since mid-2013 a jumbo loan has had lower borrower costs than a conforming loan, currently defined as one with a balance at or under $453,100. In the first quarter of 2018 that differential averaged 33 basis points (bps). As Figure 1 shows, conforming loans were cheaper during the period from the second quarter of 2007 to the first quarter of 2013, (blue…(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 CommentaryThere are a few different ways to measure volatility in the bond market, but one of the simplest is via the average daily trading range. That particular metric is showing volatility in line with the lowest levels on record. The lower volatility goes and the longer it stays there, the more likely we are to see a big move in rates. Many would argue that, because we’ve spent so much time moving toward higher rates during the past 2 years, that big move stands a good chance of being rate friendly. The catch is that it could still take months before such a thing begins to materialize. The other catch is that there are good reasons for the extended run of bad luck for rates. Moreover, there’s a risk of complacency due to the fact rates are being held a bit lower than they otherwise might…(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 Press“How can you make a comeback when you haven’t been anywhere?” It seems that 3D-printing is going places. NASA awarded five teams $100,000 in a 3D-Printed habitat competition. As the next step, the winners are required to 3D print a one-third-scale model of their design for a chance to win $2 million. And a Russian firm has announced commencement on the world’s largest 3D construction printer , capable of printing an entire six-story building before you can ask, “Where’s the inspector?” I am sure we could use them as polling places in this country. Fraud Just the word “fraud” is enough to make people take notice. Some writers won’t even address the topic because they don’t want their name and “fraud” together on the internet…(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 CommentaryWhile we can’t really avoid talking about “the range” recently (roughly 2.80 to 2.90 in terms of 10yr Treasury yields), we can at least talk about it in a slightly more enjoyable way today. As of yesterday afternoon, yields were essentially challenging the upper end of the range. Any weakness today would have meant a potential confirmation of a range breakout (which generally results in more momentum in the same direction). The day started to go well for bonds right from the overnight session with modest global market weakness and risk aversion prompting similarly modest gains in safe-haven bond markets. The PCE data helped too, albeit slightly. Traders were fearing a stronger-than-expected result, so when inflation was reported right in line with expectations, bonds got another…(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 at all, again today. There really hasn’t been any meaningful movement for more than 3 weeks. The same thing happened from late June through mid July. And if we broaden our definition of “sideways” just a bit, we can legitimately fit most of 2018 into the same conversation. Just about the only thing that’s interesting about recent rate movement is that it continues to keep us generally closer to the highest levels in 7 years. Part of the current problem is simply the time of year. It’s not uncommon to see underlying bond markets consolidate at some point in the summertime months before breaking higher or lower in September. The difference this time around is that part about 2018 being broadly sideways for the entire year. That would seem to suggest indecision among…(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 NewsWireFreddie Mac will be consolidating two of its mortgage products into a single offering effective October 29, 2018. The company announced this and other changes to its Selling Guide in a Bulletin on Wednesday. The affected products are Freddie Mac’s Home Possible and Home Possible Advantage Mortgages. The company said it is making the change in response to seller feedback and to provide those sellers with improved operational efficiencies and ease of use. The new product will offer the same loan-to-value (LTV) and total LTV (TLTV) ratios as in the Home Possible Advantage program although certain requirements and loan attributes will continue to vary depending on those ratios. The new product, to be called Home Possible Mortgages , will permit non-owner occupant borrowers on loans secured by one…(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 NewsWireFreddie Mac reported today that its total mortgage portfolio increased at an annualized rate of 3.5 percent in July. The portfolio balance at the end of the period was $2.136 trillion compared to $2.130 trillion at the end of June and $2.044 trillion at the end of July 2017. Purchases and Issuances totaled $32,721 billion, bringing the 2018 year-to-date total to $215.891 billion, Sales were ($1.028) billion and Liquidations ($25.413) billion in July and totaled ($12.873) and ($164.198) billion respectively so far this year. The annualized growth rate for 2018 through the end of July was 3.2 percent and the annualized liquidations rate was (13.4) percent. Single-family refinance-loan purchase and guarantee volume was $6.4 billion in July compared to $7.3 billion in June. The refinance share…(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 PressIs there a place for age or sex discrimination in mortgage banking? Of course not. So the court case earlier this month involving Sacramento’s Summit Funding and Rick Ruby (LOs know him from CORE) is being followed closely by the industry. At this point Summit and “profit participant” Rick Ruby lost a $1.6 million binding arbitration case. In other legal news, even as states and local governments are passing so-called “ban-the-box” laws, the Eighth Circuit has upheld a Wells Fargo employment policy that allowed the bank to fire employees, or not consider job applicants, based on criminal records. Erin Mulvaney reports that the court ruled against 10 African-American and Latinos who alleged discriminatory employment practices. And the courts are involved in the…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.