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Posted To: Pipeline Press“Rob, I think we’re going to make it.” Thus began a note I received yesterday from the owner of a small retail lender in the mid-Atlantic region. “We’ve moved from 90% refi to 70% purchase, have deep roots in the community, and 80% of our business is high margin govie production that is profitable. Yes, we’ve trimmed some staff, and yes, we’ve had to sell some servicing, but the income from the remaining servicing helps us make ends meet.” That was a good note. I wasn’t going to bring up the “servicing income supporting production” issue, but I did reply that it was a good thing the company has roots in the community because one can bet Wells, Chase, and other banks are continually looking at cranking up FHA origination (risk…(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 CommentaryToday’s gains are primarily a factor of the bond market’s response to yesterday’s Cohen headlines (plea deal regarding campaign finance violations). Bonds aren’t too flustered about the headlines, but a few traders sought safe havens due to the increased odds that the president will eventually be implicated by the underlying investigation. 10yr yields were pushing their best levels in months just before the 9:30am NYSE open. After that, stocks took charge, telling bonds not to worry about those political headlines and to calmly back away from a range breakout. Bonds complied, but reserved the right to react to the afternoon’s FOMC Minutes. The Minutes were almost completely uneventful, with most of the bullet points well-assumed by financial markets. If there was any detectable…(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 haven’t really moved for 9 straight business days. Some lenders have seen microscopic improvements during that time, but the average lender is still quoting the same rates and fees seen on August 13th. The underlying bond market is part of the problem. Bonds–which dictate rates–haven’t been too interested in responding to conventional inputs. The bonds that underlie mortgages are especially guilty (compared to, say, US Treasuries which are more willing to respond to news and events at the moment). That doesn’t mean nothing can happen that would have an effect, simply that the stuff that has happened hasn’t been enough to move the needle. When market participants return in full force in mid-September, this seasonal pattern typically changes. It could even happen sooner, but…(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 NewsWireThe Federal Housing Finance Agency (FHFA) has pulled the plug on pilot programs run by both Fannie Mae and Freddie Mac (the GSEs) to finance institutional investment in single-family home rentals. The programs began in February 2017 with a $1 billion loan from Fannie Mae to the Blackstone Group. The loan was originated by Wells Fargo with a Fannie Mae guarantee and secured by some of the 48,000 single-family homes Blackstone’s Invitation Homes subsidiary had purchased during the recession, often from portfolios of lender-owned real estate, and turned into rentals. At the time, the Urban Institute wrote that the transaction “marks the first time a government-sponsored enterprise has facilitated financing for a large institutional operator of single-family rental properties,” and Fannie Mae pronounced…(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 NewsWireExisting home sales posted their fourth straight loss in July and have dropped to their slowest pace since February 2016. The National Association of Realtors® (NAR) said sales of previously owned single-family houses, townhouses, condos, and cooperative apartments were at a seasonally adjusted annual rate of 5.34 million units last month. This is a 0.7 percent decline from the 5.38 million units reported for June and puts sales behind those of a year earlier for the fifth straight month, this time by 1.5 percent. Analysts keep anticipating a rebound for existing sales and continue to overshoot the mark. Those polled by Econoday expected July sales to be in the range of 5.39 to 5.51 million with a consensus of 5.42 million. Single-family home sales declined by 0.2 percent to a seasonally…(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 CommentaryNews regarding Cohen’s plea deal came out right as futures markets were closing yesterday. There were only 15-20 minutes for a reaction, and we wouldn’t normally expect to see a full-fledged reaction at that time of day anyway–especially during this time of year. That left some uncertainty as to how today would begin, but bonds ended up being right in line with yesterday’s post-Cohen levels a few minutes into domestic trading. Volumes have been far from extreme, suggesting markets aren’t incredibly interested in this drama until and unless it officially involves the president. Still, they’re interested enough to help push bonds right up to the edge of their best levels of the summer . The next major milestone would be a break below 2.82% in 10yr yields. If that ends up…(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 PressNow that we’re more than halfway through the third quarter, how’s it shaping up for lenders? Yes, the industry has reduced its ranks, therefore cutting costs. In terms of production, with $1.6 trillion expected this year, we are seeing fewer refis (but they’re still out there, and account for 39% of apps) and more purchase biz. But the Mortgage Bankers Association trimmed its third-quarter outlook for total business slightly, and now is expected to hit $443 billion this quarter, $370 billion in the 4th quarter, and $328 billion in the 1st quarter of 2019. The trend is not our friend. Upcoming Events and Training Do you need to accelerate your digital mortgage journey? Register for an exclusive webinar presented by the CMBA Mortgage Technology & Marketing on August 22nd…(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 NewsWireLast week’s mortgage application activity was the best since early July as interest rates for most products drifted lower for the second week. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage loan application volume, rose 4.2 percent on a seasonally adjusted basis during the week ended August 17, the first positive reading in six weeks. On an unadjusted basis, the Index gained 3 percent compared with the previous week. Most of the increase came from a boomlet in refinancing. The Refinance Index was up 6 percent from the previous week and the share of applications that were for refinancing increased from 37.6 percent the previous week to 38.7 percent. The seasonally adjusted Purchase Index rose by 3 percent and the unadjusted version increased 1 percent…(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 CommentaryThe S&P 500 hit a record intraday high today (just over 2873.22 compared to the previous high of 2872.87). In other words, it wasn’t a triumphant surge. Moreover, it served as a ceiling, with closing levels being nearly 10 points lower. Bonds didn’t pay too much attention, but they definitely took some directional cues from today’s stock movement, which began at the start of the overnight session. By 8:20am, stocks had dragged bonds into moderately weaker territory. The CME open provided a bump in liquidity that helped bonds recover a portion of their overnight losses. But the 9:30am NYSE open took things right back in the other direction, making for the highest yields of the day just after 10am. 10yr yields ended the day up 2.5bps at 2.844 and Fannie 4.0 MBS lost less than…(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 generally unchanged again today although several lenders were in just slightly better territory. That makes this the 8th straight business day with almost no change in mortgage rates. During that time, underlying bond markets have improved slightly. Normally, those improvements would translate to modest improvements in rates, but lenders are waiting for a bigger breakout that, thus far, has failed to materialize. If there is an event on the near-term horizon that will prompt such a breakout, it’s not clear what it will be. Tomorrow brings the occasionally-important Fed Minutes release. This isn’t a new policy announcement, nor is it a venue for the Fed to make any changes to rates or bond buying protocol. Rather, it’s just a detailed account of the Fed meeting that took…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.