MBS RECAP: Bonds Extending Last Week’s Holiday

Posted To: MBS CommentaryVolume may be picking up for the bond market following the typically quiet Thanksgiving trading week, but you wouldn’t know it by looking at the movement in the charts. Yields are still dead flat in the context of the past few weeks. In fact, they weren’t even able to trade outside last Friday’s range. It’s not as if it’s some great crime for bonds to be flat. It’s also not as if that flatness guarantees the next move. In the current case, the absence of change is grounds for some mix of anxiety and excitement as rates are on the edge of re-entering the lower range from the summer months. Either that, or they’re on the verge of bouncing back toward long term highs. It all depends on what happens next. As for today’s specific motivations, it’s hard to delve…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Mortgage Rates Hold Recent Lows

Posted To: Mortgage Rate WatchMortgage rates avoided returning to reality yet again today. In other words, rates were almost perfectly unchanged for the 4th straight business day. These patterns (or lack thereof) are fairly typical of the thanksgiving time frame, but the return of volatility is a bit of a moving target after that. Clearly, we’re not there yet. That’s a good thing in the recent context because it means rates are still operating at their lowest levels in more than a month. It’s a bit more unpleasant in the broader context because it means rates are showing little desire to move much lower from their highest levels since 2011 (seen at the beginning of the month). In non-rate-related news, the FHFA–Fannie Mae and Freddie Mac’s regulator–announced higher conforming loan limits , from $453,100 to $484,350….(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Loan Limits Increase to $484,350

Posted To: MND NewsWireGiven the rapid run-up in home prices over the last year, it’s no surprise that loan limits will also be going up in 2019. The Federal Housing Finance Agency (FHFA) announced that the maximum conforming loan limits for mortgages eligible for acquisition or guarantee by the two government sponsored enterprises (GSEs) Freddie Mac and Fannie Mae will be $484,350 . The conforming loan limit as established by the Housing and Economic Recovery Act (HERA) is reviewed each year and adjusted as necessary to reflect the change in the average U.S. home price. The new limit represents a 6.9 percent increase over the $453,100 limit for 2018, the percentage by which FHFA’s Housing Price Index (HPI) for the third quarter of 2018 increased on an annual basis. The new limit is considered the baseline for conforming…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Home Prices Still Increasing – Just a Little Slower

Posted To: MND NewsWireThe views about the direction of home prices diverged slightly in September, as those reported in the S&P CoreLogic Case Shiller indices slowed for the second month in a row while those from the Federal Housing Finance Agency (FHFA) for both September and the third quarter mostly kept chugging along. The Case-Shiller National Home Price index which covers all nine U.S. census divisions slowed from a 5.7 percent increase in August to 5.5 percent. On a non-seasonally adjusted basis the index gained 0.1 percent and was up 0.4 percent after adjustment. The monthly appreciation in August was reported at 0.2 percent unadjusted and 0.6 percent afterward. The slowing was not as evident in the two city composite indices. The 10-City posted an annual increase of 4.8 percent , down from 5.2% the prior…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

MBS Day Ahead: Do Bonds Care About Oil’s Slide? Also: New Loan Limits

Posted To: MBS CommentaryOil prices are always interesting to consider when it comes to bond markets. After all, oil is a major cost input for the economy. Even the “core” inflation readings, which disregard oil prices, are unable to account for oil’s impact on the price of everything else. Point being, if fuel is being burned to transport all the goods that still show up in core inflation readings, oil is still having an impact. From there, of course we can consider that bonds are supposed to care about inflation. They generally do, apart from the moments in history where very few market participants were remotely concerned about it, regardless of the numbers (2012 and 2016 come to mind). But now that core inflation has edged back to (or above, depending on when you look) the 2% level, bond markets are…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Sales, Branding, Non-QM Products; “Don’t Fight the Fed” When it Comes to Rates

Posted To: Pipeline PressWill today or tomorrow bring the 2019 Freddie and Fannie loan limit change announcement? Stay tuned, as it usually released soon after Thanksgiving. Is it arguably less impactful since many jumbo programs have lower rates than conventional conforming products since they don’t have guarantee fees, fit nicely into some portfolios, and have lower compliance costs to originate. One thing is clear: lender M&A continues. For example, yesterday we learned that Firstar Bank has reached an agreement to acquire the assets of Firstar Bank has reached an agreement to acquire the assets of Leader Mortgage . And unlike GM’s plans to “idle” five factories in North America and cut some 14,000 jobs, lenders are hiring: Lender Products and Services Ethos Lending is being called “the…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Black Knight: Delinquencies See Sharp Decline in October

Posted To: MND NewsWireMortgage delinquencies spiked in the September “first look” report from Black Knight, but that was followed by a swift reversal in October. The company’s latest report notes a sharp decline in early stage delinquencies and a downturn in serious ones as well. Loans that were more than 30 days past due but not in foreclosure fell 8.2 percent month-over-month and were nearly 18 percent lower than in October 2017. This translates into 165,000 fewer delinquencies than in September and an improvement of 378,000 year-over-year. These changes leave 1.884 million loans in the national non-current bucket. Serious delinquencies were down as well. Within the total number of loans that are overdue just shy of a half million are 90 days delinquent but not in foreclosure , a 12-year low. This is down by 14…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

MBS RECAP: Bonds Not Panicking Despite Finding Resistance

Posted To: MBS CommentaryMost of today’s bond market movement followed a single trade in the morning hours. Someone with deep pockets bought a lot of 2yr Treasury debt and sold some longer-term debt in the process. This type of “curve trade” (so named because its intent is to take a position on the movement of the yield curve ) is common. Curve trades are happening all the time every day. This one was just much bigger than normal. That doesn’t mean it’s necessarily significant, however, as the week after Thanksgiving (which often includes the last few trading days of November) typically sees a unique combination of certain traders getting back into the market after the holiday while other traders are getting into requisite positions for month-end . The big morning trade acted to reinforce a floor…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Mortgage Rates Still On Vacation

Posted To: Mortgage Rate WatchMortgage rates began the post-holiday week by holding the same sideways posture seen last week during the slow market days surrounding Thanksgiving. Generally speaking, slow market days make for limited mortgage rate movement. The Monday following Thanksgiving is often something less than a full-fledged trading day for the investors that ultimately dictate interest rate momentum. In other words, today’s absence of change isn’t abnormal . There’s a greater chance that we see some more movement in the coming days. That’s both exciting and ominous . Rates are at something of a crossroads. Put another way, rates are knocking on a floor that used to be a ceiling. If they can make it back to the next floor down (into the range seen during the summer months), it would provide a solid indication that…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

Can Owning a Home Still Build Wealth?

Posted To: MND NewsWire”Possibly the only thing worse than a world in which homeownership doesn’t work as a wealth-building tool is a world in which it does work as a wealth-building tool.” That statement summarizes the argument made recently by Daniel Hertz, senior fellow at City Observatory who contends that housing can’t be both affordable and a good investment. This observation runs contrary to conventional wisdom that homeownership is the most reliable pathway to household wealth. Well perhaps it is, Hertz says, just not for everyone. And this pits two pillars of American housing policy directly against each other. Hertz say that promoting homeownership as an investment strategy is risky. No financial advisor would advise going into debt as well as putting a substantial portion, if not all, of one’s savings…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

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