Category: Mortgage News Daily

Posted To: Mortgage Rate WatchMortgage rates didn’t move much today. Some lenders were perfectly unchanged, but the average lender was just slightly higher. That’s at odds with underlying bond market movement (which directly impacts rates)–at least at first glance. Specifically, the bonds underlying mortgages were slightly stronger today. That would imply slightly lower mortgage rates. So why did rates rise? As is often the case, today’s seemingly paradoxical movement is due to timing . Bonds were weakening ever-so-slightly yesterday–something that’s consistent with lenders raising rates. But the bond market didn’t weaken enough for lenders to make those changes in the middle of the business day. Additionally, today’s bond market improvement didn’t really stick until the afternoon. Like yesterday, it wasn’t quite enough…(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 recovered roughly half of its losses from last week today, decisively breaking out of the consolidation pattern that had been in place through this morning. Bonds, on the other hand, are still in the consolidation pattern that accompanied the stock market volatility. In that sense, it was a good day (i.e. no one would have been surprised to see bond yields rise in concert with the big bounce in stocks). Bond traders could be waiting to make their move until tomorrow afternoon’s Fed Minutes, or bonds could have simply benefits from a glut of retirement account funding associated with yesterday’s tax deadline. Either way, they were clearly not willing to rally in any significant way. We still need to see 10yr yields break below 3.13% and hold those gains for a day or two before…(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 CommentaryWaiting… That’s all anyone has been doing since last Thursday in financial markets. One day prior, stocks jumped off a cliff and bond yields raced to the edge of the same cliff and peered over the side. It’s like one of those far-fetched movie scenes where the character who apparently just fell to their death is instead clinging to a surprisingly sturdy tree root for dear life. Bonds, on the other hand, may simply be gawking or lowering a rope. Either way, they’re not venturing down into that cliff to save stocks–at least not unless stocks slip even farther down. Analogies aside, both sides of the market have been in consolidation mode since last week’s stock sell-off. The following chart shows that bond yields have technically edged out of that consolidative range, but we’ve…(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 PressWhat’s not being covered by the mainstream press here at the MBA conference? How about, given the rough financial conditions, monthly (and not quarterly) financials being requested by warehouse & correspondents? How about some attendees bunking up two to a room to save money? Lenders trying to hire LOs, but the top LOs not wanting to move as we enter the 4th quarter and companies not wanting to hire the low-producing LOs? Both originators and management saying that regulator-impacted comp plans have continued to cause confusion, inequality, and hasn’t helped the borrower? And perhaps using net, or residual, income instead of gross income in the DTI calculation ahead of the “QM patch” expiring in January 2021? Capital markets In the secondary markets the Agencies…(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 NewsWireBuilder confidence ticked up 1 point in October, rising to 68. The National Association of Home Builders (NAHB), which produces the NAHB/Wells Fargo Housing Market Index (HMI) says this measure of confidence levels has held in the high 60s since June. “Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” said NAHB Chairman Randy Noel. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.” The index is derived from a monthly survey that NAHB has been conducting among its new home building members for 30 years. Respondents are asked to give their perceptions of the current market for…(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 is announcing a couple of enhancements to its Loan Advisor underwriting tool. The additional capabilities will allow lenders to automate the assessment of borrower income and assets to reduce documentation which the company says will significantly speed-up the approval process. There are several components to the advances which the company unveiled at the Mortgage Bankers Associations Annual Convention and Expo in Washington which began on Sunday. Automated collateral evaluation combined with collateral rep and warranty relief Automated assessments for borrowers without credit scores Automated asset and income validation. The automated collateral evaluation has been available in some form previously and with this announcement appears to be extended to condominium units . It is unclear…(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 sideways to slightly higher today, prolonging a 3-day trend of exceptionally light volatility. The 5 days before that (beginning on Wednesday, October 3rd) were completely different, with a huge move higher at first followed by a moderate recovery at the beginning of last week. That recovery largely followed the stock market weakness. Stocks and rates don’t always move in the same direction, but when stocks fall as quickly as they did last week, rates usually benefit. After such moves level-off, rates tend to wait for stocks to see if there will be an aftershock or a big bounce. For now, it doesn’t look like stocks have made up their mind yet, as they too have continued in a largely sideways pattern during the last 3 trading sessions. Loan Originator Perspective Bond markets…(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 NewsWireMBA President and CEO Bob Broeksmit, the Mortgage Bankers Association’s (MBA’s) newly installed president and CEO, delivered his inaugural speech to MBA’s annual convention on Monday, and he appears, at least from his prepared remarks, to be coming out swinging . His address opened with the sentence, “Mortgage market regulations are increasing costs and limiting YOUR ability to serve YOUR customers.” After presenting his background in the mortgage industry, Broeksmit went on to detail what he and MBA plan to do about those regulations, noting that new leadership in seven regulatory offices* that oversee the mortgage industry presents new opportunities to educate and inform policymakers. He also said MBA will be working with the new Congress to be elected next month regardless of who wins. 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: MBS CommentaryThis morning’s Retail Sales report was arguably the biggest-ticket of the week in terms of economic data. It speaks to the ongoing level of uncertainty that we saw almost no reaction despite a headline of +0.1 vs median forecast of +0.6, at least at first glance. There were some caveats underneath the headline. These included fluctuations in fuel prices as well as a substantial positive revision to last month’s numbers. In other words, the data may have actually made a decent enough case for “no reaction” in bonds. Even then, volume was very light and bonds continued looking most willing to take cues from stocks. That said, we can’t say that with utter certainty because stocks didn’t do much today either (the conclusion is based on the day’s shared peaks/valleys…(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 CommentaryBefore last week’s stock rout, bonds were stuck in a rut. For four straight sessions, they hit the highest intraday yields since 2011. Even after the 3rd biggest stock sell-off since the financial crisis, Treasuries were reluctant to rally in any extreme way. Take away the worst yields of the preceding 4 days and the post-rally levels last week would STILL have been the highest since 2011. There’s no question that bonds finally acquiesced to stock volatility as a key market mover. That continued to be the case throughout the week. The lower section of the following chart shows the difference in magnitude between the two moves as well as the consolidative patterns that both have carried into the current week. The implication is that this week will be all about resolving these consolidation…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.