Category: Mortgage News Daily

Posted To: Mortgage Rate WatchAfter hitting the lowest levels in exactly 2 weeks on Friday, mortgage rates bounced back up toward their recent highs today. This risk was already taking shape by Friday afternoon as the bond markets that underlie mortgage rates had deteriorated throughout the day. When bonds weaken enough during any given day, mortgage lenders are at risk of ‘repricing’ (revising the day’s original rate sheet, effectively raising rates). Even if bonds had merely held steady overnight, lenders still would have been forced to raise rates a bit today. But bonds managed to lose even more ground overnight, thus making for a more noticeable increase in rates compared to Friday afternoon. The net effect is that the average lender is now somewhere between the 2-week lows seen on Friday and the 7-year highs seen 3…(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 CommentaryAfter slogging up toward (but not over) long-term highs 2 weeks ago, 10yr yields began a waiting game that looked like it would take a cue from last Wednesday’s FOMC events. As bonds rallied coming away from the Fed, there was at least some chance that we’d turned a corner and could start thinking about a more sustained rally. Friday afternoon’s weakness r aised some doubts as to that potential rally, and today’s weakness confirmed those doubts. Bonds are right back in the same range, holding uncomfortably near the highest levels in 7 years set back in May 2018. There were no specific, overt sources of inspiration for today’s selling pressure. Granted, we could point to Canada joining NAFTA 2.0 or another strong reading in ISM Manufacturing (weaker than expected, but still…(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 CommentarySeptember has been a long month for the bond market as rates quickly trudged back up to levels that aligned with our more pessimistic assumptions for 2018. With strong average hourly earnings to start the month and several other upper tier economic reports coming in at the best levels in many years, it wasn’t too hard to reconcile the weakness. We’ve been forced to watch and wait for the first ray of sunshine to peak through the clouds. After the past 3 days of trading, we have our first potential break in the clouds. The most highly risk-tolerant clients and originators will be justifiably tempted to float here. That’s been the case since Wednesday afternoon’s Fed events (or possibly as early as last Friday for the truly bold who believed the year’s previous highs would…(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 PressIn less than 2 years, we’ll be closer to 2070 than 1970! Does anyone feel that it’s silly to think of middle-aged mortgage bankers believing that they can still dance well to this song like they did 30-40 years ago? (Yes, Animal House is 40 years old!) And am I the only one that might consider the number of awards being handed out in the residential lending business has cheapened actually winning an award? (Does that even make sense?) It seems like every week some publication has a new list of award winners, whether companies or individuals. Most of the individuals, if not all, are well deserving, but is it just a way to publicize the publication? If a dozen whatever’s put out their top 20 awards, year after year… Such a curmudgeonly thing for me to say! Capital Markets Sure…(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 made two announcements this week. The first is a long expected administrative change to requirements for private mortgage insurance (PMI) which will go into effect on March 31, 2019. The company updated these requirements under a mandate from its regulator the Federal Housing Finance Agency (FHFA), incorporating changes related to its assessment of credit and counterparty risk. The new financial requirements include revisions to the risk-based asset requirements, enhancements to the treatment of approved risk transfer transactions, and adjustments to risk transfer credit arising from counterparty risk associated with reinsurance transactions. PMI is required for mortgages where the borrower is making less than a 20 percent down payment. Gina Healy, vice president of credit 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: Mortgage Rate WatchMortgage rates were slightly lower again today, but there are some caveats. First of all, the average lender wasn’t in substantially better shape compared to yesterday afternoon. On top of that, bond markets (the underpinnings of mortgage rates) weakened throughout the day. If lenders were beginning their day looking at current bond market pricing, we’d likely have seen rates edge slightly HIGHER. As such, unless bonds manage to receive solid support from Asia and Europe on Monday morning, US lenders will likely be forced to bring rates a bit higher. Despite those gray clouds on the horizon, the average lender was indeed able to offer their lowest rates in 2 weeks for the entirety of the day, providing a much-needed respite from the recent spike toward long-term highs. Loan Originator Perspective…(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 brought rather pervasive pressure on longer-term rates and mortgages. It wasn’t a significant amount of selling, but it was fairly steady throughout the day–ultimately bringing us back into the red after starting the day in the green. Credit Europe for the green start. To a smaller extent, stock losses may have played a role. As domestic traders got started for the day, everything reversed course . Stocks gained. Bonds lost. Economic data was either uneventful or overlooked. The only noticeable theme in bond markets was a “steepening” bias. In other words, traders were willing to sell 10yr Treasuries much more readily than 2yr Treasuries. Indeed, 2s stayed green (and never really sold off) while 10s were up nearly 1bp by the close after beginning the day nearly 3bps lower…(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 leading indicator for existing home sales continued to struggle in August and for the fourth time in the last five months purchase contract executions fell back from those in the previous month. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), which is based on contract signings, dropped 1.8 percent to 104.2 from the July reading of 106.2. NAR said it was also the eighth straight month that its index was lower year-over-year. The August reading was down 2.3 percent from the level in August 2017. Expectations were not high for the August report. The consensus of analysts polled by Econoday was for the PHSI to be unchanged from July. The actual results were below even the lowest of analysts estimates which ranged from an 0.5 percent decline to a 2…(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 fell modestly again today. Over the past 2 days, we’ve managed to undo more than a week of damage, with rates back at their best levels since September 17th. That may sound a bit more exciting than it actually is, however. Many prospective borrowers would still be quoted the same rate over the past 3 days with the improvements limited to the ‘upfront cost’ side of the mortgage cost equation. All of the above runs counter to many of the mortgage rate headlines floating around the web and airwaves today. The average headline suggests rates are as high as they’ve been in 7.5 years, followed by some iteration of ‘all hope is lost.’ OK, so perhaps not every headline put it so dramatically, but you get the idea. Why are the majority of headlines telling you one thing while I’m telling…(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 CommentaryIn the past week, we’ve seen 10yr yields rise up and over 3.06%, flirt with 3.10%+ and come back down. This has happened only one other time since rates set all-time lows in 2012 and 2016, and that was in May of this year. Granted, rates drifted just a bit higher in May, but the patterns are similar. If we line up today with the corresponding day in May, tomorrow is a huge rally for bonds. But this time around, things are different. While that won’t necessarily mean anything tremendously bad or good, it does mean that past precedent isn’t actually suggesting the big rally. Reason being: the big rally back in May was almost entirely due to the Italian political drama. In terms of similarities, in both cases, we’ve had an overabundance of traders betting against bonds. So IF bonds…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.