Category: Mortgage News Daily

Posted To: MBS CommentaryBelieve it or not, any given month stands a better than average chance to convey some sort of theme for bond trading. In other words, there tends to be a discernible bias higher, lower, or sideways. It’s uncommon to see all 3 biases in the same month. August and September were quite clear in this regard. August was good. September was bad. Now that September is over, we’re well within our rights to wonder if October will keep the bad times rolling or offer reprieve. Given that yields had been very near long-term highs and that momentum indicators suggested a potentially friendly bounce, it’s fair to hope for a friendly October. Unfortunately, if the first few hours of the month are any indication, we may find life isn’t always fair. The saving grace so far is that the weakness…(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 total value of construction put in place during August only ticked up 0.1 percent compared to July, but the small, steady increases each month have now put spending up 6.5 percent compared to August 2017 . The Census Bureau put the seasonally adjusted annual rate of spending in August at $1,318.5 billion. The July estimate was 1,317.4 billion and the prior August it was $1,237.5 billion. On a non-adjusted basis there was $122.0 billion spent during the month, compared to $122.0 billion in July. Year-to-date (YTD) expenditures are also up significantly from last year. During the first eight months of 2017 there were $818.8 billion expended; spending during the same period this year totals $862.0 billion, an increase of 5.2 percent. Privately funded construction expenditures in August were…(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: Pipeline PressGoldman Sachs telling us it expects four more short-term rate increases by the Fed in 2019, and it doesn’t make money by being wrong. Is your company ready for that? STRATMOR discusses “operational reviews” below – worth a gander. Company Tune-ups Are you building a process review into your strategic plans for 2019? Be sure to read “The Strategy of Process” in STRATMOR Group’s September Insights report , available today. With our industry’s “New Normal” conditions of housing inventory shortages, virtually no market growth, excess origination capacity, compressed margins, and continuing pressure to invest in technology, proactive lenders are seeking sustainable competitive advantages through investment in technology and process redesign…(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 CommentaryYesterday’s Fed announcement–specifically, Fed Chair Powell’s press conference remarks–set bonds up for a potential bounce. This would come at a critical time considering the prevailing trend for September has/had 10yr yields on a collision course with the highest levels in years. After a week’s worth of sideways trading just over a firm floor of 3.06%, yields managed to sneak all the way down to 3.048% yesterday afternoon. Today becomes a battle to see whether or not we can remain under 3.06% (or ideally, 3.05%). While that’s currently NOT the case at the moment, it’s about where we end the day that matters (at least, it matters more than where we are at 9am). In technical terms, momentum has been oversold for a while. Unfortunately, an oversold condition is never a guarantee…(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.