Category: Mortgage News Daily

Posted To: MBS CommentaryOne of the themes we often revisit in times of trouble is the long-term bull market in bonds. This traces back to the 80’s and provides a shockingly linear set of lower highs and lower lows in 10yr yields. Most recently, we’ve seen yields rise back to the upper boundary of the long-term trend. There’s still a chance they could hold ground here, but any further weakness means an official breakout. One other reason to hold out hope is that yields are also at the top of a shorter-term uptrend (teal lines). This could offer some technical support of its own, but it should be noted that the current version of that uptrend is much less linear than the one seen from 2002-2007. Incidentally, I think all of this “big picture trend” business is just a cheap trick (one I’ve often…(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 PressThis Saturday is the autumn equinox – season-wise, we know what is on the way. “Rob, we, like everyone else, are watching the approaching winter, and higher rates, and wondering if there are ways to improve our financial picture without laying people off or cutting LO comp. Heard of anything?” This is going to sound like a paid ad, but it is not. I refer folks to Riivos (ex-Alight). It’s a cloud-based application for mortgage companies, regardless of size, that “integrates with your core systems (G/L, LOS, payroll, etc.) to show where your BPs are going, what actions you can take to improve profitability, and insight into how those decisions ripple through the company and increase P&L.” They specialize in “what if” scenarios. IMHO, and my…(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 share of loans originated for refinancing rose in August for the first time this year. Ellie Mae’s Origination Insight Report shows that closed transactions for refinancing represented 32 percent of the total, up 3 percentage points from July. The 3-point increase was consistent across all loan types. The refinancing share was 45 percent at the first of the year. The distribution of loans across loan types has been unchanged since May. Conventional loans have a 66 percent share, FHA loans 20 percent, and VA loans 10 percent. The average closing time for all loans was 43 days for the second straight month. The time for purchase loans to close, however ticked up 1 day to 45 days while the timeline for refinance loans dropped 3 days to 38. The average FICO score for closed loans dipped one…(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 titular question could be taken two ways . Is the selling pressure in bonds over? Is the “low rate environment” that’s been in effect since mid-2011 over? The answers, in order are “probably not” and “for now.” To be fair to the “low rate environment,” that’s arguably been over since 10yr yields broke above 2.5% in a serious and sustained way. They’ve only done that one other time since moving below and that was the 6-7 months following the taper tantrum. I’ve frequently suggested that mid-2012 was the truest confluence of low rate motivations and that mid-2016’s drop in rates was more of a pain trade for everyone betting on higher rates (Brexit was the scapegoat). If you look past the taper tantrum and the brexit rally, 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: MND NewsWireLabor Day typically marks the end of summer and the resumption of business as usual. Hopefully it also marked the beginning of a turnaround for mortgage applications, which increased across the board for the first time since mid-June. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage application volume, was up 1.6 percent on a seasonally adjusted basis during the week ended September 14. On an unadjusted basis the volume increased 12 percent from the previous week which was shortened by the Labor Day holiday. The seasonally adjusted Purchase Index eked out an 0.3 percent gain , the third week in a row it has increased. On an unadjusted basis the index was up 9 percent week-over-week and was 4 percent higher than the same week in 2017. Even refinancing…(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 PressI received this question from a well-known lender in Texas. “Rob, our company views loan processors as the unsung heroes of lending. We’re evaluating how ours are paid. Any thoughts?” The STRATMOR Group does quite an industry survey, and its recent data shows that the overwhelming majority are paid some incentive, and that their base salary is about ¾ of their total comp. The incentives are either a per loan payout, the achievement of certain objectives, or miscellaneous company-specific items. Capital Markets Yes, rates have moved up. Is that a surprise to anyone? Shouldn’t be. Are you hoping tariffs hurt our economy and push rates back down? Don’t hold your breath. So, what should we know about why rates are doing what they’re doing? Any reason 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 NewsWireBoth permits and starts were expected to pick up in August, at least holding on to their slight gains in July. Housing starts did deliver, posting a strong increase, but permits, a leading indicator, were down sharply. The U.S. Census Bureau and Department of Housing and Urban Development report that permits fell by 5.7 percent in August to a seasonally adjusted annual rate of 1,229,000 compared to the July rate of 1,303,000. The July number was a downward revision from the 1,311,000 units originally reported. This knocks the rate of permitting below the August 2017 level of 1,300,000 units by 5.5 percent. Analysts polled by Econoday were looking for permitting to come in at a consensus rate of 1,315,000 units with a range of 1,260,000 to 1,323,000. Permits for single family houses were reported…(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 are in bad shape . At some point in the past 3 days (depends on the lender), top tier 30yr fixed rate offerings hit their highest level in 5 years, then 7 years. For the first time since 2011, the most prevalent top tier rate is 4.875% (meaning a handful of lenders are at 4.75% or 5.0%). If this trajectory holds, the average lender would be at 5% next week. In order to make the past few days relevant for anyone who reads this, let’s focus on the CHANGE between today’s average rates and those seen less than a week ago. From Friday the 14th, the average 30yr fixed quote is an eighth of a percentage point higher (.125%). While we’ve seen moves that big in the past, with only 1 or 2 exceptions, we haven’t seen anything like it in 2018. And when we consider that it takes rates to…(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 in the market for newly-built single-family homes stabilized a bit in September. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which has been wobbly in recent months, retained its August reading of 67 in September. The two months are tied at the lowest level of the index so far this year. “Despite rising affordability concerns, builders continue to report firm demand for housing, especially as millennials and other newcomers enter the market ,” said NAHB Chairman Randy Noel. “The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes competitively priced.” Derived from a monthly survey that NAHB has been conducting…(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 edged up to 4-year highs with yesterday’s bond market losses and things went from bad to worse today. Bond markets (which underlie and directly affect rates) are under extreme pressure today and have generally had a very bad September. Weakness in bonds equates to higher rates. So why are bonds weak? In part, this is weakness that was expected way back at the beginning of the year as the tax bill came to fruition and as economic data continued to suggest ongoing expansion. Given that the inflation/growth outlook was a whole lot worse in 2013 and early 2014 when 10yr Treasury yields briefly crested 3.0%, it stood to reason that those same yields would almost certainly need to move well over 3.0% this time around (inflation/growth are key factors in Treasury yields and rates in…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.