Category: Mortgage News Daily

Posted To: Mortgage Rate WatchMortgage rates were generally unchanged again today although several lenders were in just slightly better territory. That makes this the 8th straight business day with almost no change in mortgage rates. During that time, underlying bond markets have improved slightly. Normally, those improvements would translate to modest improvements in rates, but lenders are waiting for a bigger breakout that, thus far, has failed to materialize. If there is an event on the near-term horizon that will prompt such a breakout, it’s not clear what it will be. Tomorrow brings the occasionally-important Fed Minutes release. This isn’t a new policy announcement, nor is it a venue for the Fed to make any changes to rates or bond buying protocol. Rather, it’s just a detailed account of the Fed meeting that took…(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 500 hit a record intraday high today (just over 2873.22 compared to the previous high of 2872.87). In other words, it wasn’t a triumphant surge. Moreover, it served as a ceiling, with closing levels being nearly 10 points lower. Bonds didn’t pay too much attention, but they definitely took some directional cues from today’s stock movement, which began at the start of the overnight session. By 8:20am, stocks had dragged bonds into moderately weaker territory. The CME open provided a bump in liquidity that helped bonds recover a portion of their overnight losses. But the 9:30am NYSE open took things right back in the other direction, making for the highest yields of the day just after 10am. 10yr yields ended the day up 2.5bps at 2.844 and Fannie 4.0 MBS lost less than…(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 can keep interest rates low in the United States? A slow economy. What can cause higher rates? Inflation. To no one’s surprise, U.S. tariffs have increased prices on raw materials and other costs for domestic manufacturers, according to a survey by the Federal Reserve Bank of New York . Many manufacturers say they plan to pass increases on to clients, which could apply upward pressure to inflation, while a New York Fed blog post says tariffs will cause “little or no improvement in the trade deficit.” (And for you aging LOs looking forward to tootling around on your electric bikes, well, bad tariff news there too .) Conventional Conforming News As of August 17th, ResMac B2B will no longer accept new agency Conforming, Jumbo, FHA, VA and USDA loan applications from its Wholesale and…(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 CommentaryWith yields touching the lowest levels in more than a month yesterday, there are two distinct cases to be made for the path ahead. In the more pessimistic case, those low yield levels fall in line with the bottom of the range seen from late June through late July. They coincide with technical indicators that are increasingly suggesting bonds are overbought (i.e. susceptible to bouncing off a floor/resistance level). Optimists would be quick to point out that many a great little rally has begun with technicals prematurely suggesting resistance. After all, technicals aren’t magic tea leaves–just another way to consider possible future outcomes. Especially clever optimists could also point out that other technical overlays could make entirely different cases. For instance, if we compare most…(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 NewsWireIrving Berlin once wrote, “The song might be over, but the melody lingers on.” That, according to a paper from the Federal Reserve Bank of San Francisco (San Francisco Fed), sort of describes the Great Recession. A decade after the financial crisis and recession the U.S. economy remains significantly smaller that it would be had its pre-growth trends continued. Three Fed researchers, Regis Barnichon, Christian Matthes, and Alexander Ziegenbein, say this diminished level of output could result in a lifetime present-value income loss of about $70,000 for every American. Not only is the U.S. GDP, adjusted for inflation, well below the level it seemed inclined to achieve based on its growth before the recession, but so are the economies of the United Kingdom and other European counties . This diversion…(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 almost perfectly unchanged again today, meaning they haven’t really changed in more than a week. All this despite a rather noticeable improvement in underlying bond markets (something that typically goes hand in hand with lower mortgage rates). Granted, the bonds that underlie mortgage rates didn’t do quite as well as US Treasuries, but even then, mortgage rates barely budged. Is this some sort of evil conspiracy? Probably not… It probably has more to do with a phenomenon we discuss fairly frequently whereby the improvements in bonds over the course of the day aren’t quite enough to get lenders to change their rates in the middle of the day. The result is that lenders are more likely to offer those improvements tomorrow morning assuming, of course, that bond markets don…(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 CommentaryWhen it comes to financial markets, the definition for “jawboning” is a bit looser than normal as it also encompasses market movement that occurs simply because “someone” said “something.” In other words, in some cases, the person who said the thing that moved markets may not have been trying to elicit a certain response, but I would still call that jawboning. Ultimately, though, what we call it doesn’t matter . The fact is that today’s market movers were all mere comments from a few key people as opposed to any new fundamental or technical developments. These included comments from Jeffrey Gundlach (from late Friday) on the risk of a short squeeze in bonds, comments from Altanta Fed Pres. Bostic on slowing down rate hikes, and reports of the President…(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 my travels around the States, I see that some lenders are nervous. Yes, margins appear to have, for the most part, stopped compressing dramatically. Many lenders have exited, as have low-producing production staff. Staff reductions will continue. But veterans of the biz know that summer is basically over, in terms of the locked pipeline. Many locked loans will fund in September and October. Autumn is around the corner, and winter is coming… neither of which are traditional high purchase volume seasons. And it is doubtful that lenders will have large number of refinances to cushion any seasonal volume blows. Survival of the fittest… and of those with the lowest cost to produce to outlast competitors. Capital Markets MCT is proud to announce new functionality that delivers real…(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 frustrating thing about weeks that are normally vacation-heavy is that the resulting lack of volume and liquidity can leave bonds in a position to make quick, unprovoked, illogical movements… sometimes. Other times, the vacation-week gameplan is simply to keep bonds as close to unchanged as possible, with the intention of sorting things out after everyone gets back in the office. To make matters just a bit more uncertain, there are no economic reports until Wednesday and only one significant piece of data with Friday’s Durable Goods. We’ll also get Fed Minutes on Wednesday, but don’t expect fireworks considering the meeting itself produced a very bland policy announcement. Technicals are in agreement with fundamentals. Yields are grinding around in a sideways range in 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 Commentary10yr yields ended the week at almost exactly where they began. With the exception of Tuesday, bonds closed within 1.5bps of each other on the other 4 days this week. Tuesday was only 2bps higher and gave way to an overnight rally that restored the range anyway! Long story short, for all the hullabaloo about Turkey/China/Etc. it was a really quiet week. Part of the issue is that Turkish shockwaves had their fun last week, but even then, it’s not as if bonds are making big moves in the bigger picture. If bonds aren’t moving, perhaps we can find something interesting to say about something that IS moving and that usually has an effect on bonds. Granted, I’ll be the first to point out that the stock market should never be seen as a bond market indicator, but if we want to keep track…(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.