Category Archives: Home builders

MBS RECAP: Stocks Surge and Bonds Stumble Ahead of NFP

Posted To: MBS Commentary

Generally higher yields and tepid intraday performances are nothing new for bond markets over the past week and a half. In some ways, today marked a mere continuation of that trend and even offered some silver linings. In other ways, it kicked the weakness into a slightly higher gear ahead of tomorrow’s jobs data. In terms of silver linings , intraday yields managed to hold below the intraday highs seen on 3 other recent tradings sessions (beginning with September 28th). That could be taken as evidence that bonds are consolidating and haven’t really made up their mind. Moreover, bonds have been able to do that even as stocks have embarked on a rather impressive run to new all-time highs, with today being the most impressive of the lot. If you stop reading after the previous sentence…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

MBS RECAP: Weaker ISM Data Keeps Bonds Guessing

Posted To: MBS Commentary

Bond markets saw a decent amount of strength in the afternoon. It ultimately allowed 10yr yields and MBS to return to positive territory by the end of the day, although they’d be best-characterized as merely “unchanged.” Who knows where trading levels would have shaken out were it not for the significantly stronger ISM non-manufacturing data this morning. ISM came in at the best levels since 2005, essentially matching the best-since-2004 performance of the “manufacturing” version of the same report on Monday. Here too, the “prices paid” component was the highest in several years . Why does that matter? Simply because the Fed is desperately seeking inflation in order to justify its rate hike trajectory. In fact, if inflation doesn’t pick up in the coming…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

MBS RECAP: Small Gains Leave Broader Losses Intact

Posted To: MBS Commentary

Both yesterday and today have been the sort of days that just haven’t mattered in the slightest for bond markets. Yesterday was spent consolidating the losses seen through the end of last week. Today saw a similar consolidation, despite trading levels finishing slightly stronger compared to yesterday’s close. Before getting too excited about that, consider that today’s 3pm CME closing levels were still higher than Friday’s. We’re left with the impression that trader exhaustion has set in after a busy end to the previous month. Given the timing of Columbus Day this year (this weekend), we might even be waiting until next Tuesday for anything truly interesting to happen. But opportunities for market movement improve with tomorrow’s economic data (ADP employment at 815am…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

Mortgage Rates Mixed, but Higher on Average

Posted To: Mortgage Rate Watch

Mortgage rates were lower today for a few lenders, but higher for most others, dragging the average 0.01% higher in terms of effective rates. Note rates (which don’t factor in the upfront costs associated with a loan quote), on the other hand, haven’t changed much in recent days, with 4.0% being the most prevalent for top tier 30yr fixed scenarios. Momentum has generally been negative for rates since the weekend of Hurricane Irma. Markets had priced in quite a bit of risk at the time (typically involves stock prices and rates moving lower), not only due to the Hurricane, but also North Korea-related uncertainty. When Irma proved to be slightly less catastrophic than forecast, and when the weekend passed without a major nuclear test from North Korea, financial markets embarked on a correction…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

MBS RECAP: Strong Start, Weak Finish on Fed Musical Chairs and Month End

Posted To: MBS Commentary

The music is currently playing for the role of Fed Chair next year. When the music stops, Yellen may or may not still have a seat. News came out this morning that Trump was meeting with former Fed governor Kevin Warsh about filling the role. Warsh is also the son-in-law of one of Trump’s long-time friends, and is considered to be a “hawk” on the spectrum of dovish vs hawkish policymakers. Hawks favor higher rates, relative to doves, and less accommodation. As such, rates spiked this morning when the news hit, but never broke above yesterday’s domestic-session highs. Prior to that news, Core year-over-year PCE (one of the Fed’s favorite inflation metrics) fell to 1.3% from 1.4% last month. The Fed would prefer to see this at 2.0%, so the 1.3% result is rate-friendly. Indeed…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

Mortgage Rates Trying to Find a Ceiling

Posted To: Mortgage Rate Watch

Mortgage rates were decidedly higher this morning, with most lenders back above last week’s highs. At the time, those were the highest rates in more than a month, although the range has been relatively narrow. Underlying bond markets improved throughout the day, however, resulting in a fair amount of lenders revising rate sheets for the better. After those revisions, rates are pretty close to yesterday’s levels. One thing’s for sure: the average lender is still definitively higher compared to last Friday’s rates. Keep that in mind if you encounter one of the many news stories citing “unchanged” week-over-week rates from Freddie Mac’s Survey (which, as you may have guessed, can run a bit behind more up-to-the-minute changes). From a strategy standpoint, today’s resilience is a welcome sight…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

OIG Criticizes Ginnie Mae Oversight of Nonbanks

Posted To: MND NewsWire

Ginnie Mae, is a wholly owned U.S. government corporation that guarantees and securitizes pools of mortgages originated through FHA, Veterans Administration, and Rural Housing Administration programs. Since the housing crisis Gennie Mae has experienced a shift in is lender (issuer) base; the share of non-banks originating the loans underlying its mortgages-backed securities (MBS) has increased significantly. Now the Office of Inspector General (OIG) for the Department of Housing and Urban Development (HUD), has published the results of an audit which claims Ginnie Mae, in its oversight role, has not adequately responded to that shift. While Ginnie Mae guarantees and securitizes the above types of loans, it depends on its issuers to take full responsibility for servicing, remitting, and reporting…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

How to Ensure a Stressful Closing: Borrower Edition

Posted To: Community Commentary

There are copious resources available on what you should do during the loan process to expedite your closing. Your loan officer probably gave you a “to do” list; your realtor may have as well. Today we’re going to take a lighthearted (read: “sarcastic”) look at the top ways to NOT have a smooth closing, since knowing what to avoid can be just as important as knowing what you should do during your loan process. Stressful Closing Tip #1: Don’t sweat organization Your loan officer needs lots of documentation during the loan process, but don’t worry about having any of it ready in advance. Those tax returns are somewhere in the basement, and they’ll turn up eventually. You haven’t logged into your bank account in months, don’t get paper statements…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

Competition Lowers Credit Standards and Profit Expectations

Posted To: MND NewsWire

Since the fourth quarter of 2016, lenders have increasingly reported to Fannie Mae that they have been loosening their home mortgage credit standards. The company’s third quarter 2017 Mortgage Lender Sentiment Survey has those responses at a survey high. Fannie Mae attributes the apparent easing in part to increased competition. Across all loan types – GSE Eligible, Non-GSE Eligible, and Government – the net share of lenders who reported easing rather than tightening credit standards over the prior three months was up, ranging from a net of 12 percent for government loans to 25 percent for GSE eligible loans. Very few lenders said they were tightening standards – between 1 and 3 percent across loan types. When asked about their intentions for the next three months there were similar responses…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed

MBS RECAP: After More Nuclear Headlines, Bonds Punt

Posted To: MBS Commentary

Who knows how today’s trading would have unfolded absent the overnight headlines that North Korea was planning to test an ICBM with a Hydrogen warhead in the Pacific Ocean. This prompted a risk-off move early in the overnight session (stocks and bond yields lower). After that, bonds seemed reluctant to challenge either side of the most recent range (2.24-2.28%). That was basically it for the rest of the day. Yields drifted down to 2.24% just after the NYSE open, but quickly and decisively bounced. About an hour later a few big trades came across in the Treasury Futures complex, pushing yields abruptly higher, but not significantly higher. MBS held even steadier than Treasuries with Fannie 3.5 coupons staying inside an ultra-narrow range of 3/32nds. We’d expect to see today’s range…(read more)

Forward this article via email:  Send a copy of this story to someone you know that may want to read it.

The entire article can be viewed