Mortgage News Daily

  • Posted To: MBS Commentary

    Today's headline could just as easily serve as the entire recap. By the time we get past the fact that Durable Goods came out much weaker than expected, there really weren't too many moving parts to today's trading session. In fact, the absence of movement following the Durable Goods data was somewhat notable in itself. Granted, this hasn't been a reliable market mover recently as far as econ data goes, but this was a big enough miss/revision to suggest some sort of reaction. In all likelihood, preparation for weakness in today's data was one of the reasons for the big reaction to yesterday's Markit Manufacturing data. In other words, traders gave it a bit more attention than normal because it raised concerns over today's Durable Goods report. MBS managed to hold...(read more)

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    Created: 5/24/2019 2:53:09 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates fell again today as mortgage lenders got caught up with yesterday's market movements. Mortgage rates are based on bond market trading levels, but mortgage lenders only adjust rates once per day unless there's quite a bit of movement. Yesterday saw such movement, and in those cases, lenders typically adjust rates to reflect only part of the overall shift in markets until the shift is confirmed for a certain amount of time. As such, when bond markets began the day in similar territory to yesterday, lenders were able to bring mortgage rates even lower than yesterday. With that, the average lender is back to the lowest rates in more than a year . It should be noted that several lenders are still a bit higher than they were on March 27th and 28th of this year. Other lenders are in...(read more)

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    Created: 5/24/2019 11:52:00 AM
  • Posted To: MND NewsWire

    There probably hasn't been a report on home sales or prices in the last four years that hasn't referred to the role of housing inventory in the depressed level of the former or the rapid acceleration of the latter. According to data from CoreLogic, there was a 4.5-month supply of homes available at the current rate of sales in March. (We assume that number includes both new and pre-owned homes.) This is less than half the supply, 9.1 months, available in March 2009. Shu Chen writes in CoreLogic's Insights blog that that both new construction and the mobility of homeowners have traditionally driven inventories and those are at low levels, but the shifting of homes to the rental market has also played a large role. This shift, of course, started with the housing crisis as millions of owner-occupied...(read more)

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    Created: 5/24/2019 7:36:38 AM
  • Posted To: Pipeline Press

    The Memorial Day weekend... Wasn’t it just Christmas? Let’s wrap up what’s on the front burner for execs at the MBA’s Secondary Conference as we see the trade-war driven low rates of 2019. Yes, MLO compensation and licensing is an “issue.” When asked about the status of MLOs being able to move from banks to non-banks, Pete Mills with the MBA responded with, “Here is a link to our resource page on the transitional licensing issue . The legislation passed in May 2018, and we are now working with the NMLS and the states to implement which will be mandatory nationwide by November 24, 2019. The MBA will be hosting a series of webinars this summer for members on implementation issues.” Others are intrigued with the implications of 85% of Ginnie issuance...(read more)

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    Created: 5/24/2019 6:03:04 AM
  • Posted To: MBS Commentary

    In the day just past, both stocks and bonds too part in a big risk-off trading pattern (stock prices and bond yields moving lower). Inspiration came from general trade war fallout, concerns over British political upheaval, and especially weak Markit PMI readings. We can also assume the skids were greased by short-covering . In the day ahead, bonds will attempt to hold on to their recent gains despite an illiquid pre-holiday trading environment. Durable Goods is the only economic data on tap and it hasn't been a huge market mover lately. If stocks manage to stage a major comeback, that could be a source of inspiration for bonds. The two haven't been perfectly joined at the hip, but the bigger the move in stocks, the more likely it is that we see a reaction in bonds. MBS Pricing Snapshot...(read more)

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    Created: 5/24/2019 5:52:45 AM
  • Posted To: MBS Commentary

    Both stock prices and bond yields moved sharply lower today for a combination of reasons. Trade tensions are ongoing, with visible effects being increasingly noted. British politics are also weighing on markets with Theresa May likely leaving office within the week. Most obviously today, the Markit manufacturing and non-manufacturing PMIs suggested economic contraction (or major deceleration, depending on the internal component in question). This coincided with heavy losses as the start of the NYSE session in stock to create a flood of safe-haven demand in the bond market. Bonds had their own structural motivation as well. This refers to the " structure " of the bond market in terms of the balance of trading positions with various stop-loss levels and duration preferences. In general...(read more)

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    Created: 5/23/2019 2:49:26 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates dropped quickly today as global financial markets underwent a volatile shift. When money is flowing out of stocks and into bonds (as it was today) rates move lower. There are several underlying reasons for the move and it's impossible to assign a value to each of them with perfect precision. Several of the most noticeable ingredients include: ongoing trade tensions, political upheaval in Britain, and weak economic data early in the day. Even though "stock selling" can be seen as an "effect" as opposed to a "cause," it was big enough that it created additional momentum for the bond/rate market. Simply put, when that much money is flowing out of stocks, it needs a safe place to hide. That place is often the bond market. The net effect for mortgage rates hasn't been fully realized...(read more)

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    Created: 5/23/2019 2:28:00 PM
  • Posted To: MND NewsWire

    After three straight months of gains, April's new home sales were expected to give back a little and they did. The U.S. Census Bureau said sales of newly constructed homes were at a seasonally adjusted annual rate of 673,000 units, a 6.9 percent decline from March. The retrenchment was made even more likely by a significant upside revision to those March numbers; from 692,000 in the original estimate to 723,000, the highest number in at least a year. Despite April's decline, the month's sales pace is well above that in April 2018, up 7.0 percent from that estimate of 629,000. Analysts had predicted sales would slow to an annual rate between 640,000 and 696,000 units. The consensus of those polled by Econoday was 680,000. On a non-adjusted basis there were 66,000 newly constructed homes sold...(read more)

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    Created: 5/23/2019 7:46:08 AM
  • Posted To: MBS Commentary

    In the day just passed, bonds rallied somewhat sharply as headlines suggested Theresa May was soon to be ousted as Britain's prime minister. Is it possible that other headlines regarding American politics were having an effect? Maybe to a very small extent, but the lion's share of the movement was a British/European affair. In the day ahead, the only significant economic data is New Home Sales, seen coming in at 675k vs 692k previously at 10am ET. Even then, this is far from a reliable market mover. Traders will be far more interested in assessing whether or not the recent, 'unexpected' rally is an ephemeral, pre-holiday diversion, or something of substance. I ranted for a moment on the notion of a market movement being "unexpected" yesterday because clearly, it just...(read more)

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    Created: 5/23/2019 6:12:36 AM
  • Posted To: Pipeline Press

    As millions around the globe revel in World Turtle Day, others are more interested about what went on the hallway chatter at the MBA’s Secondary Conference as we see the low rates of 2019. How a few of the big banks (Wells, Chase, Flagstar, to name a few) saw their residential mortgage profit rebound dramatically in the first quarter. Capital markets folks wondering “did we learn anything ten years ago” as they watch the increase in interest of non-QM and “non-prime” products by MLOs. (The Mortgage Elements website lists the top Non-QM wholesale and correspondent lenders for each state and the country: Just click on the Non QM symbol, choose a state, and click go.) M&A and name changes are expected to continue (the latest example comes from North Carolina where...(read more)

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    Created: 5/23/2019 6:09:16 AM
  • Posted To: MND NewsWire

    The Urban Institute (UI) is urging the Consumer Financial Protection Bureau (CFPB) to rethink its plans for Home Mortgage Disclosure Act (HMDA) reporting. The HMDA, passed in 1975, requires many financial institutions to maintain, report, and publicly disclose loan-level information about mortgages. According to CFPB, the data "help show whether lenders are serving the housing needs of their communities; they give public officials information that helps them make decisions and policies; and they shed light on lending patterns that could be discriminatory." In an article on the UI Urban Wire blog, researchers Laurie Goodman and Ellen Seidman say the HMDA data is the nation's most complete record of mortgage origination activity. It helps industry experts and researchers gauge market activity...(read more)

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    Created: 5/23/2019 5:16:36 AM
  • Posted To: MND NewsWire

    If you stuffed the old certificates in your sock drawer ten years ago, it may be time to dig them out. Mark Calabria, the new director of the Federal Housing Finance Agency (FHFA) says Fannie Mae and Freddie Mac common stock might be worth something after all. Bloomberg reports that Calabria told an audience in New York on Monday that the two government sponsored enterprises (GSEs), which have paid billions of dollars in dividends to the U.S. Treasury in return for massive loans at the start of the housing crisis, may be allowed to hold some capital instead of sweeping it each quarter into the government coffers. At present (and only a recent change) the GSEs, which were placed in federal conservatorship in 2008, have been allowed to retain a buffer to protect against a business downturn but...(read more)

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    Created: 5/23/2019 5:11:32 AM
  • Posted To: MBS Commentary

    Last we checked, it was going to be October before Brexit had its next hard deadline. So it was quite the back burner sort of market mover this week--especially in light of all the recent trade-related drama and other domestic political sideshows. But then this happened . US Treasuries love to react to "stuff" that happens in London. Old habits die hard, I suppose. Then again, London still is a major international financial center and Brexit would certainly affect trade in Europe (and thus, economic growth potential). A Theresa May ouster makes a hard Brexit more likely, and thus all the other bond friendly stuff just mentioned. Of course the ouster hasn't happened yet, nor has the hard Brexit, so markets merely moved into position for new possibilities today. That meant some...(read more)

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    Created: 5/22/2019 2:11:40 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher at a pace that was probably quicker than the average homebuyer would like yesterday . That was part of a 4 day move leading back up from the lowest levels in more than a year (or close to them, depending on the lender). That 4-day move could have easily been quite a bit longer, and it still could be, as long as we overlook today's market movement. Thankfully, it's taken rates back in a friendlier direction. At issue is the unexpected flare-up in British politics surrounding Theresa May's referendum gambit yesterday. To be fair, the gambit was unexpected, but the flare-up makes perfect sense. Long-story short, if May is ousted (and that seems likely), it creates uncertainty surrounding a major economy and financial center. It also makes a "no-deal" Brexit more likely...(read more)

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    Created: 5/22/2019 1:53:00 PM
  • Posted To: MBS Commentary

    In the day just past, bonds continued moving higher in yield, adding distance between themselves and the unexpectedly low levels seen during the trade war rally. Actually, I'll stop myself there because if I were to read what I just wrote, I might yell at the screen a bit. Reason being: it's sort of stupid to say "unexpectedly low levels." We shouldn't ever really EXPECT bond market levels to be in any particular place. They will go wherever they're going to go, and that's exactly where we should expect them to be. As soon as too many traders start expecting bonds to do one thing, they become vulnerable to a move in the other direction. So let's just say the timing and the pace of the bond market rally in the first few weeks of May ran counter to prevailing...(read more)

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    Created: 5/22/2019 6:18:47 AM
  • Posted To: Pipeline Press

    What’s going on behind the scenes and in the rumor mill at the MBA’s Secondary Conference? There is derision about HUD’s Ben Carson not knowing what There is derision about HUD’s Ben Carson not knowing what “ REO ” stands for. Holders of mortgage assets like banks and credit unions are very concerned with CECL , and their actions and pricing moves will transfer to non-bank lenders – most of whom have never heard of these accounting changes coming at us. CoreLogic and the Department of Justice sparring . In the MI biz, lots of talk about how the volume & market share of only two - Genworth and Essent - “coincidentally” rose at the same time as the three major wholesalers were ramping up their volume and market share. How, with the big...(read more)

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    Created: 5/22/2019 5:18:42 AM
  • Posted To: MND NewsWire

    While calling the recent report on real gross domestic product (GDP) the strongest first quarter in four years, Fannie Mae's Economic and Strategic Research (ESR) group agreed with Freddie Mac's economist that the 3.2 percent reported growth is unsustainable. Report details showed deceleration in both household and business spending growth compared to the fourth quarter. Half of the headline growth was due to increases in net exports and business inventories they said, and the growth in upcoming quarters should be closer to the previous trend of 1.8 percent as fiscal policy impacts fade, with government spending no longer boosting growth in the second half of the year. Despite the first quarter results they expect growth for the year to be only one-tenth point higher than earlier projections...(read more)

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    Created: 5/22/2019 5:11:53 AM
  • Posted To: MND NewsWire

    Refinancing rose to the surface yet again, driving the gain in mortgage applications during the week ended May 17. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 2.4 percent on a seasonally adjusted basis from one week earlier and was 2.0 percent higher before seasonal adjustment. The increase was solely due to an 8.0 percent surge in the Refinance Index. The share of applications that were for refinancing also increased, jumping from 37.9 percent during the week ended May 10 to 40.5 percent. The volume of purchase mortgages declined for the second straight week. The seasonally adjusted Purchase Index decreased 2 percent from the previous week while the unadjusted version lost 3.0 percent. The latter was still 7.0 percent higher...(read more)

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    Created: 5/22/2019 5:04:07 AM
  • Posted To: MBS Commentary

    Bonds have been threatening to end their pleasantly surprising stint of gains over the past few weeks on each of the past 4 business days. Yesterday's weakness was technically enough to start packing up the party supplies, but an isolated day of trend breakage is always more meaningful when it brings a friend. Today was the friend--only in our case, it's the friend of an enemy . In other words, today's moderate bond market weakness confirms the breakout of the stronger trend that had been intact during the previous 2 weeks. The losses can't be traced to any singular event although we can see that most of the weakness occurred during European hours overnight. News of a potential Brexit re-vote added to the mid-day weakness and actually prompted bond yields to hit their highs...(read more)

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    Created: 5/21/2019 2:11:02 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates had a fairly decent day yesterday as far as most lenders are concerned. A few lenders saw fit to bump rates up in the afternoon following a day of weakness in the bond market (which directly affects the rates lenders can offer). Because a majority of lenders did NOT make that mid-day adjustment, they were always likely to do so with today's first rate sheets--especially if bonds didn't improve overnight. Not only did bonds not improve today, but they weakened a bit more. This made lenders' decisions easy. With that, the average conventional 30yr fixed quote moved back up to levels last seen on May 9th and 10th. In outright terms, some loan scenarios will be an eighth of a percentage point higher in rate while others will merely be looking at a reasonably big bump in closing costs...(read more)

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    Created: 5/21/2019 1:50:00 PM
  • Posted To: MND NewsWire

    This one might smart a bit. There were big hopes for home sales in April, with interest rates continuing at unexpectedly low levels, unemployment at a 50-year low, and the spring market supposedly in full swing. Analysts polled by Econoday expected that the existing home sales number would jump from the annual rate of 5.210 million sales in March to a consensus of 5.350 million, with some forecasting as high as a 5.400 million rate. Instead, the National Association of Realtors® said existing home sales ticked down even further, adding to the 4.9 percent month-over-month decline in March. Pre-owned single-family homes, townhomes, condominiums, and cooperative apartments sold at a seasonally adjusted annual rate of 5.19 million in April, down 0.4 percent from March. The year-over-year gap...(read more)

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    Created: 5/21/2019 1:48:31 PM
  • Posted To: MND NewsWire

    With interest rates remaining at 2019 lows and spring market home sales kicking in, the rate of prepayments continues to rise. Black Knight, in its "first look" at April mortgage performance data, says the rate is up 17.54 percent from March and 17.65 percent year over year. Over the last three months the prepayment rate has increased by an aggregate of 67 percent. The rate in April was 0.99 percent. The delinquency rate fell by 5.05 percent compared to March and is down 5.41 percent from April 2018. At 3.47 percent of all mortgages in the country, the rate is the lowest in Black Knight's records dated back to 2000. Loans that were at least 30 days past due but not in foreclosure fell by 91,000 to 1.812 million in April. This was 73,000 fewer delinquencies than a year earlier. Serious delinquencies...(read more)

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    Created: 5/21/2019 7:46:04 AM
  • Posted To: Pipeline Press

    What’s the banter, and in the unverified rumor mill, at the MBA’s Secondary Conference? Fannie, Freddie, and FHA are all concerned about being adversely selected against by lenders, and F&F are rumored to be ending pilot programs under FHFA direction. Regarding the QM Patch (expiring 1/10/21), industry insiders are working toward fixing the Ability to Repay Rule, in which case we wouldn’t need the Patch. Every FHA & VA lender should read Ginnie’s report from Friday as that organization is evaluating non-bank issuers. Lots of rumors about Freedom Mortgage purchasing RoundPoint Mortgage Servicing. Many lenders had good Aprils, profit-wise, and wholesale “pricing wars” are subsiding somewhat, but innovation in that sector continuing to push retail and...(read more)

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    Created: 5/21/2019 6:33:11 AM
  • Posted To: MBS Commentary

    In the day just past, bonds weakened moderately amid the lightest volume in more than 3 weeks and a relative absence of market moving data/events. The losses are somewhat logical in the sense that momentum measurements have increasingly suggested this month's rally momentum was looking tired, not to mention the fact that friendly headlines and events have died down rapidly (i.e. no more daily doses of US/China trade war surprises). Even if we wanted to say that Huawei news or speculation about the trade war's effect on companies like Apple were still market movers this week, the impacts there have primarily been an issue for the stock market. Bonds generally shrugged off a rather steep drop in stocks yesterday and then bounced to the weakest levels of the day simply because stocks stopped...(read more)

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    Created: 5/21/2019 6:31:54 AM
  • Posted To: MBS Commentary

    Both stocks and bonds have been edging back into less panicked territory after trade war drama fizzled out last week. In other words, stock prices and bond yields were moving higher together. To be fair, bonds got one last rally push from Italy/EU drama mid-week (stocks didn't care as much about that one). Either way, by the end of last week the worst of the "risk-off" momentum appeared to be over and momentum looked to be shifting back in the other direction. Overnight weakness in equities markets threatened to push bond yields back down and create a green day for rates as opposed to modest weakness implied by the recent trend. But stocks were only ever looking panicked in the overnight and early morning hours. As soon as the 9:30am NYSE session got underway, stocks found their...(read more)

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    Created: 5/20/2019 3:25:25 PM