Pending Home Sales Post 5th Straight Loss

Posted To: MND NewsWire

January marked the fifth straight month that the National Association of Realtors® (NAR) has reported a decline in its Pending Home Sales Index (PHSI). The index, based on newly signed contracts for the purchase of existing homes, was down 2.8 percent from its December level. The index in January was at 122.8 compared to 125.5 in December and has lost 10 points since August. Still, pending sales were up 13 percent compared to a year earlier. This January’s PHSI was, in fact, the highest for any January on record. Analysts had expected the index to be flat but individual estimates by those polled by Econoday all overshot the actual results. They covered a range from a 1.5 percent downturn to 0.5 percent growth. The consensus was for zero change. “Pending home sales fell in January because…(read more)

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Source: Mortgage News Daily

Ops, MLO Jobs; Cap. Mkts., Valuation, Default, Fulfillment Tools; Technology and Processing Notes

Posted To: Pipeline Press

As hope for a recovery drawing nearer helps push rates higher, Carol K. writes, “I hate it when people ask me what I do for fun because there is no classy way to say, ‘Binge drink.’” The approaching 1003 form mandatory changes may cause some people to turn to drink… Is it going to “March Madness” at your shop with the new URLA? (The commentary has plenty of URLA and processing notes below.) Plenty of lenders who are “farther along technology curves” than others seem to be hiring lots of developers to accommodate change like incorporating a new application. But AEs and MLOs need to be aware of and use digital tools that they already have. DU and LP, for example, are great tools and in nearly every lender. Heck, I hear a lot about senior…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Just When You Thought It Wouldn't Get Much Worse

Posted To: MBS Commentary

It got much worse. Bond yields were up more than 8bps by the open with the 10yr just a hair under 1.47%. It might be hard for traders to avoid ringing the 1.50% bell even if bonds manage to bounce today or in the next few days. The kicker is that the weakness lacks the sort of discrete, obvious headline/data motivations that make for satisfying levels of understanding. It continues to be a move driven by big-picture momentum, short-term stop-loss triggers, technicals, asset manager reallocations, month-end trading, convexity hedging, and other esoteric, behind-the-scenes factors. From a purely technical perspective, the additional weakness was a risk based on the breakout of the longstanding trend channel last week (yellow lines below). The risk now is that traders will aggressively try to…(read more)

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Source: Mortgage News Daily

Highest Mortgage Rates Since June 2020

Posted To: Mortgage Rate Watch

As of today, you’d have to go back to June 2020 to see higher mortgage rates. This is courtesy of an ongoing move in the bond market that has longer-term rates/yields surging higher at the quickest pace since the pandemic began. The broader bond market has actually been signalling this sort of move since late last summer, but it wasn’t an issue for mortgage rates for a variety of reasons. Now that the mortgage market has mostly exhausted its protective cushion against broader bond market volatility, when the broader bond market has a bad day, so do we. It goes without saying that today was bad. Just look at the scoreboard , after all. But it also tried to be good. Bonds battled back from their worst levels quite well by the early afternoon. This was especially true for mortgage-backed bonds…(read more)

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Source: Mortgage News Daily

MBS RECAP: Is It Another Trap and Which Coupon Do I Watch Now?

Posted To: MBS Commentary

Is It Another Trap and Which Coupon Do I Watch Now? Yesterday's bond market resilience offered hope for a bounce, but those hopes were crushed by new weakness this morning. The move took MBS to their worst levels since last March and Treasuries, since February 2020. Bonds recovered mid-day, begging the question: is this another trap? Do we just get crushed again tomorrow? Today's video discusses those prospects as well as the reasons for the shift to 2.5 UMBS 30yr fixed coupons. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm New Home Sales 923k va 855k f'cast, 885k prev 5yr auction: weak. 0.7bps higher than expected. Bid to cover 2.24 vs 2.45 avg Market Movement Recap 08:53 AM modestly stronger in Asia, moderately weaker in Europe, and now sharply weaker as the domestic session…(read more)

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Source: Mortgage News Daily

New Home Sales on the Rise 4.3% in January

Posted To: MND NewsWire

New home sales continued the turnaround, started in December, that ended three straight months of slowing sales. The U.S. Census Bureau and Department of Housing and Urban Development said newly constructed homes were sold in January at a seasonally adjusted annual rate of 923,000 units. This is an increase of 4.3 percent compared to the upwardly revised (from 842,000) rate of 885,000 in December and 19.3 percent above the estimate of 774,000 units in January 2020. Analysts polled by Econoday had projected sales to be flat compared to the December estimate, in a range of 809,000 to 905,000 units. Their consensus was 855,000 annualized sales. Robert Dietz, chief economist for the National Association of Home Builders, said “Housing affordability headwinds are rising for 2021, due to supply-side…(read more)

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Source: Mortgage News Daily

Delinquency Rate Lowest in COVID Era; but Lingering Risks Remain

Posted To: MND NewsWire

Loan performance continued to improve in January although the number of delinquencies remains significantly elevated from pre-pandemic levels. Black Knight’s first look at the month’s loan performance data has both good news and some that is disquieting. The good news is a 121,000-loan decline in the number of loans that are 30 or more days past due but not in foreclosure when compared to the prior month. This reduced the national delinquency rate to 5.85 percent, the first time the rate has been under 6 percent since the pandemic hit in March 2020. The number of seriously delinquent loans, those 90 or more days past due but not in foreclosure, was reduced by 56,000 loans. Black Knight includes loans that are in active forbearance plans in its delinquency numbers if they are non-current. However…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: It Was a Trap… Don't Expect Stocks to Save Us

Posted To: MBS Commentary

Yesterday saw yields hold at just slightly lower highs on an intraday basis, thus offering a glimmer of hope for a bond bounce. We discussed the risk that this was a trap, and so far today, it looks like it was. 10yr yields are over 1.4% and UMBS 2.5 coupons are now the only game in town. Where is that giant squid guy from Star Wars when you need him? The bond market weakness is sharper and more relentless than many market watchers anticipated. One common topic of conversation among those hoping for a bounce is the interplay between stocks and bonds. Late 2018 is fresh in our minds with widespread belief that "high rates" precipitated a stock sell-off which, in turn, helped rates move lower. I won't say "that's not what happened," because that dynamic was in play…(read more)

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Source: Mortgage News Daily

MLO Jobs; Servicing, Customer Service, Decisioning, Retention Tools; Events and Training This Week

Posted To: Pipeline Press

There’s a cost to staying at home as much as we do. I went to the doctor the other day. She told me, “I’ve got good news and bad news. The good news is that your weight is perfect. The bad news is that you’re two feet too short.” What is the cost of you keeping a customer versus the cost of finding a new one? According to STRATMOR data, the average time to close a refinance loan is currently around 60 days, with many lenders (depository institutions in particular) experiencing cycle times in the 90 to 110-day range. How are originators supposed to delight borrowers when cycle times are out of control? It starts with setting the right expectations. Data from MortgageSAT, the Borrower Satisfaction Program with more than 260,000 borrower respondents in 2020 , shows…(read more)

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Source: Mortgage News Daily

Mortgage Application Volume Continues Decline

Posted To: MND NewsWire

The volume of mortgage applications for both home purchase and refinancing fell for the third straight time during the week ended February 19. The Mortgage Bankers Association (MBA) says its Market Composite Index, a measure of that volume, dropped 11.4 percent on a seasonally adjusted basis. It was the largest single week decline since the week ended April 3, 2020. On an unadjusted basis the index was down 10.0 percent. The Refinancing Index decreased 11 percent from the previous week but was still 50 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 68.5 percent of total applications from 69.3 percent the previous week. The seasonally adjusted Purchase Index dropped 12 percent and was 8 percent lower before adjustment. Activity was 7 percent…(read more)

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Source: Mortgage News Daily