Home Purchase Sentiment Rebounds to Near Record Highs

Posted To: MND NewsWire

After a steep dive in October, America’s attitude toward buying a home is on the rise again. Positive answers to the question of whether it is a good time to buy on Fannie Mae’s November National Housing Survey rose 11 percentage points to a net of 32 percent, 9 points higher than in November 2018 and its highest point since March 2018. That answer helped drive the Home Purchase Sentiment Index (HPSI) up 2.7 points to 91.5. The index had declined the two previous months but is now up 5.3 points year-over-year and is close to returning to the all time high of 93.8 set in August. The HPSI is constructed from responses to six questions included in Fannie Mae’s monthly National Housing Survey (NHS). Half of the six index components moved higher in November. Also pushing the overall index higher…(read more)

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Source: Mortgage News Daily

Automation, Marketing Tools; Shift in Evaluating Credit

Posted To: Pipeline Press

If you knew the value of the house was going to decline, or that the borrower has bad credit and would default, would you make the loan? There’s always a debate about how best to determine creditworthiness based on past behavior (more on that below), but regarding housing prices, last month Arch MI released its quarterly Housing and Mortgage Market Review HaMMR ) report and proprietary risk index showing the top cities across the U.S. where it’s actually more affordable to buy than rent. While we all know it’s expensive to buy in cities like San Jose and Los Angeles, you may be surprised to learn than Syracuse, NY is the #1 city to buy a house (and 30% cheaper than renting ). The top five cities where it’s cheaper to buy vs rent are Syracuse, NY; Rochester, NY; Worcester…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Still Waiting on Bigger Potential Market Movers

Posted To: MBS Commentary

In the grand scheme of things, today will likely be another placeholder of a day unless some unexpected (and fairly significant) trade war update happens to come out. That leaves the afternoon's 10yr auction as the only moderately capable market mover, and even then, we wouldn't want to hold our breath for Treasury auctions to move markets. Being, as we are, in "wait and see" mode, I'd rather take this morning to reflect on a phenomenon from the recent past. Raise your hand if you thought I was a bit crazy to claim "NFP doesn't matter" ahead of last Friday's blowout jobs report, and then if you thought I was even crazier to double down on that claim after stocks and bonds quickly began to respond to the stellar numbers. (My own hand is about halfway up…(read more)

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Source: Mortgage News Daily

Mortgage Rates Snap Back to Lower Levels

Posted To: Mortgage Rate Watch

Mortgage rates reacted somewhat harshly to an incredibly strong jobs report last Friday. At the time, I noted that such a jobs report would typically have done much more damage to rates, but that the current environment mitigates its impact for a few reasons. First off, labor market strength is taken for granted to some extent, because it’s been consistently good for about as long as it’s even been consistently good! Just as important is the fact that trade war fears are dominating the market’s focus. Depending on the outcome of trade negotiations, market watchers expect a fairly wide spectrum of market outcomes. Still, the jobs report has a more consistent track record of causing big market movement than any other piece of economic data. There will always be some obligatory response to a report…(read more)

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Source: Mortgage News Daily

FHA's Mortgage Insurance Fund Improvement Has Come a Long Way

Posted To: MND NewsWire

The Federal Housing Administration (FHA) released its annual Report to Congress several weeks ago, reporting significant improvement in its Mutual Mortgage Insurance (MMI) Fund. Late last week Brian D. Montgomery, FHA Commission and Assistant Secretary of the Department of Housing and Urban Development (HUD), testified regarding the report to a hearing of the House Financial Services Committee. Montgomery said the MMI’s capital ratio increased to 4.84 percent in the 2019 fiscal year (FY2019) from 2.76 percent in FY2018, well above the 2.00 percent statutory minimum. Additionally, MMI Capital was $62.38 billion, an increase of more than $27.52 billion from FY 2018, and perhaps the highest ever. While attributing a significant portion of the improvement both to the fund and FHA’s financial position…(read more)

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Source: Mortgage News Daily

Lots of Refinancing, So Why Are Servicers Losing Business?

Posted To: MND NewsWire

Black Knight continues to review, in its new Mortgage Monitor , how the effects of nearly a year of lower interest rates have ricocheted throughout the industry. This month’s Monitor looks both at loan data from October and from the third quarter of 2019. Prepayments are still running at record high levels , increasing by what the company called “an eye-popping” 132 percent compared to the same time last year. The single month mortality (SMM) rate increased by double digit percentages for every one of the last 15 vintages of loans during September and October with some of the largest gains among loans originated during the housing bubble of 2005 to 2007. By product type, those loans guaranteed through GNMA (VA, FHA, USDA) once again had the highest payoff rate although they increased in October…(read more)

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Source: Mortgage News Daily

Investor and Lender FHA & VA Changes; Marketing and Cloud Products

Posted To: Pipeline Press

With the Fed content with rates hovering here for the foreseeable future , lenders can focus on other things. “Rob, are you hearing that real estate agents are nervous about Zillow’s business moves?” Of course. There are a lot of people who wonder why real estate agents, according to some, are funding their own demise. But Zillow’s stockholders benefit, right?! There is chatter about a Zillow program, started in Phoenix, where buying leads on Zillow goes away with 9 days’ notice and Zillow will demand a 35% referral fee from any buyer an agent closes that comes from Zillow for the next 2 years. And there are rumors of this going nationwide in 2020. Face it: Zillow is a fierce competitor that has dominated advertisers like Google. Industry analysts will suggest that real estate agents need to…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Last Serious Trading Week of 2019

Posted To: MBS Commentary

It's been almost exactly 3 months since the quick rate spike in early September. That, of course, followed an impressive run to the lowest rates in more than 3 years in August. The combination of those long-term lows and the quick bounce set the stage for a consolidation trend that's been intact ever since. That's not to say that yields haven't traveled outside those levels, but not in a meaningful, sustained way. Even then, we could simply say that yields haven't ventured back into the previous range since breaking into the current range in August. The dividing line is roughly 1.96% in terms of 10yr yields. If we approach the range in horizontal terms, the week begins with rates almost perfectly centered in the most recent section of the range. It's possible that the…(read more)

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Source: Mortgage News Daily

MBS RECAP: NFP Swings For Fences, But Still Comes Up Short

Posted To: MBS Commentary

This morning's commentary was titled "NFP Doesn't Matter (Even If It Looks Like It Does)." Apparently NFP didn't like being called out because it did everything in its power to prove me wrong. Ultimately though, it would need to create momentum that lasts beyond today in order to join the ranks of jobs reports that have been this much stronger than expected. As it stands, it wasn't able to create momentum that lasted more than 5 minutes. Those 5 minutes were fairly brutal however. By 8:35am, 10yr yields had launched from 1.79-ish to nearly 1.86%. They stayed in that range for more than an hour, but for those of us drinking the "NFP doesn't matter" kool-aid, the writing was already on the wall. Here it was: an obligatory knee-jerk reaction to a massively…(read more)

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Source: Mortgage News Daily

A Jobs Report This Strong Usually Does Much More Damage to Mortgage Rates

Posted To: Mortgage Rate Watch

Mortgage rates were pushed higher for the 3rd day in a row following an incredibly strong jobs report. For decades, if you were to ask anyone with a reasonable level of experience following rates/bonds to pick one economic report that bonds care about more than all others, the jobs report would basically be the only answer. There isn’t even a close second. In fact, as far as economic data goes, the jobs report is still at the top of the heap. That said, it’s typical impact has been lessened for two reasons. First off, ALL economic data is being taken with a grain of salt because traders assume things will change in some unforeseeable way after the US/China trade negotiations run their course. Additionally, the jobs market has simply been very strong for a very long time , so unless it begins…(read more)

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Source: Mortgage News Daily