MBS RECAP: Solid Afternoon Bounce, But Context Matters

Posted To: MBS Commentary

Solid Afternoon Bounce, But Context Matters There's surely some great analogy to be made about perspective (filed under the "everything's relative" category). Bonds rallied quite nicely today with 10yr yields have their best domestic trading session since before the last Fed announcement. MBS didn't do quite as well, but we wouldn't expect them to given the shape of the yield curve (shorter duration bonds not doing as well as longer-duration bonds). But (wait for it…) everything's relative! 10yr yields at 1.64% are only good news compared to the past 2 days. If you missed those 2 days, then today isn't so much a "nice rally" as a confirmation that rates are at their highest levels since April. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm…(read more)

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Source: Mortgage News Daily

Highest Rates Since April, But There's a Catch

Posted To: Mortgage Rate Watch

Over the past 30 days, interest rates have risen sharply . This is true for both mortgage rates and bond market benchmarks like 10yr Treasury yields. But another version of the 10yr Treasury yield continues to operate near all-time lows . How can rates simultaneously be rising quickly but still near all-time lows? Inflation! As we discussed last week, inflation erodes the value of bonds. As such, bond yields frequently move in response to changes in inflation expectations (higher inflation = higher rates). That correlation is easily seen in the following chart: Obviously, something changed in 2020. But what changed specifically for bonds and inflation? For starters, the Federal Reserve immediately began buying massive amounts of bonds shortly after the pandemic began. This acted to keep yields…(read more)

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Source: Mortgage News Daily

Delinquencies Continue to Decline but Forbearances Still a Concern

Posted To: MND NewsWire

The national delinquency rate has fallen below 4.0 percent for the first time since COVID-19 started messing up the world. Black Knight, in its “first look” at September’s mortgage performance data, says the rate in September, 3.91 percent, represents a reduction of more than 41 percent from September of 2020 and is 2.25 percent below the August level. Delinquencies have moved lower in 14 of the last 17 months. There were 2.068 million loans that were 30 or more days past due in September, not including loans in foreclosure. This is down 54,000 from the prior month and 1.474 million fewer past due loans than the prior September. Black Knight says there would have been fewer delinquencies in September if not for Hurricane Ida which hit Louisiana especially hard. There was an increase of 7,800…(read more)

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Source: Mortgage News Daily

MLO Jobs; BI, HELOC, Joint Venture, Sales Tools; Bank Market Share Study; Upcoming Events; Jumbo News

Posted To: Pipeline Press

Semper Fi! Tomorrow marks the 38th anniversary of the 1983 bombing in Beirut of a U.S. Marine barracks in the largest conventional explosive blast in history killing 241 Americans. San Diego has a huge military presence, and while there I spent a few hours with the folks at PenFed discussing trends in jumbo lending and the overall market for the near future and for 2022. In the very near future, Halloween is only nine days away! Dating back 2,000 years to the Celtic festival of Samhain, Halloween has evolved into a celebration characterized by child-friendly activities like dressing in costumes, trick-or-treating and carving pumpkin. The U.S. Census Bureau estimates 73.1 million children under the age of 18 that are potential trick-or-treaters… and future home financers. Which of these…(read more)

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Source: Mortgage News Daily

MBS Morning: Have Bonds Sold Off Enough to Catch a Break?

Posted To: MBS Commentary

To buy the dip or not to buy the dip (in bond prices). That is the question faced by traders today as 10yr yields hit the 1.70% technical level in after hours trading yesterday. This potential technical support coincides with the upper boundary of the ongoing trend channel. The day begins with a decent bounce from that level, but we should probably avoid getting too excited about it just yet. Bonds have bigger things to think about than modest technical bounces at long-term highs. While that sort of bounce can inform decent short-term momentum, the overall trend will continue to be dictated by big-ticket items like covid, inflation, Fed rate hike expectations, and curve trading (all of which are intertwined to a large extent). The case count narrative is well known: Inflation expectations haven't…(read more)

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Source: Mortgage News Daily

Big Jump in Home Sales–Impressive Considering The Lack of Supply

Posted To: MND NewsWire

Existing home sales resumed an upward trajectory in September after dipping 2.0 percent in August. The National Association of Realtors® (NAR) said sales of pre-owned single-family houses, townhouses, condominiums, and cooperative apartments rose 7.0 percent in September, although this still left them 2.3 percent behind the pace in September 2020. Sales were at a seasonally adjusted annual level of 6 .29 million units, compared to 5.88 million the previous month and 6.44 million a year earlier. Analysts polled by both Econoday and Trading Economics had expected sales to rise but undershot with consensus estimates of 6.03 million and 6.09 million units, respectively. The rate of single-family home sales rose by 400,000 month-over-month, a 7.7 percent increase , to a seasonally adjusted annual…(read more)

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Source: Mortgage News Daily

MBS RECAP: Fear of The I-Word

Posted To: MBS Commentary

Fear of The I-Word Today's 5yr TIPS auction met with heavy demand for inflation protection. While that didn't move markets at the time, it nonetheless underscores the heavy inflation concern driving traders to flatten the yield curve and move up estimated Fed rate hike timing. Indeed, Fed Funds Futures are now pricing in the first hike by June 2022. MBS underperformed 10yr yields, but kept better pace with 5yr Treasuries. Data had no impact as the market traded largely on momentum, technicals, and deal-related tradeflows (i.e. corporate bond issuance). Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Jobless Claims …. 290k vs 300k f'cast Philly Fed ………… 23.8 vs 25.0 f'cast Existing Sales 6.29m vs 6.09m f'cast Leading Indicators …0.2 vs 0.4 f'cast Market…(read more)

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Source: Mortgage News Daily

Recruiting, MLO Jobs; Processing, Automation, Pricing, MSR Sales, Non-Agency Products; Vendors to Watch

Posted To: Pipeline Press

Thousands of people in the residential lending biz headed to the San Diego aerodrome and flew home. Plenty were sore from wearing dress shoes everywhere, although I saw plenty of gals in flip flops while in transit. Guys are happy to stop wearing ties. Masks at the airport sure cuts down on recognizing someone you may have met with the day before. What’s the chatter? Efficiency and cost cutting, the subject of this month’s STRATMOR blog . At the MBA event the vendors were out in force. Vying for the coolest name is Digital Silence , a firm focused on information security research and consulting services. There was the digital loan closing specialist Stavvy party. Househappy allows your client to take care of all their home project needs with a simple phone call or click. And a company…(read more)

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Source: Mortgage News Daily

MBS Morning: The Trend is Not Your Friend

Posted To: MBS Commentary

Considering yields have pushed to new long-term highs on 3 out of the past 3 days, it's safe to say that bonds are "trending" as opposed to flat/sideways. Covid cases are down sharply week-over-week. Econ data continues to be decent enough. And there are no signs that the Fed will forego a tapering announcement on November 3rd. This trend is not your friend. All we can do is stay defensive and wait for clear confirmation that bonds are turning a corner. For now, we're lucky that yields haven't attempted to break up and out of the rising rate channel we've been tracking. It's important, and potentially interesting to clarify what "rising rates" means. The main point of distinction is between nominal yields and "real" yields (those that have been…(read more)

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Source: Mortgage News Daily

MBS RECAP: Sideways to Slightly Weaker After Another Long-Term High

Posted To: MBS Commentary

Sideways to Slightly Weaker After Another Long-Term High 10yr yields hit a 5-month high early in the overnight session and then managed to claw their way back to modestly stronger levels by the start of domestic trading. Amid a dearth of data and actionable headlines, bonds were left to "trade it out." That seemed to go fairly well at first, but yields adjusted back toward the highs of the day after the 20yr bond auction at 1pm ET. Perhaps the more relevant detail is that 10yr yields were never able to make it below 1.62%, even at their best. 1.62% had been a ceiling 3 days ago before becoming a floor yesterday afternoon. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:39 AM Weaker to start the overnight session with yields hitting multi-month highs of…(read more)

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Source: Mortgage News Daily