MBS RECAP: Strong 10yr Auction Reinforces Friendly Trend

Posted To: MBS Commentary

Strong 10yr Auction Reinforces Friendly Trend Bonds charged into the domestic session making surprisingly swift gains amid a relative absence of justification. We talked more about that in the AM commentary. The key event since then has been much easier to identify. Yields clearly moved higher in anticipation of the 1pm 10yr Treasury auction, and immediately adjusted lower after the strong results. While it wasn't enough to get us back to the day's best levels, simply holding a 4-5bp gain on the day is a big victory in technical terms. MBS didn't do quite as well but are nonetheless near their best levels in months. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 09:11 AM Stronger overnight with Europe. More technical triggers and short-covering snowballs…(read more)

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Source: Mortgage News Daily

Rates Move Lower Again as Bond Demand Stays Strong

Posted To: Mortgage Rate Watch

The bond market is the main ingredient that lenders use to determine lending rates. The mortgage market is no exception . In fact, mortgages have specific bonds that dictate the prices of loans that sold between investors on the secondary market. Those prices let lenders know where to set their mortgage rates on any given day. There’s a longstanding belief that the 10yr Treasury yield guides mortgage rates as well. While that’s not exactly the case, longer-dated Treasuries (think 5, 7, 10yr) tend to move in relative lock-step with the rates implied by mortgage-backed bonds. As such, when “things” happen that help longer-dated Treasuries, mortgages tend to benefit as well, even if the timing and magnitude can vary. That’s exactly what happened . A scheduled 10yr Treasury auction showed very…(read more)

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Source: Mortgage News Daily

Title, Recruiting, MLO Jobs; Email, Training, AI, Lead, AMC Products; Wholesaler News; Rates Continue to Slide

Posted To: Pipeline Press

I hope that Google never shuts down. I know six, maybe seven, things. I know that the President’s plane was delayed seven hours this morning due to cicadas. Another thing I know is that Freddie spelled out its graduated cap on non-owner and 2 nd homes. I also know that rumors are now swirling that Fannie has sent out letters to selected lenders either cutting them off from selling Fannie these products or scaling them back dramatically. I know that guarantees can be problematic but a great way to garner headlines. Lenders offer products, price, and service, and it is hard to guarantee the industry to be #1 in one category, and nearly impossible to be #1 in two of those categories for any length of time. But guarantees have popped up recently in the wholesale channel, most recently from…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Bonds Staying Surprisingly Bullish… Why?

Posted To: MBS Commentary

In the past 48 hours, bonds have entered into one of those interesting rally patterns marked by a striking absence of conventional motivations. That is to say, unless we consider these gains to be some sort of "follow-through" from last week's jobs report, there's no other economic data or news headline clearly behind the move. That forces us to move on to more speculative explanations. The usual suspects at times like this include short-covering , technical triggers, and repositioning ahead of tomorrow's ECB announcement (and even next week's Fed announcement). While it's true we could lean on the notion of the economic data failing to reach "scary strong" levels, that would require wearing blinders around a few of the recent reports. It probably makes…(read more)

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Source: Mortgage News Daily

Mortgage Application Volume Declined on Holiday-Shortened Week

Posted To: MND NewsWire

Mortgage application activity slowed further during the week ended June 4, a short business week due to Monday’s Memorial Day holiday. The impact of the holiday was magnified in annual comparisons because it occurred a week earlier in 2020. The Mortgage Bankers Association said its Market Composite Index, a measure of mortgage application volume, decreased 3.1 percent on a seasonally adjusted basis compared to the prior week and was down 13 percent on an unadjusted basis. The Refinance Index decreased 5 percent from the previous week and was 27 percent lower than the same week one year ago. Refinancing made up 60.4 percent of application activity during the week. The share the previous week was 61.3 percent. The seasonally adjusted Purchase Index ticked up 0.3 percent from one week earlier…(read more)

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Source: Mortgage News Daily

“RefiNow” Presents Opportunities, For Some

Posted To: Community Commentary

Fannie Mae announced a new refinance program “RefiNow”, effective June 5th , designed to provide greater loan flexibilities for low income borrowers, particularly those unable to refinance during 2020’s historically low interest rate environment. Here’s a link to that announcement . There’s been a LOT of advance hype about the program: how many homeowners it will help; how much they’ll save; etc, but as always, the devil is in the details. Let’s look at RefiNow’s pros and cons! Pro: RefiNow allows debt-to-income ratios of up to 65%, well above Fannie’s limit of 50% on other programs. Con: Borrowers obtaining RefiNow loans must have income under 80% of the Area Median Income (AMI). What’s the AMI where you live? You can look it up here…(read more)

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Source: Mortgage News Daily

Lowest Rates in Nearly 2 Weeks

Posted To: Mortgage Rate Watch

Mortgage rates haven’t been in the habit of making epic swings recently. That’s not a bad thing considering they continue to operate in very low territory in historical terms. For the average lender, today brought one of the bigger recent examples of improvement. In the best cases, borrowers may be seeing a rate quote that is an eighth of a percent lower versus the highs from the end of last week (Thursday afternoon or Friday morning, depending on the lender), but most would simply realize the improvement in the form of lower upfront costs or a higher lender credit. Purchase loans continue carrying the best rates. Expect to see rates move up at least an eighth of a point for a refinances , and more still for cash-out refinances. That all assumes an owner-occupied primary residence. Due to recent…(read more)

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Source: Mortgage News Daily

Early State Delinquencies Drop Below Pre-COVID Levels

Posted To: MND NewsWire

The nation’s mortgage delinquency rate is inching closer to its pre-pandemic level as early stage delinquencies improve. CoreLogic says that in March of this year 4.9 percent of all mortgages were 30 days or more past due, including loans in foreclosure. This is the lowest rate since March 2021, the month the pandemic hit, and the rate was 3.6 percent. The company notes that “March 2021 marked a critical juncture in the U.S. – the one-year anniversary of the onset of the pandemic, the third round and disbursement of government stimulus checks and the extension of forbearance programs. Taken together, some of these factors helped mortgage holders stay current on their loans and led to the lowest national delinquency rate in a year. “Additionally, the convergence of these financial paddings allowed…(read more)

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Source: Mortgage News Daily

LO, Processing Jobs; Correspondent, Presentation, Pre-qual Tools; PenFed/TIAA Deal and Other Correspondent News

Posted To: Pipeline Press

After years of opening mail I’ve come to the conclusion that, when stamped on an envelope in the U.S. mail, “personal and confidential” usually isn’t, and “time sensitive” isn’t either. Yes, it’s only Tuesday , and there continues to be discussion about the housing market, the lack of homes for sale given the lack of building over the last several years, and the 70 million or so millennials wanting a place to call their own. Yup, millennials are changing the mortgage and home buying market . Millennial homebuyers are waiting longer to buy a first home than previous generations, perhaps grappling with the effects of the Great Recession and rising student debt. Sure millennials have been slower to buy their first homes than older generations but…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Short Squeeze Helping Bonds Push Boundaries

Posted To: MBS Commentary

A short squeeze occurs when bond yields fall to levels that force short sellers to cover their positions ( read more here , if that didn't make sense), and it's one of the key reasons that bonds occasionally rally in the absence of other justification. This morning has seen just such a short squeeze, which is especially notable on the approach to a Treasury auction cycle. That said, today brings the 3yr auction and 3yr notes are not rallying nearly as much as 10yr notes (which will be auctioned tomorrow). As such, we may have seen the extent of today's rally right at the open (i.e. traders may be increasingly cautious on 10's as the auction approaches). For now though, 10's are attempting to break below the consolidation pattern that's been intact since March. The day…(read more)

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Source: Mortgage News Daily