Mortgage Rates Face More Volatility Later This Week

Posted To: Mortgage Rate Watch

Mortgage rates didn’t do much today, and that’s good enough news considering the average lender is closer to the lower end of the rate range since early October. The only counterpoint would be that there isn’t much distance between the highs and the lows during that time (not a bad thing, just a bit of context). In other words, rates are “pretty close” to the lowest levels of the past several months, but they’re also not too far from the highest levels. Rates move when the underlying bond market moves, and it’s not uncommon to see a slow start on Monday’s that lack meaningful data or headline developments (like today). Potential volatility will be increasing from here, however, with several important economic reports by Thursday morning along with the signing of the US/China phase 1 trade deal…(read more)

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Source: Mortgage News Daily

Finding a Balance Between Mortgage Availability and Default Risk

Posted To: MND NewsWire

CoreLogic is continuing its analysis of the potential impact of the January 2021 expiration of the so-called “GSE Patch.” Under the Consumer Financial Protection Bureau’s (CFPB’s) 2013 Ability-to-Repay (ATR) and Qualified Mortgage (QM) Rules, lenders must make a reasonable, good faith determination of a consumer’s ability to repay a mortgage loan based on verified financial information generally associated with responsible mortgage lending practices. In most cases, meeting QM requirements provides lenders with a safe harbor from the Rules’ legal liabilities. Lenders who fail to comply can be held liable for damages by both the CFPB and the homeowner. The Patch provides a temporary category under ATR and QM rules under which loans eligible for purchase or guarantee by the GSEs Fannie Mae and…(read more)

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Source: Mortgage News Daily

MBS Week Ahead: Limited Econ Data and Phase 1 Trade Deal Signing

Posted To: MBS Commentary

Rather than serve to accelerate or crush the negative bond market momentum building at the end of 2019, 2020 has only compounded the broader sideways trend. It hasn't been as boring as "sideways" tends to be either! Credit the Iran flare-up for most of that volatility. It was responsible for the sharp surge toward lower yields though last Tuesday and the de-escalation gets credit for the slightly less sharp return to weaker levels. Notably, there hasn't been a stampede back to the higher yields from late 2019–a fact that could reflect some lingering doubts about Middle East risks or perhaps even the implications of last week's jobs report (i.e. slower than expected growth and a big drop in average earnings). While it may seem like a bit of a stretch to pin bond market…(read more)

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Source: Mortgage News Daily

Compliance, LO Tools; Deep Dive Into W-2 vs.1099 and the SAFE Act

Posted To: Pipeline Press

Lenders, and all financial sector firms, continue to ruminate on the privacy law in California that now gives people the right to access and delete personal data companies have collected. LOs are ready and willing to delete all client information from their database, right? The law applies to any firm that has clients in the state. SIFMA provided comments on the policy, and other groups have plenty of warnings for financial firms. Pay attention, lest your state enact something similar. Susan Milazzo , the CEO of the California MBA , wrote, “T he CCPA gives consumers the right to ask businesses, that fit certain criteria, to provide them all of the personal information that business has on them and/or ask the business to delete that information.” Lender Products and Services Ready…(read more)

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Source: Mortgage News Daily

Smooth Sailing Until It's Not Anymore

Posted To: Mortgage Rate Watch

Mortgage rates had been moving higher over the past few days. The average lender was at the highest levels of the month as of yesterday morning, but things began to change shortly thereafter. Today’s market movement added to the friendly momentum after the big jobs report came out slightly weaker than expected (in general, weaker economic data is good for rates). By the end of the day, the average lender had erased yesterday’s weakness, but didn’t quite make it back to the levels seen on Monday and Tuesday. That said, I’m splitting hairs by pointing out any difference between the two. The bigger picture continues to be the more interesting point of consideration. For every rate-friendly anecdote there’s an equal and opposite counterpoint at the moment. This jives perfectly with the intensely…(read more)

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Source: Mortgage News Daily

Smaller, Smarter: How Builders are Changing Housing and Courting Millennials

Posted To: MND NewsWire

After the housing crash and as the recovery began home builders ratcheted up the size of the homes they were building because the profit margin was higher on larger homes. There was also a lot of competition at lower price points from the numbers of distressed properties for sale. Now they are not only rethinking that strategy but apparently acting to reverse it. Paul Davidson, writing in USA Today , says it is getting easier to find smaller and more affordable newly constructed homes. One builder, Alure Homes, told Davidson that homes priced under $300,000 made up about 50 percent of the company’s production last year , up from 20 to 30 percent in the previous six years. Builders have been trying to lower the costs of construction but have been fighting a lot of headwinds . The National Association…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Bonds Doubling Down on Sideways Bets

Posted To: MBS Commentary

With NFP coming out just slightly weaker than expected and the bond market not undergoing much of a reaction in either direction, the rest of the day becomes a relative non-event in the bigger picture. This is in the same vein as a much bigger anticlimactic de-escalation seen earlier this week with respect to the potential for war to break out in the Middle East. If such a thing had happened, bonds would surely have broken the lower boundary of the prevailing yield range. Since it didn't happen, here we are again… stuck in the middle. Without a war, or a major development on the US/China trade deal, the market will be forced to get back to the business of following along with economic data. That, too, is a challenge due to the lingering and uncertain impact on business confidence (and…(read more)

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Source: Mortgage News Daily

Pricing, VA Products; Agency Direction and Future Back in the News

Posted To: Pipeline Press

Markets have taken the view that brief military conflicts have little long-term impact on economic trends. Gold, oil and the Japanese yen jumped after Iranian missiles hit US bases in Iraq, but capital left “safe haven” assets (like bonds) and returned to equities when it appeared the conflict would not escalate. It didn’t take long after the holidays for Freddie and Fannie to be in the news again. What may escalate, or at least continue with many opinions being thrown our way in 2020, is chatter about Freddie Mac and Fannie Mae. As a reminder, they are able to retain capital now, a step out of being in conservatorship. And now comes news that Federal Housing Finance Agency Director Mark Calabria has suggested F&F could operate under a Federal Housing Finance Agency Director…(read more)

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Source: Mortgage News Daily

MBS RECAP: Something For Everyone Today

Posted To: MBS Commentary

Do you like it when MBS outperform? How about when they underperform? Are you a fan of bond market gains? Or do you prefer losses? Would you like to see rates making a case for a ceiling bounce? Or is it more meaningful if they're bouncing on a floor? If you answered yes to any of the questions above, you're in luck! ALL OF THAT happened today! After surviving the overnight session in unchanged territory, bond began to weaken as domestic traders got active for the day. At that time, MBS were clearly outperforming , which is no surprise given the modest weakness in Treasuries. But bond selling was met with a solid show of support at an intermediate technical ceiling of 1.90%. The ground-holding in Treasuries fueled ongoing outperformance in MBS (mortgages like weaker Treasuries, but…(read more)

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Source: Mortgage News Daily

Mortgage Rates Bounce Higher

Posted To: Mortgage Rate Watch

Mortgage rates moved higher more definitively today after as lenders had a chance to match their offerings to underlying bond markets. Markets themselves were already pointing to this move yesterday, but the lender response was still somewhat mixed in the afternoon hours. More simply put, mortgage rates are based on the trading levels of mortgage-backed bonds. The bonds move first and then mortgage lenders follow by adjusting the rates they’re offering to consumers. The adjustment typically happens at least once when the lender publishes rates for the first time on any given day. From there, markets need to move by a certain amount in order for lenders to realize any benefit to making a mid-day adjustment. Many lenders did that yesterday, but with trading levels getting even worse before this…(read more)

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Source: Mortgage News Daily