MBS Day Ahead: Market of Two Minds After Ho-Hum Jobs Report

Posted To: MBS Commentary

The reaction has been back-and-forth in a very narrow range, but with very typical volume for NFP (in other words, traders are clearly trading… they're just conflicted). Why the conflict? Sure, at 559k vs 650k f'cast, the number was weaker than expected, but it was nonetheless a big step up from last month's 278k. By the time we consider seasonal distortions, the data is actually fairly strong. MBA Chief Economist Mike Fratantoni shared a good observation about the NSA (not seasonally adjusted) numbers, saying "in both April and May, the monthly NSA increase was closer to 1 million. The seasonal adjustment is likely significantly complicated by the huge swings in employment over the past year. The NSA changes may be reflecting stronger underlying growth than the headline…(read more)

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Source: Mortgage News Daily

1st Quarter Mortgage Profits Just Broke a 2008 Record

Posted To: MND NewsWire

It wasn’t a complete record setter, but mortgage bankers still established a few same quarter and other new highs as they kicked off the year with another profitable quarter. The first quarter 2021 Mortgage Bankers Performance Report from the Mortgage Bankers Association (MBA) shows a net gain of $3,361 on each loan originated by independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks. This was down from their reported profit of $3,738 per loan in the fourth quarter of last year. Combining both production and servicing operations, 97 percent of firms posted overall profitability during the quarter compared to 95 percent in Q4. “Despite dropping slightly from the fourth quarter of 2020, net production profits reached their highest level for any first quarter since the…(read more)

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Source: Mortgage News Daily

Mortgage Rate Volatility Risks Increase Tomorrow

Posted To: Mortgage Rate Watch

Mortgage rates were higher again today with multiple lenders making additional upward adjustments in the middle of the day in response to bond market volatility. The prices/yields of certain bonds are the primary building blocks for lenders as they determine where to set mortgage rates every day. Bonds respond to a variety of inputs, with the broad notion of “the economy” being one of the perennial favorites. Traders track changes in the economic outlook via various reports that are released at regular intervals. Of those reports, not one is remotely on the same stage as the Employment Situation (or simply “the jobs report”). It’s due out tomorrow at 8:30am ET. At the risk of stating the obvious, if the payroll count is much higher than expected, interest rates are more likely to see upward…(read more)

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Source: Mortgage News Daily

Underwriter, MLO, Relationship Mgr. Jobs; Sales, Pricing, Processing Tools; VA and FHA Changes

Posted To: Pipeline Press

Here’s your pro tip of the day: occasionally blow on the wine in your coffee mug to convince the rest of the Zoom meeting that it is tea. Speaking of the working world, are you an “office worker” or, as Amazon tells its warehouse employees, an “ industrial athlete ” and to prepare one’s body for that experience is like someone training for a sporting event? Don’t pull a hammy logging onto the Ginnie site. It’s been four and a half months since Joe Biden was sworn in as the 46th president and there are still no picks to head FHA and Ginnie Mae. The Mortgage Bankers Associations latest survey tells that that, among its sample of retail lenders, the FHA share of total applications is nearly at 10 percent and the VA share of total applications is…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Vague Threats From Jobs Data, But Bonds Want The Real Thing

Posted To: MBS Commentary

A clear theme has emerged this morning. The day's early jobs-related reports have all come out noticeably stronger (technically Challenger Layoffs increased, but 24k is still extraordinarily low). This implies a bit of a warning shot for tomorrow's big jobs report (yes, we realize that today's jobless claims numbers don't actually align with the NFP survey week, but a labor trend is a labor trend, and folks are clearly getting back to work). While bonds have reacted somewhat to this warning shot, they aren't panicking. The takeaway is that they're ready to react to labor market data, but they're waiting to see the star of that show: tomorrow's NFP number. In the bigger picture, this morning's modest volatility quickly gets lost in the shuffle. MBS Pricing…(read more)

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Source: Mortgage News Daily

Census Report Itemizes New Home Features

Posted To: MND NewsWire

The U.S. Census Bureau has released pieces of its 2020 report, Characteristics of New Housing. This is a massive annual compilation of data on what builders are building and, hopefully, what buyers have been or will be buying. The browsable microdata will not be released for a while – typically it comes out in August – but here are some of what the Bureau considers highlights of the new report. There were 912,000 single-family homes completed in 2020 with a median size of 2,261 square feet. All but 42,000 had air conditioning. Ninety thousand of those homes contained two bedroom or fewer while 29,000 had a maximum of 1.5 bathrooms. Homes with four bedrooms or more totaled 401,000 and 309,000 had at least three bathrooms. Wood frame construction still predominates ; 831,000 were built in the…(read more)

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Source: Mortgage News Daily

Mortgage Rates Treading Water, Waiting For Motivation

Posted To: Mortgage Rate Watch

In week-over-week terms, mortgage rates are modestly higher this afternoon compared to last Wednesday. In the slightly bigger picture, however, rates are best thought of as being flat since leveling off in late April after spending most of the month falling from longer-term highs. In other words, we made it through the first big post-covid rate spike in the beginning of 2021 and now we’re waiting to see where the next big bout of momentum takes us. Generally speaking, if the incoming economic data is much stronger than expected, the next move in rates is more likely to be “up.” That’s a very basic principle for rate watchers to understand and things rarely end up playing out in such a tidy and logical way. In the current case, not only would data need to be stronger than expected, but it would…(read more)

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Source: Mortgage News Daily

MBS RECAP: Sideways and Still Waiting on Friday's Jobs Report

Posted To: MBS Commentary

Sideways and Still Waiting on Friday's Jobs Report Today's trading lived up to the sideways promises discussed this morning. And yes, while it is terribly cliche, "sideways ahead of the jobs report" is indeed actually the best way to view the week's trading so far. 10yr yields were less than 1bp lower by the 3pm CME close and 2.5 UMBS coupons were perfectly unchanged. On a slightly bullish note, 10yr yields found support at 1.62%, but we should have no doubts about the fragility of that ceiling in the event of a super strong payrolls print on Friday. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:29 AM Bonds recover slightly in low overnight volume and light volatility. 1.62% technical level offered a supportive ceiling and 10yr yields are…(read more)

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Source: Mortgage News Daily

Is Commute Time Becoming a Housing Factor?

Posted To: MND NewsWire

While many workers plan, at least according to recent surveys, to continue spending at least part of each week working from home, a shorter commute still seems to be holding increasing appeal. The National Association of Home Builders (NAHB ) says its first quarter Home Building Geography Index (HBGI) indicates not only a pandemic driven shift in construction to low density, low cost markets, but a rapid expansion in areas with the shortest commutes. Litic Murali, writing in NAHB’s Eye on Housing blog, says workplaces are moving toward hybrid home/office work models which could affect 30 to 40 percent of the American workforce. This will give renters and buyers increased market power over their travel times and the ability to reduce both housing and transportation costs. The nationwide average…(read more)

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Source: Mortgage News Daily

GSE Scramble to Comply with FHFA, CFPB Changes

Posted To: MND NewsWire

Fannie Mae and Freddie Mac (the GSEs) are trying to sort out ways to implement several major changes imposed on them from outside sources. Freddie Mac recently issued updates to its Seller/Servicing Guide to comply with the Revised General Qualified Mortgage Rule announced by the Consumer Financial Protection Agency (CFPB). This rule was promulgated to replace the so-called GSE Patch which is due to expire soon. The complete of Seller/Servicer Guide changes are available here . However, Freddie Mac reminds lenders that, while CFPB has delayed implementation of its Revised Rule until October 1, 2022, most loans originated under the GSE Patch will not be eligible for sale to Freddie Mac if they have application dates on or after July 1, 2021 or settlement dates after August 31, 2021 unless they…(read more)

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Source: Mortgage News Daily