MBS Day Ahead: Not Reading Too Much Into Things Ahead of 3.5-Day Weekend

Posted To: MBS Commentary

Treasuries started out stronger after overnight drama between China and Hong Kong caused a " risk-off " trade (i.e. sell stocks, buy bonds). MBS continue lagging Treasuries. What's up with that? The performance between MBS and Treasuries can always vary to some extent. Divergences are more easily seen in a few specific situations. One of the most common situations is an obvious risk-off rally (or "flight-to-safety," if you prefer). This type of rally benefits the most basic, most liquid, least risky bonds first and foremost. Treasuries fit that bill better than anything. None of this is a very big deal in the bigger picture. MBS are still in a process of finding their range versus Treasuries, and there has been far more drama in the past few months than we could ever…(read more)

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Source: Mortgage News Daily

LO Jobs; CRM, Marketing, Lending Products; Tools for Borrowers; Rates: a Global Snapshot

Posted To: Pipeline Press

The Friday before a three-day weekend (honoring the men and women who died while serving in the U.S. military)! Can’t you just feel that anxiousness to go and hike, to have a meal out, to see people, to sit in a restaurant? No one can argue that social distancing has increased the rate of infection, right? Many are “chomping at the bit,” weighing statements from scientists & politicians, especially as news continues to come out from people about catching COVID supposedly having never left their house . Or statistics, like as of May 17, about 91,000 lives have been lost to the coronavirus but those aged 65 or older accounted for 80 percent of these deaths , and residents or employees of long-term care facilities accounting for one third of all deaths . And so many working…(read more)

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Source: Mortgage News Daily

Mortgage Rates Are Actually Lower This Week

Posted To: Mortgage Rate Watch

Mortgage rates were mostly steady today for most lenders. Those who changed generally did so in a friendly direction. Either way, that means today’s rates remain in line with all-time lows. It also makes them markedly lower than last week. Despite that fact, you’re more likely to see news about rates rising just a bit week-over-week. Who’s telling you the truth? To be fair, no one is lying to you. It’s just a question of timing and data sources. Freddie Mac publishes a weekly rate survey every Thursday morning. It’s widely relied-upon as source material for all manner of media outlets. The issue is that it is based primarily on responses received on Monday and Tuesday. The 2nd half of the week isn’t even counted. That means Freddie’s data missed the week’s best improvement yesterday afternoon…(read more)

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Source: Mortgage News Daily

Existing Sales hit 10-Year Low, But Low Rates are a Silver Lining

Posted To: MND NewsWire

Existing home sales fell hard in April, the numbers coming in about where analysts expected them but breaking a nine-month string of annual gains. The National Association of Realtors® said total sales of single-family homes, townhouses, condos, and cooperative were at a seasonally adjusted annual rate of 4.33 million, down from the 5.27 million sold in March, a 17.8 percent decline. It was the lowest level of sales since July 2010 (3.45 million) and the largest month-over-month drop since July 2010 (-22.5 percent). The loss, which NAR said was due to the coronavirus pandemic, brings the aggregate decline over the last two months to 26.3 percent. Sales are now down 17.2 percent from the 5.23 million rate in April 2019 The rate of sales almost matched the 4.325 million-unit consensus estimate…(read more)

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Source: Mortgage News Daily

Refis Dominated April Closings as Lenders Tackle Constant Changes

Posted To: MND NewsWire

Interest rates on closed loans continued to decline in April, falling from 3.65 percent in March to 3.48 percent according to the Origination Insight Report from Ellie Mae. That prompted another surge in refinancing , with that portion of originations jumping from 55 percent in March to 65 percent. The refinancing share of conventional loans also rose 10 percentage points to 73 percent. The share of conventional loans also surged , from 76 percent to 81 percent and continuing a trend that began in January. Conventional loans accounted for 71 percent of originations that month. The April share of FHA loans dropped 3 points to 10 percent in April and the VA share dipped to 1 point to 6 percent. The time to close all loans increased from 40 to 42 days, although refinancing time lengthened by four…(read more)

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Source: Mortgage News Daily

FHFA Pushes Forward With Fannie/Freddie Conservatorship Exit

Posted To: MND NewsWire

Maybe all of the talk about ending the GSE’s long term incarceration in conservatorship is more than talk this time. Earlier this week both Freddie Mac and Fannie Mae announced they would be issuing Requests for Proposals (RFPs) seeking to hire financial advisors to that end. Then, late Wednesday, the Federal Housing Finance Agency (FHFA), the GSE conservator, said it was seeking comments on proposed revisions to its own 2018 proposal to establish a new regulator capital framework for the two companies. FHFA said the changes to its proposal “ensure each [GSE’s] safety and soundness and its ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress. The re-proposal is also a critical step toward responsibly ending the conservatorships…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Two Potential Targets For Today's Potential Bond Rally

Posted To: MBS Commentary

Treasuries held onto yesterday's gains in the overnight session and are starting the day in slightly better shape (MBS are roughly unchanged). This means that 10yr yields continue adhering to a technical pattern we've been following for the past few weeks AND that we may get to see that pattern put to the test in the day ahead. The pattern in question is one of the simplest: a trend channel consisting of parallel lines drawn along the recent highs and lows in any given market instrument. Placement of these lines is open to some degree of interpretation. For instance, in our version, I have the lines set based on opening and closing levels and some of the intraday noise has been tuned out. That doesn't mean the intraday levels are irrelevant, just that I needed/wanted lines that…(read more)

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Source: Mortgage News Daily

Recruiting, LO Jobs; Appraisal, QC Products; Loan Processing is Changing: Beeline/SnapFi

Posted To: Pipeline Press

Some lenders and vendors are easing back into offices, or at least planning voluntary phases. (Hmmm… wear a mask and have 2 per elevator, or work from home with no commute and wear sweats. Let me think.) Instead of thermal scanners in every office lobby, can’t we just have our mothers kiss our foreheads to test our temperature like when we were kids? And when we were kids, we could get away with saying, “I don’t wanna!” Apparently some still can say that when it comes to making mortgage payments, since 4.1 million borrowers are in forbearance right now but, per Forbes, over 70% don’t need the help ! The FHFA is keeping abreast of forbearance trends, and it released a notice of proposed rulemaking (NPR) outlining a new capital rule for the Enterprises (aka, Freddie…(read more)

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Source: Mortgage News Daily

Vast Majority of Forbearances Going to Those Who Don't Need Them

Posted To: MND NewsWire

With the number of homeowners under forbearance plans nearing 10 percent of all of those having a mortgage, a Lending Tree survey indicates that most of those borrowers did not actually need the help. One quarter of the homeowners surveyed by the company said they had applied for forbearance because of a COVID-19 hardship, and of those, 80 percent were granted one. However, only 5 percent said they wouldn’t have been able to pay their mortgage without forbearance. Lending Tree says that lenders typically require borrowers to prove they’re experiencing a financial hardship in order to qualify for forbearance. However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress lets homeowners with government-backed loans apply for forbearance without having to prove a hardship…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: What is MBS 'Outperformance' And Why Are We Seeing It?

Posted To: MBS Commentary

I've been mentioning MBS outperformance and underperformance quite a bit recently, but what do these terms really mean and why do we care? First off, we always care about strength and weakness in mortgage bonds as they are the primary building block in determining mortgage rates (i.e. higher MBS prices = lower rates , all other things being equal). We also care about strength and weakness in Treasuries because mortgage bonds typically correlate amazingly well with Treasuries (so much so that many mistakenly believe 10yr Treasury yields serve as a basis for mortgage rates). The type of volatility seen in March exposed a few eye-opening truths. The first was that mortgage bonds can and do deviate from 10yr yields at times. March offered the most extreme example we've seen since the financial…(read more)

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Source: Mortgage News Daily