MBS Morning: Range-Finding With 2 Weeks Until Fed Day

Posted To: MBS Commentary

Today has the dubious distinction of being exactly 2 weeks before the Fed announcement (the one that's likely to contain the official tapering announcement). While tapering seems like a bad thing for rates, the timing is important. The most relevant precedent (2013/2014) suggests that anticipation of tapering is actually what hurts the bond market while tapering itself coincides with rates topping out and beginning to decline. The only question for now is whether the bond market approaches Fed day in a sideways range or in an upwardly-sloped trend channel. There's more of a case to be made for the trend channel recently (in fact, that's really the only takeaway in the chart below). A strong ceiling bounce near current levels could change the outlook, but bonds would need to rally…(read more)

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Source: Mortgage News Daily

MLO, AE Jobs; Sales, Retention, Recruiting Tools; Processing Changes; Fannie and Freddie Appraisal Tweak

Posted To: Pipeline Press

Someone here in San Diego asked an audience, “Who out there misses their Blackberry?” and many raised their hands. Technology… an interesting thing. How about the ability to look at this “Star Wars House” in Florida: $11.5 million, not even on the water, but page down a few times in the photos . Many of the technology changes announced or advanced here in San Diego are focused on reducing the friction between application and funding. Part of that is the appraisal process , and acting director of the Federal Housing Finance Agency Sandra Thompson announced a change: allowing banks and mortgage lenders to use desktop appraisals in lieu of in-person home valuations . (The change makes permanent a measure that Fannie and Freddie instituted during the pandemic.) In…(read more)

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Source: Mortgage News Daily

New Home Purchase Applications Fall as Construction Costs Rise

Posted To: MND NewsWire

The volume of applications for mortgages to purchase newly constructed homes plunged in September, falling 16.2 percent from the September 2020 level according to the Mortgage Bankers Association’s (MBA’s) Builder Application Survey (BAS.) Compared to August the volume of applications was down 4.0 percent. These changes are not seasonally adjusted. Based on the volume of applications and on assumptions regarding market coverage and other data, MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 843,000 units in September, a 3.5 percent decline from the August pace of 874,000 units. On an unadjusted basis, an estimated 66,000 newly constructed homes were sold during the month, down 7.0 percent from the estimate of 71,000 sales in August. “New home…(read more)

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Source: Mortgage News Daily

Mortgage Application Volume Declines For Fourth Consecutive Week

Posted To: MND NewsWire

Mortgage application volume fell sharply last week, the second decline of more than 6 percent in the past three weeks. Refinancing was down for the fourth straight week and the volume of purchase applications fell as well. The Mortgage Bankers Association (MBA) said its Market Composite Index, which measures volume, was down 6.3 percent on a seasonally adjusted basis from one week earlier and 6.0 percent before adjustment. Refinancing led the way down. That index retreated by 7 percent from the previous week’s level and was 22 percent lower than the same week one year ago. Refinancing still dominated the market, although that share of applications decreased to 63.3 percent of total applications from 63.9 percent the previous week. The Purchase Index was 5 percent lower week-over-week on both…(read more)

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Source: Mortgage News Daily

MBS RECAP: The Trend is Not Your Friend

Posted To: MBS Commentary

The Trend is Not Your Friend October has been one of those unpleasant months where bonds have several reasons to weaken, few to rally, and where the market hasn't expressed any interest in departing from the logical baseline. In other words, rates are supposed to be rising right now, but they need to be careful not to rise too quickly for a variety of reasons. We're left with a slow motion train wreck of sorts. We know what's happening, and we just have to sit and watch. Could things change? Certainly. There are several reasons they might (even if not all of them are pleasant), but that's a "what if." The logical baseline is an unfriendly trend. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Housing Starts 1.555 vs 1.620m f'cast, 1.580 prev Building Permits…(read more)

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Source: Mortgage News Daily

FHFA Announces Changes to Low Income Refi Programs and Appraisal Requirements

Posted To: MND NewsWire

Both Fannie Mae and Freddie Mac (the GSEs) will be expanding their low-income refinance programs to include those making at or below 100 percent of an area’s median income (AMI). The threshold on the programs is currently at 80 percent of AMI. Sandra L. Thompson, acting director of the Federal Housing Finance Agency (FHFA) announced the change in her keynote address to the Mortgage Bankers Associations annual conference on Monday. Her agency, in monitoring the effects of the pandemic on different borrowers, found that, while many borrowers have taken advantage of the record low interest rates to refinance their mortgage, some population groups are at risk of being left behind. “We know through our long experience, including the Great Recession, that for those struggling with a mortgage, a meaningful…(read more)

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Source: Mortgage News Daily

Construction Numbers Fall Back from August Levels

Posted To: MND NewsWire

Both permits and housing starts fell in September following an unanticipated increase the previous month. Where the August gains were driven primarily by strong multifamily construction activity, a decline in that sector hurt the September metrics. Permitting was especially weak, with the lowest seasonally adjusted annual rate since September 2020’s nearly identical number. Permits were issued at a rate of 1.589 million compared to a revised rate of 1.721 million in August, a decline of 7.7 percent. The August permits were originally reported at a rate of 1.728 million. As noted, there was no change from a year earlier. The forecasts for permits from analysts polled by Econoday all exceeded the reported number, ranging from 1.620 million to 1.725 million units. The consensus from both Econoday…(read more)

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Source: Mortgage News Daily

Call Center, LO Jobs; Post-Closing, Broker CRM, Correspondent Products; Conference Snippets; Weak Housing Numbers

Posted To: Pipeline Press

The MBA’s conference, which began with a capacity crowd at mPower , is packed with meetings and sessions, and I am sure glad that I’m not going between them in heels! (To paraphrase a joke about how, Fred Astaire was a great dancer, but Ginger did all those moves in heels and backwards.) Sure the Fed will start to taper (it’s been expected for months), and other investors will step in, but there may be periods of less investor interest. Put another way, the NY Fed’s trading desk is like clockwork with its consistent near-daily buying; private investors aren’t like that. Fed will do what it can to suppress any of the symptoms of the “taper tantrum” from 2013 (yes, it’s been eight years!) Other topics revolve around technology. My cat Myrtle is “chipped…(read more)

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Source: Mortgage News Daily

MBS Morning: The Shift Continues, Even If You Can't See It

Posted To: MBS Commentary

It's an interesting time for rates because the market collectively knows where it should be going (i.e. toward even higher rates), yet seems to be dragging its feet in getting there. That's not to say rates aren't higher in the past few weeks, but 10yr yields continue to avoid a decisive break above the high yields seen on Friday the 8th. What about other Treasury maturities though? A quick glance at the 30yr and 5yr helps bring everything into focus. Translation: 5yr yields are doing a half of a point worse than 30yr yields in the past 5 months (in fact, these are the highest 5yr yields since before the pandemic). What's up with that? 5s are uniquely positioned to suffer in this environment. They're long-term enough to share some concerns with 10s and 30s, but short-term…(read more)

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Source: Mortgage News Daily