MBS RECAP: More Defensive But Not Without Hope

Posted To: MBS Commentary

More Defensive But Not Without Hope 2 weeks ago, a heavy slate of supply contributed to small-scale panic in the bond market. Tensions eased last week and technical ceilings were confirmed. With another slate of Treasury supply kicking off on Tuesday, we're on the lookout for last week's linear, positive trend to face some resistance. If we don't see any, it would speak volumes to market's comfort level in a narrow range near all-time lows. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Market Movement Recap 08:29 AM Initially flat overnight before following European yields higher at 3am. Bonds calmed down a bit heading into domestic hours, but both Treasuries and MBS are slightly weaker now. Stocks are up almost a percent to new record highs…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Bonds Carving Out a Low Range With No Concern Over Stocks

Posted To: MBS Commentary

Last week did a nice job of confirming a ceiling in Treasury yields after the previous week saw rates move sharply higher. At the same time the S&P hit a new record high and covid numbers continued to level off. Now at the start of the current week we have more upbeat covid-related news (FDA approved plasma treatment), another surge to new all-time highs in stocks, and a bond market that doesn't appear particularly concerned with either. What's going on here? Why are bonds willing and able to make these nice, linear gains over the past week without regard for the things that strongly suggest they do the opposite? The first and most basic explanation that comes to mind is that of ' technicals .' This has come up quite a bit recently in the context of yield spike 2 weeks ago…(read more)

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Source: Mortgage News Daily

Finance, AE, Ops, LO Jobs; Customer Service, Income Tools; Agency Updates

Posted To: Pipeline Press

Winter is coming. I don’t need a new coat to walk from my bedroom through the kitchen and into the dining room to work on this commentary. Who is buying neckties or new dress shoes, or spending money renting cars, going to a theater, or having something dry cleaned? The sales volume of many things is tepid at best although online shopping and technology expenditures are solid. But how can I expect to keep my computer secure when even putting my key into my front door lock creates sounds that lock pickers can use to recreate a key to my house? (Thieves would be wasting their time here unless they wanted T-shirts and mouse pads from long extinct mortgage companies and my dwindling supply of hotel shampoo and soap.) I’ll get to the point: there are some simple things that everyone…(read more)

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Source: Mortgage News Daily

Best Housing Market Since 2007, But There's a Catch

Posted To: Mortgage Rate Watch

Several new reports confirm the housing market is soaring right now, but the headlines don’t tell the whole story. On Friday, the National Association of Realtors (NAR) reported July’s existing home sales came in at an annual pace of 5.86 million homes. This crushed forecasts calling for 5.38 million, and demolished last month’s reading of 4.70 million. To top it all off, we haven’t seen a higher number since 2007! Great news, right? Actually, yes , this is great news. The home sales market is doing every bit as well as anyone could hope for given the circumstances. But visual takeaway on the chart is misleading . Our eyes might see the blue line at the highest levels since 2007 and conclude the housing market is as strong as it’s been since then. In a way, it is. July’s home sales were indeed…(read more)

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Source: Mortgage News Daily

MBS RECAP: A Week of Reassurance For The Bond Market

Posted To: MBS Commentary

A Week of Reassurance For The Bond Market Last week saw the first major break higher after a calm, sustained moved toward lower rates that began in mid-June. This week had a chance to confirm the drama or push back against it. Thankfully, it was the latter, even though the mortgage market had some of its own specific drama to cope with. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Markit Composite PMI 54.7 vs 50.3 prev Services PMI 54.8 vs 51.0 f'cast Manufacturing PMI 53.6 vs 51.9 f'cast Existing Home Sales 5.86m vs 5.38m f'cast , 4.70m prev Market Movement Recap 08:28 AM Bonds were modestly stronger overnight in a move that lines up very well with outflows in the stock market. 10yr yields are down 2.75bps at .625 and 2.0 UMBS are up 3 ticks…(read more)

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Source: Mortgage News Daily

Late-Stage Delinquencies are Surging, Especially Those With FHA Loans

Posted To: MND NewsWire

Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Mortgage Bankers Association shows the effects of the COVID-19 pandemic fading a bit in early delinquency numbers but surging within the more serious non-current categories. The overall rate of loans 30 or more days past due increased during the second quarter to a seasonally adjusted 8.22 percent of all outstanding one-to-four-unit mortgages. This was up 386 basis points (bps) from the first quarter of the year and 369 bps year-over-year. MBA includes loans in forbearance in its delinquency numbers. Looking at delinquencies by bucket shows a slight decline, 33 bps among loans 30-days or more past due to a 2.34 percent rate, reflecting fewer loans becoming delinquent. Loans 60 to 90 days…(read more)

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Source: Mortgage News Daily

Existing Home Sales are Booming

Posted To: MND NewsWire

Existing-home sales posted a second month of significant sales gains in July, building on a record 20.7 percent increase in June. The National Association of Realtors ® (NAR) said sales were at a seasonally adjusted 5.86 million units, a 24.7 percent month-over-month increase from 4.72 million and overturning the June record for monthly gains. Sales are now higher than the previous year by 8.7 percent. Each of the four major regions attained double-digit, month-over-month increases, while the Northeast was the only region to show a year-over-year decline. The record-setting pace was greater than what were some outsized predictions. Analysts polled by Econoday had projected sales to fall in a range of 4.60 to 5.75 million. The consensus was 5.4 million. “The housing market is well past the…(read more)

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Source: Mortgage News Daily

Forbearances are Leveling Out, With Long-Term Delinquencies now a Concern

Posted To: MND NewsWire

The financial impacts of the COVID-19 pandemic are beginning to emerge and while it appears the crisis initially hit homeowners hard, the duration of the problem is murky. Short term delinquencies are declining, with fewer homeowners entering forbearance, while serious delinquencies are rising . We summarize the results from Black Knight’s most recent weekly forbearance report and its “first look” at July loan performance below and will report on the Mortgage Bankers Associations National Delinquency Survey for the 2nd quarter later today. Black Knight says overall delinquencies continued to improve in July, declining by 9 percent from June to a rate of 6.91 percent with 342,000 fewer loans past due. However, the delinquency rate is double that of July 2019, and 1.885 million more homeowners…(read more)

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Source: Mortgage News Daily

MSR, Conversion, EPO Products; Public Company Snapshots; LO and UW Jobs

Posted To: Pipeline Press

RCIII writes, “I don’t know about you, but I’m ready for some precedented times.” But Tom Petty wrote, “Well, the good old days, may not return… And the rocks might melt, and the sea may burn.” Let’s hope that doesn’t happen, aside from the occasional volcano, as there are plenty of other volatile, unpredictable human-related events occurring around the world. (You’ll notice that I didn’t quote Tom’s “Don’t do me like that!”) So, let’s end this opening paragraph, and traditional workweek, with something fun. I don’t know where I was last week, or how to even track errant socks coming out of the dryer, but here’s a cool map of tracking an eagle’s path over twenty years , racking…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Now We're Getting Somewhere

Posted To: MBS Commentary

Coronavirus obviously ushered in an era of record low rates. The ongoing challenges and uncertainties are fairly well understood. They have a wide spectrum of possible outcomes. As far as we can see at the moment, the baseline outcome involves permanent job losses on a large enough scale to imply a broad shift in economic output. In turn, that shift implies that rates could remain low for a long time or even move lower. That's one of the possibilities, at least. It's the basic bullish case for rates going forward and it's easy to defend–perhaps too easy. In these situations where broad themes seem relatively logical and probable, financial markets have a knack for moving in a counterintuitive way. It might sound like I'm warning you about a counterintuitive move toward higher…(read more)

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Source: Mortgage News Daily