Best Efforts Trading, DPA Options, Marketing, Dashboard, Online App Tools; Correspondent and Wholesale Products

“The only time I get asked for sex is on application forms.” Ba-dum-ching! Speaking of applications, most lenders will agree that the loan officer should be the first point of contact for a home buyer, not the real estate agent. But over the years real estate agents have done a great job of becoming the starting point of a homebuyer’s quest. But heck, how much house can they afford, what with current rates, homeowner’s insurance, utilities, etc.? Yes, good originators know the psychology of their clients under the “Know your borrower” basic tenant, especially first time home buyers: most homebuyers remain homeowners and the FHFA tells us that the persistence has increased over time across all homeowner demographics like race or ethnicity, regions of the country, and mortgage lending submarkets. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with attorney Peter Idziak on last week’s Supreme Court vote to overturn the Chevron doctrine that called on judges to rule in favor of government agencies in instances where the law is ambiguous, and its impact on the mortgage industry.) Lender and Broker Software, Services, and Products Curious about what’s new in Encompass® by ICE Mortgage Technology®? ICE recently shared an article which dives into new innovations within the platform that are enabling the lending community to improve both productivity and efficiency. Read the full article here.
Source: Mortgage News Daily

Another Sideways Start Meets Another Light Calendar

The most recent sideways slide began just before noon last Friday.  Bonds had rallied in response to the jobs report with 10’s closing at 4.29%.  Since then, there hasn’t been more than 4bps of movement in either direction, and the range has been even narrower 95% of the time.  Part of the reason is the absence of new inspiration.  Since the jobs report, there haven’t been any massively actionable economic reports or calendar events.  Today’s calendar is similarly light.  The 2nd day of Powell testimony is unlikely to offer any new insights and the 10yr Treasury auction–while a bit of a wild card for short term volatility–won’t impact the big picture with the all-important CPI on deck tomorrow morning.
Source: Mortgage News Daily

Higher Rates Suppress Mortgage Application Volume

Mortgage applications declined slightly on a seasonally adjusted basis last week but plummeted on an unadjusted basis during the July 4th week. The week’s results include an additional adjustment to account for the holiday. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, decreased 0.2 percent on a seasonally adjusted basis from one week earlier but lost 20.0 percent before adjustment.   The Refinance Index decreased 2.0 percent from the previous week but was 28.0 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 34.9 percent of total applications from the previous 35.7 percent. [refiappschart] The seasonally adjusted Purchase Index managed a 1.0 percent gain while the unadjusted Purchase Index dropped 19.0 percent.  The purchase index was 13.0 percent lower than the same week one year ago. [purchaseappschart] “The recent uptick in mortgage rates has slowed demand. Mortgage applications were essentially flat last week, as mortgage rates remained around 7 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase activity picked up slightly, driven primarily by increases in FHA and VA applications. Refinance applications decreased for the fourth consecutive week, in line with higher rates. Although home equity gains have been significant in recent years, most borrowers do not have much of an incentive to refinance at current rates. ”
Source: Mortgage News Daily

MBS Outperform. Powell Punts. Waiting on CPI

MBS Outperform. Powell Punts. Waiting on CPI

Bonds showed slightly more notable signs of life this morning when compared to yesterday, but yesterday was all but dead.  The volatility surrounded Fed Chair Powell’s congressional testimony but had more to do with what didn’t say as opposed to what he said.  Specifically, he didn’t express incremental excitement or expectation about econ data justifying a rate cut any time soon, instead leaving it up to the same old “data dependent” mantra.  Bonds had perhaps been hoping for a bit more dovishness.  Even so, trading levels returned to pre-Powell levels by the close.  10yr Treasuries logged a small increase in yield while MBS improved modestly.  Some of that is driven by the yield curve (shorter maturity Treasuries improved and MBS act more like 5s than 10s these days).  Either way, the focus is even more firmly on Thursday’s CPI as far as bond market inspiration is concerned. 

Market Movement Recap

11:47 AM Modestly weaker overnight with additional losses during Powell testimony.  Mainly an issue for Treasuries.  10yr up 4.4bps at 4.324.  MBS down 2 ticks (.06).

01:26 PM MBS roughly unchanged.  10yr up 3bps at 4.31%

03:32 PM Still sideways with modest MBS outperformance.  10yr up 1.4bps at 4.294.  MBS up 2 ticks (.06).
Source: Mortgage News Daily

Mortgage Rates Barely Budge, But That Will Change Soon

Mortgage rates are based on movement in the bond market and bonds haven’t been moving much over the past 3 days.  That’s resulted in very little change in the average mortgage rate from one day to the next, and zero change today.   Bonds can be inspired by a number of events and data points.  In the past, scheduled congressional testimony with the Fed Chair has been just such an event, but it was not a major consideration today.  Fed Chair Powell reiterated the same messages heard from multiple Fed speakers. The most basic and important message about interest rates is that they depend on economic data.  Some data is more important than other data in that regard and Thursday’s Consumer Price Index (CPI) is arguably the most important.  With that in mind, it’s not hugely surprising to see bonds and rates holding a more narrow range as they wait to see the outcome of CPI.  Some movement between now and then is certainly possibly, but after CPI comes out, movement is all but guaranteed, for better or worse.
Source: Mortgage News Daily

Cap. Mkts. Academy, Insurance, Servicing Tools; STRATMOR Ops Workshop; Webinars and Training

“Your call is important to us. Please stay on the line until it is no longer important to you.” To state the obvious, serving customers can make or break a company. Are you ever frustrated when the person ahead of you in the store is fumbling around to find their pen to write a check? After July 15, at Target Stores, no more. The post office continues to lose customers as they move to alternatives to sending a letter or a check through the mail: After increasing the price of a first-class postage stamp to 68 cents in January, the U.S. Postal Service is planning to increase the cost again, bumping the cost of a first-class Forever stamp to 73 cents on July 14, a 5 percent jump from the previous price point and 10 cents above the price at the start of 2023. The announcement about the second jump this year was made in April. Laws impact your customers, and you’ve probably seen something about the Supreme Court overturning Chevron deference (and other administrative law cases). What this means to the mortgage industry is covered in attorney Brian Levy’s most recent Mortgage Musings. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with nCino’s Casey Williams on various ways to help lenders get their back-of-the-house working more efficiently.) Lender and Broker Software, Services, and Products
Source: Mortgage News Daily

Powell Testimony And Treasury Auction Cycle

The new week is one day less new today, but no less sideways so far.  Yields rose microscopically in the overnight session, but even that is a generous assessment considering the range in the 10yr was less than 3bps.  Domestic hours are off to a sleepy start with yields in an even narrower 1bp range (essentially 4.29 to 4.30).

MBS have been a bit more willing to move with 6.0 coupons back into positive territory after a weaker start. 

The Treasury yield curve helps explain the outperformance with 2yr yields unchanged and 10yr yields up 1.5bps on the day. 

Against this boring backdrop, there’s nothing to do but wait to see if Powell has something interesting to say in the 10am congressional testimony.  Apart from that, the Treasury auction cycle is another source of potential volatility starting at 1pm, but tomorrow’s 10yr auction is far more capable than today’s 3yr auction in that regard.
Source: Mortgage News Daily

Uneventful Monday Leaves Bonds Little Changed

Uneventful Monday Leaves Bonds Little Changed

It was a quintessential summertime Monday to start the new week.  Trading volumes were exceptionally light and volatility wasn’t far behind.  Most of the movement happened right at the 8:20am CME open with Treasuries quickly repairing some incidental overnight damage.  The 9:30am NYSE open saw a quick pop and drop, but from there, it was super sideways for Treasuries and especially MBS.  Both ended the day in effectively unchanged territory vs Friday.  Uneventful days become less likely from here on out due to Treasury auctions, Powell Testimony, but most importantly, Thursday’s CPI data.

Market Movement Recap

08:48 AM Initially weaker overnight, but bouncing back in early domestic trading.  MBS up 2 ticks (.06) and 10yr down 0.4bps at 4.277

11:58 AM Off the best levels slightly.  MBS now unchanged and 10yr up half a bp at 4.287

03:27 PM Very sideways with MBS up 1 tick (0.03) and 10yr down almost 1bp at 4.273
Source: Mortgage News Daily

Mortgage Rates Gently Lower to Begin New Week

Apart from July 1st, mortgage rates have fallen every day so far this month.  The counterpoint is that only adds up to 4 business days so far.  The other counterpoint is that the improvements have been fairly modest over the past two days with the average borrower still likely to be quoted the same interest rate seen on Friday.  The average top tier conventional 30yr fixed rate remains just a hair over 7%.  If that’s to change in a meaningful way, it would likely involve this Thursday’s Consumer Price Index (CPI) data.  CPI has been the most important input for rates as far as economic reports are concerned.  Thursday’s is an exciting installment as it has a chance to confirm a promising shift seen in last month’s data. If confirmed, rates should move easily into the 6’s. Between now and then, there are other potential sources of volatility, including 2 days of Congressional testimony from Fed Chair Powell.  But CPI is ultimately a much bigger consideration than anything Powell might say.
Source: Mortgage News Daily

Social Media Compliance, Client Retention; Freddie/Fannie Changes; Square Footage Stats

During a recent password audit, it was found that a blonde was using the following password: “MickeyMinniePlutoHueyLouieDeweyDonaldGoofySacramento”. When asked why such a long password, she said she was told that it had to be at least 8 characters long and include at least one capital. What’s today? It’s “change every password you have” day. Money is the focus of a lot of evil activity on the internet (look at credit union Patelco), but what about useful, constructive monetary activities? Location, location, location. What new home buyers get for their money varies by region. The median price and square footage of new single-family homes sold in 2023, according to the Census Bureau, was $760,700 and 2,430 square feet in the Northeast, $396,300 and 2,172 square feet in the Midwest, $388,800 and 2,335 square feet in the South, and $536,200 and 2,170 square feet in the West. (Today’s podcast is found here and this week’s is sponsored by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender, uniting the people, systems, and stages of the mortgage process. Hear an interview with Candor’s Mark Hinshaw on expectation versus reality when it comes to AI in the mortgage industry.) Lender and Broker Software, Services, and Products With high interest rates keeping more people in their homes, new revenue opportunities will come from places that don’t fit the typical servicer playbook. ICE has identified four key areas where technology can help set servicers up for success in today’s low-movement housing market. Explore how you can retain customers, capitalize on your existing portfolio, and streamline your back office in ICE’s complimentary new white paper, Technology helps servicers find opportunities in unusual places.
Source: Mortgage News Daily