MBS Week Ahead: Fed, Q2 GDP, And More

Posted To: MBS Commentary

As far as weeks with plenty of potentially relevant scheduled events on tap, this one does not disappoint. The only question is how much markets will care about anything other than major coronavirus developments. Fed Meeting Wednesday The Federal Reserve's Open Market Committee (FOMC) will meet on Tue/Wed, culminating in the 2pm release of a new policy announcement on Wednesday. There's not much we can imagine the Fed could say that we haven't already heard and very little risk of any chances to existing policy measures. To be sure, there's zero chance of a change to the Fed Funds Rate and effectively no chance of a change to the only other thing we really care about: the Fed's bond buying program. That means it's up to Powell's press conference to offer up digestible…(read more)

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Source: Mortgage News Daily

How Low Can Rates Eventually Go?

Posted To: Mortgage Rate Watch

The bond market saw yet another week with rates in a holding pattern at historic lows. With coronavirus being the primary motivation for rates, it wouldn’t be a surprise to see indecision continue until we get a clearer idea of how things will shake out with respect to the pandemic vs the global economy. In fact, apart from the all-time low mortgage rates, things have been downright boring when it comes to the underlying bond market driving those rates. Absent a vaccine-related breakthrough, there’s not much for the bond market to do besides hurry up and wait. After all, even if there is amazing news about a vaccine trial, that’s only worth a smaller-scale, shorter-term bump for markets until the stuff actually makes it into widespread circulation and proves its worth. Between now and then…(read more)

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Source: Mortgage News Daily

MBS RECAP: Why The Range Risk in Treasuries Matters to Mortgages

Posted To: MBS Commentary

Why The Range Risk in Treasuries Matters to Mortgages We've been following .58% in 10yr yields for months as the best candidate for the bottom of "the range." Now that mortgage rates have largely settled relative to Treasuries, the .58% floor, until and unless we see yields move below .58% and remain in stronger territory, it suggests bonds and mortgage rates may take some time to consolidate or even correct toward slightly higher levels before doing whatever they're going to do next. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) New Home Sales: 776k vs 700k f'cast , 682k prev Market Movement Recap 08:18 AM Stocks and bond yields initially moved lower overnight, but reversed course in Europe. Stocks are still slightly weaker, but bonds…(read more)

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Source: Mortgage News Daily

New Home Sales Explode Back to Pre-Pandemic Levels

Posted To: MND NewsWire

New Home sales have done it again, rising for the third straight month. The U.S. Census Bureau and Department of Housing and Urban Development estimate that newly constructed single-family homes were sold at a seasonally adjusted annual rate of 776,000 units. This is a 13.8 percent increase over the May rate, which was revised higher, from 676,000 units to 682,000. Sales are now greater than the same month in 2019 for the first time since the pandemic struck, up 6.9 percent compared to June of last year. They also topped the 774,000 units reported in January 2020, said to be a 13-year high. Sales were higher than even the most optimistic projection by analysts polled by Econoday . Their forecasts ranged from a 648,000-unit annualized rate to 720,000. The consensus was 700,000. On an unadjusted…(read more)

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Source: Mortgage News Daily

HUD Eliminates Obama Era Fair Housing Rule

Posted To: MND NewsWire

It had been threatened from the beginning of the Trump administration, but this week the hammer fell. U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson has announced the formal termination of the Obama Administration’s Affirmatively Furthering Fair Housing (AFFH) regulation issued in 2015 . In a press release Carson called the regulation “complicated, costly, and ineffective.” Under the rule, any community receiving HUD money was required to analyze its housing occupancy by race, disability, familial status, economic status, English proficiency, and other categories and analyze any factors that present barriers to housing. It then must then formulate a plan to eliminate those barriers which must be approved or disapproved by HUD. This must be done every five years…(read more)

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Source: Mortgage News Daily

Regional manager, AE, LO Jobs; Automation, Credit, AI Tools; Up to Speed on Tax Transcripts

Posted To: Pipeline Press

I don’t know if there is going to be a pro football season or not, with lines of scrimmage & heavy breathing 11 inches apart for hundreds of linemen every week, but here’s The Onion’s take on The Best Cities To Live In For Fans Of Rock And Roll Museums and The Cleveland Browns .” Regardless of city, or population trends, our industry has hundreds of statistics thrown at us every week, including the Census Bureau telling us that there are 330 million people living in the United States . LBA Ware released summary statistics on the state of mortgage industry comp in the second quarter of 2020. As one would expect, significant refinance volume growth in Q2 2020 compared to Q2 2019 contributed to a 59% year-over-year increase in total LO commissions paid over the three…(read more)

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Source: Mortgage News Daily

Fannie/Freddie Borrowers Continue to Exit Forbearance

Posted To: MND NewsWire

Black Knight notes a slight increase in the number of forbearance plans in effect this week even as the number of forborne loans serviced for the GSEs (Fannie Mae and Freddie Mac) dropped sharply. The total number ticked up to 4.119 million, a 2,000-loan increase from the prior week. The total is 7.8 percent of the 53 million active mortgage loans and represents an unpaid principal of $890 billion. The GSE loans in forbearance dropped by 18,000 during the week, largely offsetting increases in portfolio/private label securitized (PLS) loans and those serviced for Ginnie Mae (FHA and VA loans). Those loans rose by up 12,000 and 8,000, respectively. There are now 1.625 million GSE loans in forbearance, 5.8 percent of that total portfolio. The unpaid balance of those loans is $341 billion. After…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Why The Range Risk in Treasuries Matters to Mortgages

Posted To: MBS Commentary

There was a time in the very recent past when we could almost completely ignore the implications of 10yr Treasury yield movement on mortgage rates. While this was definitely a break from the historical norm, it wasn't a completely foreign exercise given the massive divergences seen at times in the past. Those divergences resulted from big news and big changes to MBS valuation considerations, whether it was the mortgage meltdown or the Fed stepping in with the mortgage-specific QE3 purchases. Most recently, it was the mortgage-specific impacts from coronavirus. Simply put, while the US government's ability to make payments on Treasuries was at no risk of changing, the cash flows back to MBS investors from pools of underlying mortgages were at serious risk. As such, mortgage rates spiked…(read more)

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Source: Mortgage News Daily

Forbearance Penalties Are Making Things Harder for Low-FICO, First-time Borrowers

Posted To: MND NewsWire

The Urban Institute (UI) is speculating that a new penalty imposed on loan originators and arising out of the COVID-19 forbearance plans is beginning to significantly tighten the credit box. A paper written by analysts Laurie Goodman and Michael Neal says that mortgages are considerably more difficult to get than they were four months ago, and this is disproportionally affecting first-time, Black, and Hispanic homebuyers. The Federal Housing Administration (FHA) and the GSEs Fannie Mae and Freddie Mac have all imposed a penalty on lenders whose loans go into forbearance before they are delivered to Ginnie Mae, the agency that securitizes FHA and VA loans, or the GSEs. Ginnie Mae and the GSEs insure or guarantee more than 70 percent of the outstanding mortgages in the United States. Fannie Mae…(read more)

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Source: Mortgage News Daily

Underwriting, Forbearance, One-time Close, Marketing Tools; Loan Processing Changes

Posted To: Pipeline Press

Loan officers are known for “holding the hand” of their borrowers. Now Google would like to hold the other. With the help of the CFPB, and launched yesterday, searching “mortgage” in Google on one’s phone will lead to Google explaining what a mortgage is, terms to know, recent rates, what one can expect to pay, and more. Probably not shown is the flip side of the coin. For example, 30 day delinquencies increased to 6.1% of all mortgages during the month of April, according to CoreLogic . This is up 2.5% from April 2019. “The COVID-19 pandemic has shocked our economic system and led to unprecedented job loss, reducing the ability of affected families to make their monthly mortgage payments. The latest forecast from the CoreLogic Home Price Index shows prices…(read more)

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Source: Mortgage News Daily