MBS RECAP: Things Are Getting Ugly For Bonds

Posted To: MBS Commentary

Selling Spree Continues; MBS Underperforming Earlier in the day, Treasuries looked to be selling off at a slower pace versus the past few trading sessions. After sharp spikes in yields, this is the kind of pattern we tend to see before bonds find some support and undergo a friendly correction. But just after the 9:30am NYSE open, Treasury yields hit more new long-term highs, thus re-setting our vigilant search for support. To make matters worse, MBS underperformed (i.e. they had an even worse day than Treasuries) with both UMBS 1.5 and 2.0 coupons losing nearly 3/8ths of a point by the close. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Market Movement Recap 08:34 AM Treasuries were slightly stronger during the first part of the overnight session. After…(read more)

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Source: Mortgage News Daily

Sales Management, MLO Jobs; Recruiting, VA IRRRL, Non-QM Products; Litigation is Expensive; HMDA Season has Begun!

Posted To: Pipeline Press

Of course some found humor in last week’s riot in Washington DC. (“In light of recent events, Mexico has decided that it will pay for the wall after all. And Canada wants one as well.”) For others, as heard in these messages from Republican Arnold Schwarzenegger and Colin Powell , there is nothing to laugh about. MLOs steer clear of politics with their clients, and on their job-related websites, for good reason. Not only is personal information on a company website against many rules and regulations, but there is a lot at stake. Many forecast that U.S. mortgage volumes could top $3 trillion this year as rising competition among lenders and an activist Federal Reserve combine to put further downward pressure on rates, and there are 800,000 U.S. borrowers who could save money…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: New Week, New Chance To Find The Next Ceiling

Posted To: MBS Commentary

0.96% was a well-established ceiling for 10yr yields in November and December. Despite numerous intraday breaks, yields only managed to close higher on Dec 4th (.969%). Every time yields moved up into the .96% zone, buyers pushed back like clockwork , even if only on a wristwatch scale. Fast forward to last week and the ceiling was obliterated by the GA senate election results (full democratic control implies more Treasury issuance in short term). The week ended with 3 heavy days of selling–heavy enough that it's already time to start looking for the next technical ceiling in Treasury yields. While it's probably too much to hope for, the first contender will be last week's high yield of 1.125%. It's incidentally the same high seen in the opening minutes of today's trading…(read more)

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Source: Mortgage News Daily

MBS RECAP: Bonds Determined To Sell Despite Weaker NFP

Posted To: MBS Commentary

Bonds Determined To Sell Despite Weaker NFP The bond market considered rallying in response to this morning's weak jobs data–at least at first. But it didn't take long for the bears to take over, ultimately pushing 10yr yields up and over 1.10% by the 3pm CME closing bell. The subtle saving graces inside the jobs report were only part of the reason. The bigger concern or perhaps the bigger question is whether or not this is evidence of that "sustained momentum shift" we were worried about heading into the week. The answer is "probably not." Not yet anyway, but it was/is enough weakness to cast some doubt. If we're going to get a bounce that helps ease those concerns, it may depend upon how next week's Treasury auctions are digested. Econ Data / Events 20min…(read more)

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Source: Mortgage News Daily

Have We Seen The End of Record Low Rates?

Posted To: Mortgage Rate Watch

While it might not seem like the sort of thing mortgage rates should care about, the senate run-off election in Georgia was by far and away this week’s most important event. This wasn’t a surprise either. In fact, interest rates have been bracing for this potential impact since the inconclusive results in early November. But why do rates care about politics? Actually, they don’t! Not too much, anyway. Rates care about the prices and yields of certain bonds in the bond market above all else. Bond prices can take a variety of cues, but the most basic and most objective input is that of supply and demand. Supply and demand can be influenced by several underlying factors. For instance, the Fed currently buys more than $100 billion in bonds each month. That has a huge impact on the demand side of…(read more)

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Source: Mortgage News Daily

Still Cheaper to Own than Rent in Majority of U.S. Counties

Posted To: MND NewsWire

In most parts of the country owning a home is more affordable than renting one according to ATTOM Data Solutions’ 2021 Rental Affordability Report . The company looked at the median price of a three-bedroom home in 915 U.S. counties and the rent for a comparable home and found owning more affordable 572 or 63 percent of them. The company says this has happened despite home prices increasing faster than rents in 83 percent of the counties and faster than wages in two-thirds. Renting, however, remains more affordable in the biggest cities. “Home-prices are rising faster than rents and wages in a majority of the country. Yet, home ownership is still more affordable, as amazingly low mortgage rates that dropped below 3 percent are helping to keep the cost of rising home prices in check,” said Todd…(read more)

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Source: Mortgage News Daily

Black Knight Notes Slowdown in Forbearance Improvement

Posted To: MND NewsWire

A month end wave of plan expirations in December led to a substantial decline in the number of active forbearances during the first week of 2021. Black Knight says there were 92,000 fewer active plans as the week ended, a decline of 3 percent and the largest weekly drop since early November. Many of the plans that expired were reaching the 9-month mark. Program removals totaled 146,000, offset by new plan starts, which were the lowest since spring, and restarts which were at their lowest level since early October. The company said however, that the decline was still a troubling slowdown in the rate of improvement . When the first wave of quarterly expirations hit in early July the number of active plans fell by 9 percent. Then, when plans began to hit their six-month expiration in October,…(read more)

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Source: Mortgage News Daily

Reverse, MLO, Ops Jobs; Social Media, Efficiency, CRA, CRM Products; Broker Training; Neobank Closures and SoFi IPO

Posted To: Pipeline Press

While the industry watches the personnel changes at Arch and National MI, I received several texts and emails pleading, “I’d like to cancel my subscription to 2021. I’ve experienced the free 7-day trial and I’m not interested.” This, after photos of “Chief Running Bull” at the Vice President’s desk on Wednesday circulated, with the caption, “We spend $750 billion annually on ‘defense’ and the center of American government fell in two hours to the cast of Duck Dynasty and the guy in the Chewbacca bikini.” Tiger King/Joe Exotic appears almost normal! I received this note from Mike Prince with ActiveComply , a firm that works specifically with lenders on social media & website compliance. I never expected to see a loan…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Much Weaker Jobs Report Provides a Friendly Reminder For Bonds

Posted To: MBS Commentary

While it's essentially a given the bigger stimulus is on the way with democrats controlling the senate (thus implying more Treasury issuance and a quick adjustment to higher yields as a result), it's worth remembering that the underlying phenomenon creating the need for that stimulus is still a thing. Today's big miss in the December jobs report provides a solid reminder. Sure, bigger stimulus pushes rates higher, but covid-driven economic realities continue trying to hold rates down (with plenty of help from the Fed). Jobs numbers like today's do absolutely nothing to push the Fed away from its ultra bond-friendly stance. Here's a quick run-down: Nonfarm Payrolls -140k vs 71k f'cast, 336k prev Unemployment Rate 6.7 vs 6.8 f'cast, 6.7 prev Notably, the 336k was revised…(read more)

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Source: Mortgage News Daily

Mortgage Rates Are Actually HIGHER Today and This Week

Posted To: Mortgage Rate Watch

Mortgage rates moved higher today, but only a modest pace compared to yesterday (read more about yesterday’s rate rout HERE ). Over the past two days, the average rate quote for a top tier conventional 30yr fixed loan has risen by an eighth of a percent (.125%). Yesterday accounts for essentially all of the move, making it one of only a handful of days with as much upward movement in the past few years. Is an eighth of a point a big deal? Only you can answer that. It comes out to about $7/month for every $100k in loan amount. For some, it’s not a big deal, but for others it can make or break a transaction. Either way, everyone can agree it would be a bigger deal if we were to see additional examples of similar spikes in the near future. So will we? That’s definitely possible , but not necessarily…(read more)

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Source: Mortgage News Daily