MBS RECAP: Small Scale Volatility In The Bigger Picture

Posted To: MBS Commentary

Small Scale Volatility In The Bigger Picture The adverse market fee continues to dominate lock/float consideration for those who haven't seen it return yet. For everyone else, the decision has most to do with Wednesday's Fed announcement which presents the biggest binary risk we've seen from a scheduled event in a while (hint: binary means it could be good or bad for rates/bonds). Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Market Movement Recap 08:26 AM Bonds were almost perfectly unchanged overnight despite stocks gaining roughly 1% fairly quickly. 10yr yields are just a hair under 'unchanged' and 2.0 UMBS are in a similar stance (not enough liquidity yet to pin them down… could be down 0.09, up 0.03, or somewhere in between). 02…(read more)

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Source: Mortgage News Daily

Lenders Upbeat About Profits, Loan Demand

Posted To: MND NewsWire

Mortgage lenders had an excellent second quarter in terms of profitability according to the Mortgage Bankers Association, and Fannie Mae’s Lender Sentiment Survey for the third quarter indicates they expect that situation to continue. Forty-eight percent of respondents believe their profit margins will increase compared to Q2 while 37 percent say profits will be about the same. Only 15 percent believe there will be a decline. Lenders said consumer demand had remained strong across all loan types, GSE-eligible, non-GSE-eligible, and government, and in some cases hit new highs. More lenders reported that demand for purchase loans grew both for the prior three months and the next three months and refinance mortgage demand remained extremely strong in the third quarter on both a look-back and look…(read more)

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Source: Mortgage News Daily

MBS Week Ahead: Lots of Data But Focus is On The Fed

Posted To: MBS Commentary

Bonds have been consolidating aggressively for an entire month . 10yr yields have been perfectly contained between 0.63 and 0.73 with one brief occasion following Fed Chair Powell's Jackson Hole speech. Actually, the volatility on that day had more to do with the release of the Fed's updated inflation framework, and it was this, more than anything, that set the stage for the consolidation leading into the current week. Why? The Fed is obviously feeling a few things: They feel like they would have done things differently in the past few years if they knew then what they know now. Specifically, they have expressed some remorse about raising rates too quickly and/or too soon. Hindsight is definitely 20/20 in that regard considering popular opinion was that the Fed had waited too long to…(read more)

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Source: Mortgage News Daily

Sales, Valuation, Rehab Products; Non-QM Moves in Primary and Secondary; Capital Markets

Posted To: Pipeline Press

People can accomplish a lot in a day. And lenders are continuing to hire like mad dogs (if mad dogs had HR departments), especially non-bank lenders. The Mortgage Bankers Association reports that nonbank mortgage bankers and brokers’ collective payrolls expanded by nearly 2% on a consecutive-month basis and were up 9% from a year ago in the Bureau of Labor Statistics’ latest report. The industry employed an estimated 323,300 in July , preliminary figures show. (If anyone tells you, “A half a million people are in this business,” tell them to inform the BLS.) Speaking of jobs, a friend of mine who is homeschooling her kids told me, “My child just said ‘After March through June, and now this, I hope I don’t have the same teacher next year’…. I’m offended…(read more)

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Source: Mortgage News Daily

Pandemic Pushing Gen Z and Millennials to Move Back Home

Posted To: MND NewsWire

It was a phenomenon 12 years ago that ended with a huge decline in homeownership among Millennials, and now it is happening, for the same reason to Gen Zas a huge surge in unemployment sends young adults home to live with their parents. The root cause this time, of course, is vastly different; a deadly virus rather than a general slowdown in the economy coupled with mortgage defaults and delinquency. The Pew Research Center has found that the share of 18- to 29-year-olds living with their parents now constitutes a majority of that age group, surpassing the share in the Great Recession and even topping the previous peak during the Great Depression. Three Pew Center analysts, Richard Fry, Jeffrey S. Passel, and D’Vera Cohn found, using Census Bureau data, that in July 26.6 million or 52 percent…(read more)

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Source: Mortgage News Daily

Getting a Mortgage Soon? Read This Now!

Posted To: Mortgage Rate Watch

If you’re in the mortgage process currently or if you will be soon, there is a tremendously important development to be aware of. The net effect is that rates are about to go up and, in some cases, they already have . The culprit is the new “adverse market fee” announced for all refinances guaranteed by Fannie Mae or Freddie Mac on or after December 1st. To hit that date with some lenders, your loan would need to close by mid-to-late October! Given the high demand for mortgages, new loans will take at least that long in many cases. The fee will result in rates moving higher by 0.125-0.25% (or in additional closing costs equal to 0.5% of the loan amount). While that might not sound significant, this is the biggest change of its kind, ever . We already had a sneak preview of the fallout when…(read more)

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Source: Mortgage News Daily

MBS RECAP: 2 Different Approaches Depending on Adverse Market Fee

Posted To: MBS Commentary

Lock Decisions Still Hinge on Adverse Market Fee Without any significant volatility in the bond market, mortgage rate strategy is still all about the return of the adverse market fee. In cases where it's already back, the outlook is more neutral, but still cautious ahead of next week's Fed announcement. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Consumer Price Index (CPI) 0.4 vs 0.3 f'cast Core Annual CPI 1.7 vs 1.6 f'cast Market Movement Recap 08:46 AM Bonds were flat to slightly weaker overnight but have rallied back to positive territory after this morning's CPI data. Looks like a few traders were on guard for higher inflation. Both MBS and Treasuries are just barely on the friendly side of 'unchanged.' Stock futures are…(read more)

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Source: Mortgage News Daily

Almost 20 Million Homeowners are Prime Refi Candidates

Posted To: MND NewsWire

Freddie Mac’s Mortgage Market Survey published yesterday reported a 7-basis point decline in the 30-year mortgage rate over the previous week and reported that the resulting rate, 2.86 percent, was a new record low. Black Knight reports that this new rate has had a big impact on the pool of refinance candidates. The company says there are now 19.3 million “high quality” refinance candidates, the largest number ever. This is 43 percent of all active 30-year mortgages. Black Knight defines a refinanceable loan as one where the homeowner has a credit score of at least 720, at least 20 percent equity in the home, and the potential for a 75-basis point reduction in their mortgage interest rate. These homeowners have potential savings averaging $299 per month , a national aggregate of $5.8 billion…(read more)

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Source: Mortgage News Daily

Weekly Forbearance Totals Decline

Posted To: MND NewsWire

The number of loans in forbearance continued to dwindle over the last week, with almost 66,000 fewer homeowners in plans. Over the last 30 days the decline has totaled 238,000 or 6.0 percent. Black Knight says that, as of September 8, about 3.7 million plans are still active, 7 percent of the mortgages in servicer portfolios. This is a 22 percent decline from the peak of 4.7 million in late May. The remaining plans represent $789 billion in unpaid principal. At the beginning of September there were 2 million plans that were set to expire during the month and servicers have already reduced that number to 1.7 million as they assess loans for extending or terminating their plans. The week’s decline was primarily driven by GSE loans , which fell by 36,000 loans to 1.39 million or 5.0 percent of…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Why Were MBS Almost a Quarter of a Point Weaker This Morning?!

Posted To: MBS Commentary

There's nothing quite like the visual (and visceral) impact of opening up MBS Live in the morning only to see a big drop in the blue line. Today is one of those days. For those who haven't gotten around to it yet, let's get it out of the way. The sooner we do, the sooner I can explain why this isn't as bad as it looks. In fact, it's not bad at all… The first clue here is that the chart shows 0-00 as the day-over-day change and he previous close price is the same as the current price (despite the line on the chart looking like it's MUCH lower than the previous close price). This is not an error. It's the roll! The word "roll" has a few meanings around here. For those who participate in MBS markets at a higher level, "dollar rolls" are actual…(read more)

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Source: Mortgage News Daily