MBS Day Ahead: The Case Against Mortgage Rates And a Note on Today's GDP

Posted To: MBS Commentary

Let's get the housekeeping out of the way first. With so much talk in the news about the coronavirus effect on GDP, I figured I'd point out that today's -5.0% result is for Q1. Financial markets are much more interested in Q2's data, and even then, GDP isn't necessarily the first place investors look for an indication of the economy. It's more of an 'evening news' type of indicator whereas ISM PMIs and NFP are for traders. Speaking of traders, whether we're talking about equities or debt, the average investor is currently taking part in the "if all goes according to plan" coronavirus bounce. This involves a gradual correction for bonds and a faster-paced correction in stocks after the ridiculous period of volatility seen in March and early April…(read more)

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Source: Mortgage News Daily

Management, LO Jobs; Marketing, Processing, Default Products; High Balance Pricing

Posted To: Pipeline Press

Some things are uncertain, like whether colleges, driven by ticket & TV income, bring back their football players when the rest of the student body “remains virtual” this autumn. (Harvard law school is online for the fall semester, for example, leading to a tuition lawsuit , of course.) Or if your company is giving you July 3 off (the bond markets are closed). Other things are certain, like the mortgage-level data from the 5,500 institutions reporting HMDA data for 2019 . Or states putting anyone who visits certain states into quarantine . I receive emails all the time from brokers and LOs who are certain their high balance pricing is the worst in the industry . Why? An explanation is below in the Agency section. Lender Services and Products Overstated & Understated Credit…(read more)

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Source: Mortgage News Daily

MBS RECAP: Rising Rates Thwarted By Coronavirus Concerns

Posted To: MBS Commentary

Rising Rates Thwarted By Coronavirus Concerns Stop us if you've heard this one before, but rates are low due to an unprecedented global emergency. Unless coronavirus situations deteriorates significantly, it's only fair for rates to gradually push back toward higher levels. But when case counts spike, bonds are still willing to respond. Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying New Home Sales: 676k vs 640k f'cast, 580k prev (+16.6%) Market Movement Recap 08:24 AM Bonds WERE slightly stronger as stocks weakened overnight session. 10s made it to .699, but yields bounced higher in early domestic trading, now up to .73%. MBS are hitting their first trades about 1-2 ticks (.03-.06) weaker. 09:59 AM Yields are surging (relatively) lower as stocks slump at the 9:30am…(read more)

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Source: Mortgage News Daily

Record Low Rates For Some; Frustration and Confusion For Others

Posted To: Mortgage Rate Watch

Mortgage rates moved modestly lower today, but face an uphill battle in general. They fell very quickly as coronavirus first hit financial markets. They hit multiple new all-time lows in since March 9th and continued setting new records as recently as last week for some lenders. In fact, there are a few lenders that are offering their best rates ever TODAY. The catch is that these rates are very similar to those seen yesterday and the day before (and so on and so on). Markets are waiting to see if we can prevent a massive 2nd wave of coronavirus cases while still reopening the economy. To whatever extent that’s possible, rates should begin to see gradual upward pressure. There’s another important catch , and it’s one we’ve talked about quite a bit in the past few months. At the very same lenders…(read more)

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Source: Mortgage News Daily

Home Price Gains Defied The Odds in April

Posted To: MND NewsWire

House prices continued to be unfazed by the current economic upheaval. The Federal Housing Finance Agency (FHFA) reports that its U.S. House Price Index for April, the first full month that reflects the impact of the pandemic, continued to rise almost unabated. The index increased by 0.2 percent from March compared to a 0.1 percent increase from February to March. On an annual basis the index rose 5.5 percent, down slightly from the 5.7 percent gain in both February and March. Prices did decline from March in two of the nine census divisions, New England was down 0.2 percent and the South Atlantic was off by 0.5 percent. The index in both the Pacific and Mountain regions were unchanged. Gains elsewhere were topped by an 0.8 percent increase in the West South Central division. The 12-month changes…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Have You Heard The One About The Uptrend?

Posted To: MBS Commentary

Stop us if you've heard this one before, but rates are low due to an unprecedented global emergency. Unless coronavirus situations deteriorates significantly, it's only fair for rates to gradually push back toward higher levels. But if that's so obvious, why haven't rates already preemptively moved much higher? Why are mortgage rates continuing to operate near record lows? 2 questions there, and each of them has a different answer. Let's break them down. Why haven't rates already preemptively moved much higher? Simply put, markets know that the coronavirus saga has yet to fully play out. Naturally, numbers looked to be getting under control as lockdown measures forcibly created social distancing. But now that most states have eased lockdown measures, epidemiologists'…(read more)

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Source: Mortgage News Daily

Marketing, Broker, Tax Products; VA, Construction Webinars; Tech Partnerships

Posted To: Pipeline Press

Companies worldwide are grappling with continued travel bans, and how to bring back employees in waves, if at all. Others are re-designing office layouts, thinking about renting more space, and looking at the cost of footprint changes. Some employees can’t wait to return to office life, others are doing fine without commuting, and still others will spend part of the workweek at home and in the office, all the while helping clients & borrowers . Most “experts” expect less office space to be required. It’s crazy! Traditional economic models and measurements are in disarray as well, as any economist worth their salt will tell you. For starters, many of the government’s statistics are driven by surveys, and distressed people and businesses often aren’t wild…(read more)

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Source: Mortgage News Daily

Amazing Winning Streak For Home Purchase Applications Finally Levels Off

Posted To: MND NewsWire

The nine-week string of increases in purchase mortgage applications came to an end last week and refinancing volume pulled back as well. Consequently, the Mortgage Bankers Association’s (MBA’s) Market Composite Index, a measure of overall application volume during the week ended June 19 dropped significantly, down 8.7 percent on a seasonally adjusted basis. The index was 9.0 percent lower before adjustment. The seasonally adjusted Purchase Index decreased 3.0 percent from one week earlier. The unadjusted Purchase Index fell by 4.0 percent but was still up 18.0 percent compared to the same week in 2019. The Refinance Index dropped 12 percent from the previous week and was 76 percent higher than the same week one year ago. Applications for refinancing represented 61.3 percent of the total compared…(read more)

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Source: Mortgage News Daily

MBS RECAP: Decent Day For MBS But Broader Trend Remains a Concern

Posted To: MBS Commentary

Decent Day For MBS But Broader Trend Remains a Concern Rates are low. Unless coronavirus wins (or looks like it might), rates should continue to gradually move higher, but not in a straight line. Keep the underlying, gradual, uptrend in rates in mind on days where it seems like things are going well for bonds. Those can be great days to lock in this environment. Econ Data / Events 11:30-11:50 AM (ET) – Fed 30yr UMBS Buying New Home Sales: 676k vs 640k f'cast, 580k prev (+16.6%) Market Movement Recap 08:41 AM Bonds rally and fade overnight on Navarro's China trade deal comments (and retraction). Strong data in Europe fueled more weakness. 10yr starting out up nearly 2bps, but MBS are outperforming (trading just barely positive on the day). 11:37 AM Stocks slid and bond yields improved…(read more)

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Source: Mortgage News Daily

April New Home Sales Surge, Rising Over 16%

Posted To: MND NewsWire

After its pandemic-related plunge in April, the rapid recovery of the Housing Market Index, a measure of builder confidence, seems justified by today’s Census Bureau report on new home sales. For the second month in a row, sales of newly constructed homes outdistanced expectations, rising by 16.6 percent to a seasonally adjusted annual rate of 676,000 units. However, the original April estimate of 623,000 units was revised down drastically to 580,000. This month’s surge did exceed last May’s 580,000 unit rate by 12.7 percent, but it seems that this data is more susceptible to revision in the current environment than in more normal times. Sales exceeded the upper limits of analysts predictions , which in the case of those polled by Econoday ranged from 600,000 to 670,000 units. The consensus…(read more)

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Source: Mortgage News Daily