Five Questions for the New Year

Posted To: MND NewsWire

While COVID-19 has wreaked havoc on most of the economy last year, Wells Fargo’s Securities Economic Group says many of the responses to the pandemic – lockdowns, remote schooling, and remote work – served to “flip the script” on housing, increasing demand for some types of properties and locations. At the same time, massive job losses have caused a spike in the delinquent mortgage and rent payments, although forbearance and moratoriums have held foreclosures and evictions to a minimum. A new report from the economists puts forward and answers five questions about the direction of housing over the next year. What is the risk that the red-hot housing market will turn into a bubble? Concerns about a bubble stem mainly from surging home prices; the median price of an existing single-family home…(read more)

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Source: Mortgage News Daily

Compliance, MLO, AE, Ops Jobs; Appraisal, Profitability Tools; Upcoming Events; Rates Creep Higher: Why?

Posted To: Pipeline Press

Some will say that the world’s most anticipated palindrome is “1-20-21”. Others will say that Inauguration Day spells the end of personal freedom in the United States. In our business, lenders everywhere have their eyes on the horizon. One grizzled industry “Eeyore” emailed, “Every time I see headlines and reporting about giddy mortgage profitability and companies going public in the best year ever, I remember that Liz Warren is still in the Senate, Joe Biden wants to tax the rich, and the fate of Fannie and Freddie remain uncertain and subject to government action. After COVID struck the industry with March’s capital markets gyrations, the Fed’s action to flood the market with liquidity turned what was going to be a disastrous year into the best…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Looking For Support After Yesterday's Breakout (Not Finding It Yet)

Posted To: MBS Commentary

10yr yields were at the bottom edge of a months-long uptrend heading into the Georgia senate election. One result would have helped them break out to lower yields while the other all but guaranteed a break up and over 1.0%. We got "the other," and bonds have been trading fairly logically since then. The next big question is whether or not there was additional negative momentum waiting for an opportunity to strike. So far, the answer is not looking great as this morning's yields are already slightly higher than yesterday's highs. Here's how the past few days have looked in the context of the longer term trend: Zooming out a bit helps us visualize the narrative of gradually higher yields since turning the covid corner this past summer. But wait, you say? How can I say we've…(read more)

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Source: Mortgage News Daily

Rates Rising Quickly, But The Truly Scary Stuff is For Another Day And Another Reason

Posted To: Mortgage Rate Watch

Mortgage rates went to bed last night knowing they were at risk of a volatile day today. Georgia’s senate race has been in focus for 2 months now because it had the chance to change the balance of power in congress. With both seats flipping from red to blue, that’s exactly what happened today. While the election results have only been confirmed for about an hour, the bond market (which underlies interest rate movement) was already bracing for impact in the middle of the night. Specifically, bond yields (aka “rates”) were already quite a bit higher by the time the election was finalized this afternoon. When the bond market deteriorates (aka, moves lower in price and higher in yield), mortgage rates are typically rising at a similar pace. Does the mortgage market r eally care that much about…(read more)

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Source: Mortgage News Daily

MBS RECAP: Crazy Day For Bonds. Is The Worst Over?

Posted To: MBS Commentary

Crazy Day For Bonds. Is The Worst Over? For 2 straight months, and especially over the past few weeks, we've been calling out the Georgia senate election as the biggest ticket market mover for bonds. It proved its importance today as 10yr yields broke above 1.0% for the first time since March 2020. Selling hit hard overnight, and a second wave hit at the 9:30am NYSE open as stock prices and bond yields moved higher in concert. There was never a convincing push back in the other direction despite the drama unfolding in the capitol building. All we have is a ceiling for today. It remains to be seen if it will be a ceiling for more than a day. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) ADP Employment -123k vs +88k f'cast, +304k prev Factory Orders…(read more)

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Source: Mortgage News Daily

Correspondent, MLO Jobs; Staffing, Compliance, MI Products; Agency Forbearance Uncertainty

Posted To: Pipeline Press

Would you rather loan $200,000 to a Danish buntmager (furrier) or the United States Government? Well, while the industry is digesting the news that Guaranteed Rate has entered into a definitive agreement to acquire Stearns Holdings, LLC, from funds managed by Blackstone, and before you answer this pop quiz on risk, you should know that the U.S. 10-year “risk free” T-Note is currently yielding 1.00 percent , versus Danish 20-year mortgages at 0 percent . Not much prepayment risk there! Speaking of risk, Fannie Mae and Freddie Mac know a lot about it, but many in the industry are wondering about the FHFA’s position on whether the GSEs can purchase loans where the borrowers seek forbearance due to a COVID hardship after closing, but prior to delivery to the GSEs. Given the hundreds…(read more)

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Source: Mortgage News Daily

Mortgage Application Volume Fell Sharply at the End of 2020

Posted To: MND NewsWire

The Mortgage Bankers Association (MBA) resumed reporting on mortgage applications today after a two-week holiday hiatus. Information on mortgage volume during the week ended December 31 is reported relative to the previous report covering the week ended December 18 but information on mortgage rates and application shares by loan types are compared to the week ended December 25. MBA’s Market Composite Index, a measure of mortgage loan application volume, decreased 4.2 percent on a seasonally adjusted basis from two weeks earlier. On an unadjusted basis, the Index decreased 33 percent compared with two weeks ago. The refinancing appeared to bounce back from a big loss during the first week of the holiday season. The Refinancing Index, with an adjustment to account for the holiday, finished last…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Bonds Reeling on GA Election Results. Game Over?

Posted To: MBS Commentary

For 2 straight months, and especially over the past few weeks, we've been calling out the Georgia senate election as the biggest ticket market mover for bonds–the one thing that stood the best chance to force 10yr yields to break out of their 0.9 – .96 range. The election isn't even officially over, but the mere "strong probability" of a democratic sweep has been enough for 10's to break up and over 1% for the first time since March 2020. Both left and right-leaning media (and centrists like AP, for that matter) agree that democrats have likely prevailed. NYT: Fox: In the grand scheme of things, the reaction to the election simply keeps 10yr yields inside the trend channel (yellow lines) that has prevailed since early August, even though it represents a clear breakout…(read more)

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Source: Mortgage News Daily

MBS RECAP: Tomorrow Could Be a Very Big Day For Bonds

Posted To: MBS Commentary

Tomorrow Could Be a Very Big Day For Bonds Bonds experienced a bit of weakness today, but 10yr yields bounced almost perfectly at the range ceiling of .96%. That means they made it all the way from November through today in essentially the same narrow range. All the while the biggest potential driver of a breakout has been the election results due out tonight. That means tomorrow could be a very big day, for better or worse. Granted, these sorts of big ticket market movers don't always live up to the hype, but all we can ever really know in advance is that some events have a lot more potential than others to move markets. This is one of those! Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) ISM Manufacturing 60.7 vs 56.6 f'cast, 57.5 prev ISM Prices…(read more)

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Source: Mortgage News Daily

Mortgage Rates Brace For Potential Impact

Posted To: Mortgage Rate Watch

Mortgage rates got off to a slow start yesterday. It was hard to object considering that left the average lender in line with record lows. But today was a bit different. While most lenders were little-changed at first, many ultimately raised rates during the day in response to deterioration in the bond market. The notion of “raising rates” is relative, in this case. The average prospective mortgage borrower wouldn’t think much of the mid-day increases. In fact , they would likely be seeing the same rate quote as yesterday with only a slight increase to upfront costs (or a decrease to lender credit). This is typically the case for mortgages. It takes some serious drama in the bond market for rates to move in an alarming way, and that sort of drama has been in short supply for months. If there…(read more)

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Source: Mortgage News Daily