MBS RECAP: Some Cause For Concern, Despite The Gains

Posted To: MBS Commentary

Stock Market Weakness To The Rescue Last Friday tied August 11th as the worst day of since early June. It was something the bond market clearly felt needed to happen (weaker stocks were little help). The day before, however, stock selling definitely helped bonds extend their week-long rally. Now today, we're seeing bonds finding comfort in the same misfortune. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Nonfarm Payrolls 1.371m vs 1.4m f'cast , 1.734m prev Unemployment Rate 8.4 vs 9.8 f'cast , 10.2 prev Participation Rate 61.7 vs 61.4 prev Market Movement Recap 08:20 AM Bonds were fairly flat to start the overnight session, but gained ground in concert with another big stock sell-off. 10yr yields are down 4.5bps at .676 and 2.0 UMBS are starting…(read more)

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Source: Mortgage News Daily

Q2 Saw Highest Origination Volume in History, Q3 Might be Even Better

Posted To: MND NewsWire

The second quarter of this year was a miserable on many levels, but mortgage origination volume was not one of them. Black Knight’s current Mortgage Monitor reports that the second quarter saw the largest quarterly origination volume since the company began tracking it at the beginning of 2000. Low interest rates drove refinancing up by more than 60 percent compared to the previous quarter and 200 percent higher than in the second quarter of 2019. There were $1.1 trillion in first lien mortgages originated during the period, 70 percent of it through refinancing. The 2.3 million refis in the second quarter were dominated by rate/term refinances which saw a four-fold increase from a year earlier Cash-out refinances increased as well, up by 66 percent, but had only a 30 percent share of refinance…(read more)

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Source: Mortgage News Daily

MBS Week Ahead: Stock Market Weakness To The Rescue

Posted To: MBS Commentary

Up until last Friday, bonds had improved decisively for 5 consecutive days. It's fairly rare to see these sorts of winning streaks last more than 5 days, and this time was no exception. In fact, traders went out of their way to sell bonds aggressively last Friday. It ultimately matched August 11th as the worst day of since early June. Moreover, it did so with no provocation from the stock market. Just a day earlier, stocks were unequivocally the source of inspiration for that 5th day of bond market gains. Why would bonds listen to stock market weakness on Thursday but not Friday? The easy (and incorrect) answer is that Thursday was just a coincidence and the two have no bearing on each other. Don't get me wrong. I'll spend just as much time debunking stock/bond correlation as I…(read more)

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Source: Mortgage News Daily

LO Jobs; Non-QM, Servicer, Sales, Training Tools; Time Required to Hack a Password

Posted To: Pipeline Press

On one hand we have the old adage, “No tree grows to the moon.” On the other hand, MLOs and real estate agents are licking their chops given that 52 percent of young adults live with their parents . What does that tell you about the demand for housing and loans in the coming years? And it isn’t as if this is new. I went to some previous information I wrote. “Here in September 2018, per the Case-Shiller home price index, housing values eclipsed their 2006 pre-crisis peak in January of this year and since then have only pushed higher. And as the Federal Reserve pushes rates higher, that will drag on home affordability, depressing demand. Affordability has been hurt by rising mortgage rates and higher home prices, now dipping towards levels not seen since 2008, and well…(read more)

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Source: Mortgage News Daily

Delinquency Rate Could Double Without More Federal Support

Posted To: MND NewsWire

Mortgage delinquencies spiked in June and the serious delinquency rate, loans 90 or more days past due but not in foreclosure, reached its highest level in more than five years. CoreLogic in its monthly loan performance report, said 7.1 percent of all mortgages nationwide were at least 30 days past due, including those in foreclosure. This is 3.1 percentage points higher than the delinquency rate in June 2019. Further, the company predicts that, barring additional government programs and support, serious delinquency rates could nearly double from the June 2020 level by early 2022. Not only could millions of families potentially lose their home, through a short sale or foreclosure, but this also could create downward pressure on home prices – and consequently home equity – as distressed sales…(read more)

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Source: Mortgage News Daily

MBS RECAP: Today’s Weakness Made Sense? Great… So Now What?

Posted To: MBS Commentary

Perfect Storm in Bonds Pushing Yields Quickly Higher Between the 5-day rally running the risk of getting tired, the technical resistance at .63%, the artificial extension of the rally thanks to huge stock selling, and the upcoming 3-day weekend, it made significantly more sense to err on the side of caution yesterday. Now today, we see just how true that was. Underlying sources of strength remain, so it will be very interesting to see how eager bond buyers are to push back next week. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Nonfarm Payrolls 1.371m vs 1.4m f'cast , 1.734m prev Unemployment Rate 8.4 vs 9.8 f'cast , 10.2 prev Participation Rate 61.7 vs 61.4 prev Market Movement Recap 08:14 AM Bond yields were sideways to slightly higher in the…(read more)

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Source: Mortgage News Daily

The Uncommonly Strong Case For Locking a Mortgage Rate

Posted To: Mortgage Rate Watch

Almost everywhere you look, low mortgage rates are in the news. Experts are claiming they’ll remain low or move lower for years to come. They might be right! But that doesn’t necessarily mean you should wait to refinance or to lock your rate if you’re already in the loan process. It is true that mortgage rates improved noticeably earlier this week. Part of the improvement is due to overall gains in the bond market following last week’s Federal Reserve scare. When the Fed updated its policy framework, the bond market was briefly spooked. A spooked bond market means higher yields/rates. The next 5 business days brought a deliberate recovery for longer-term rates. This can be seen in the following chart of 10yr Treasury yields (a benchmark for all longer-term rates in the US). Definitely make…(read more)

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Source: Mortgage News Daily

LO, CD Jobs; Database, HELOC, Digital Tools; Vendor and Lender Products

Posted To: Pipeline Press

As we head toward the Autumnal Equinox on 9/22, places like Seattle and Minneapolis are losing four minutes of sunlight a day. Something else that is losing ground almost as quickly are monthly rents in expensive, crowded cities like San Francisco and urban New York . Six months ago I don’t recall anyone predicting a flight from urban cores and a corresponding increase in housing values in outlying areas. If you can work from home, and the kids are going to school (hopefully temporarily) over the internet, why live somewhere you don’t want to live? And then the question is, “New or used?” New homes account for biggest share of U.S. sales in 12 years. Americans rushing to take advantage of historically low mortgage rates are finding few previously owned homes to choose…(read more)

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Source: Mortgage News Daily

MBS Day Ahead: Short-Term Caution; Longer-Term Optimism

Posted To: MBS Commentary

Due to the "anything can happen" nature of financial markets AND the fact that traders can trade what we can predict, I rarely take an unequivocal stand when it comes to the immediate future. Yesterday was about as close as I get , apart from those rare instances when I think I see the writing on the wall before the market has fully appreciated what's going on (The run up to the taper tantrum in May/June 2013 was the last obvious instance of that). Why was I feeling defensive? Check out yesterday's recap for the details, but between the 5-day rally running the risk of getting tired, the technical resistance at .63%, the artificial extension of the rally thanks to huge stock selling, and the upcoming 3-day weekend, it made significantly more sense to err on the side of caution…(read more)

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Source: Mortgage News Daily

CFPB Goes After 6 VA Lenders for Shady Practices

Posted To: MND NewsWire

The Consumer Financial Protection Bureau (CFPB) has been on a two-month enforcement tear aimed at mortgage lenders employing deceptive practices in the VA mortgage lending area. The Bureau has issued consent orders against six companies since late July in what it terms a “sweep” i n response to concerns about potentially unlawful advertising in the market that the VA identified. CFPB found the companies had sent direct-mail advertisements primarily to military servicemembers and veterans that contained false, misleading, and inaccurate statements or lacked required disclosures. The complaints set forth similar instances of violations of the Consumer Financial Protection Act’s (CFPA) prohibition against deceptive acts and practices, the Mortgage Acts and Practices – Advertising Rule (MAP Rule…(read more)

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Source: Mortgage News Daily