Mortgage News Daily

  • Posted To: MBS Commentary

    There's a good video in the news stream with Austan Goolsbee going on a bit of rant about how the Senate's procedural vote on a budget resolution late last night was totally expected. Someone should have told financial markets ahead of time. Traders speak with dollars and their words were clear in response to the budget bill. Either it really was a surprise, or they were simply holding out for confirmation that the Senate could actually get the 51 votes needed. Indeed, Rand Paul's dissension made it a close call. Confused yet? The bottom line is that this procedural budget resolution contained language that will allow the Senate to pass tax legislation with 51 votes instead of 60. The fact that the Senate was able to get 51 votes together for this effort suggests to some that they...(read more)

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    Created: 10/20/2017 3:53:22 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher today as financial markets grew more optimistic about the potential for tax reform. Late last night, the Senate passed a resolution that included language designed to make tax reform legislation easier to pass. In a nutshell, it means the Senate only needs 51 votes as opposed to 60 when it comes time to consider a tax bill. Stocks like tax reform. They moved quickly higher in futures trading. Bonds (which dictate rates) aren't too thrilled with the idea for several reasons. They moved quickly lower in price, which equates to upward movement in terms of rates. Despite a fairly abrupt move in underlying trading levels, lenders' rate sheets weren't apocalyptically damaged . The average lender continues to quote rates that are roughly similar to those seen on October...(read more)

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    Created: 10/20/2017 3:26:00 PM
  • Posted To: MND NewsWire

    While it sometimes seems as though Americans live online, there is still apparently one area where they still value human contact. A recent survey conducted by Fannie Mae found borrowers continue to put a lot of trust in their real estate agent and their mortgage lender. The survey, conducted with borrowers who had purchase mortgages originated in 2016 in the Fannie Mae book of business, found that homebuyers relied on a variety of information sources when shopping for a mortgage. These included friends and family, financial planners, government agencies, mass media and non-profit housing counselors. However, when asked which were the most influential, borrowers most often cited, in fact at nearly double the rate of the next closest response, were mortgage lenders at 32 percent, with real estate...(read more)

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    Created: 10/20/2017 9:49:43 AM
  • Posted To: MND NewsWire

    It was only a small gain , albeit larger than analysts expected, but after three straight months of sliding sales, the existing home sales report for September is still good news. The National Association of Realtors® (NAR), said the month saw closed transactions for the purchase of single-family houses, townhouses, condos and cooperative apartments rise to a seasonally adjusted annual rate of 5.39 million. This is an increase of 0.7 percent from the August rate of 5.35 million. NAR noted that "Ongoing supply shortages and recent hurricanes muted overall activity." This meant that even as sales were higher compared to August, they were down 1.5 percent year-over-year and were the second slowest of the year, trailing only those in August. Analysts polled by Econoday were looking for sales...(read more)

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    Created: 10/20/2017 7:53:46 AM
  • Posted To: MND NewsWire

    Refinancing increased its share of total originations in September, rising 3 percentage points from August to 38 percent of all closed loans. Ellie Mae, in its Originations Insight report says the refinance share was the highest since February and set forth two possible reasons. First, interest rates on closed loans during the month dipped to the lowest of the year, 4.21 percent. Second, the time to close a refinance fell to 40 days, the shortest timeline since February 2015. After remaining steady for several months, the distribution of loans shifted slightly. The conventional loan share picked up 2 points to 66 percent at the expense of FHA l oans which dropped 2 points to 20 percent. The VA share remained at 10 percent as it has all year. While refinancing loans closed faster, purchase loans...(read more)

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    Created: 10/20/2017 6:39:46 AM
  • Posted To: Pipeline Press

    Not only are houses becoming smaller, but the lots are smaller also. Trulia tells us that houses built since 2015 occupy, on average, 25 percent of the land they were built on. That figure was only 13.9 percent in 1975. And according to Capital Economics Ltd. , the size of an American home has decreased for the first time in 30 years to 2,420 sq. ft. after peaking in 2015 at 2,520 sq. ft. This is attributed to the shrinking of homebuilder margins due to a shortage of labor and land. And lastly, my guess is that the huge rental companies are chomping at the bit over this news: Houston is seeing homes sold for 40 cents on the $1 after the flood. An estimated 1.8mm homes suffered uninsured losses, according to CoreLogic Inc. New Products From Lenders and Vendors This week, Informative Research...(read more)

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    Created: 10/20/2017 6:38:46 AM
  • Posted To: MBS Commentary

    It's a crappy day. Sorry to use such an esoteric analytical term, but it's the most accurate way to describe the outlook. So what changed? Long story short, we'd been in a narrow, consolidative range since late September. That range had a chance to be a straight up correction back toward lower rates, but bonds weren't able to maintain momentum after last Friday's strong post-CPI rally. Resistance kicked in at a well-traveled technical level of 2.28%, thus setting up the lower boundary of the consolidative range. Until yesterday, we HAD a series of "lower highs" in rates to offset the series of "higher lows." In short, yields were converging, and it was anyone's game. This morning, the upper consolidation line (both in teal in the following chart)...(read more)

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    Created: 10/20/2017 6:38:02 AM
  • Posted To: MBS Commentary

    It was a pretty interesting session for how narrow the range continues to be in bond markets--interesting both for bonds themselves and for the analysts scrambling to make sense of the movement. Apart from last Friday's CPI data, there hasn't been an unequivocal market mover for bonds. There hasn't been an obvious theme with a predictable reaction. That resulted in the collective Western analytical mindset concluding that it must be something Western behind the movement. The leading Western candidates for drama included Catalonian independence with Brexit headlines being a distant second. I was pretty dismissive about Catalonia as a market mover until this morning, because the overnight surge in bonds (and massive drop in stocks) lined up perfectly with the 4am ET deadline for Catalonia...(read more)

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    Created: 10/19/2017 2:11:42 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were unchanged to slightly lower today. Political drama in Europe pushed stocks lower overnight and sent investors toward safer haven assets like bonds. Higher demand for bonds pushes rates lower, all things being equal. All of the above meant a stronger start for bond markets and slightly lower mortgage rates this morning. Still, the average improvement was so small that it was barely noticeable, largely because bonds had weakened yesterday afternoon, implying that lenders would have started today at a disadvantage were it not for the overnight improvement. Still with me there? In a nutshell , bond market weakness yesterday never made it onto lender rate sheets and this morning's bond market strength was just barely enough to counteract that weakness. We're splitting hairs in...(read more)

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    Created: 10/19/2017 1:10:00 PM
  • Posted To: MND NewsWire

    Home remodeling activity reported by builders increased in the third quarter and remains above the benchmark 50 level for the 18 th consecutive quarter. The National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) rose 2 points to 57 as more builders reported increased market activity compared to the previous period than reported it as lower. NAHB's survey asks remodelers to report current activity overall, and in three areas , major additions and alterations, minor additions and alterations and home maintenance and repairs. The measure of overall activity increased 1 point to 56; the major additions component dipped 1 point to 53, minor additions rose 3 points to 56, and the maintenance and repair category was up 1 point to 58. The survey also looks at future conditions...(read more)

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    Created: 10/19/2017 11:59:28 AM
  • Posted To: MND NewsWire

    A new Bulletin from Freddie Mac makes several changes to its Seller Guide . The most impactful changes relate to the way sellers can calculate student loan debt for inclusion in the monthly payment debt-to-income ratio. Under the current policy, when a seller cannot provide the monthly payment required on a student debt from information on the borrower's credit report, it must obtain other documentation with that information to include in the monthly DTI ratio. The new guideline allows the seller to use credit report information where available, but lacking that, to assume the monthly payment is 0.5 percent of either the original loan balance or the current balance, whichever is greater. Freddie Mac says traditional student loan repayment plans provided for fully amortizing monthly payments...(read more)

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    Created: 10/19/2017 6:42:46 AM
  • Posted To: Pipeline Press

    Yesterday I had some interesting geographic involving the United States that prompted Tony H. to send a few more items. The closest state to Africa? It’s Maine! (Quoddy Head. The largest U.S. city closest to Africa is Boston.) And if one flew directly south from their home in Hickory, NC, one would miss the entire South American mainland – the continent is that far to the east. Vendor Products and Denver Conference Exhibitions "Fundingshield, the leader in loan level wire account settlement party verification, issued an alert of an increased expectation of wire fraud this holiday season based on firm analytics, trends over the past 10 years of data, and the current rise in cyber related system breaches. "The data, clearly points to the fact that the holiday season adds to the opportunity...(read more)

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    Created: 10/19/2017 6:26:51 AM
  • Posted To: MBS Commentary

    The past 3 days were disconcerting for bond markets--especially yesterday, which saw yields move higher at their quickest pace in two weeks. This threatened to reverse the positive trend that looked like it was confirmed by last Friday's CPI-driven rally. But as we discussed in the recap yesterday , 2 simple levels would need to be broken before it was anything other than a consolidative pain trade. What we're left with--for now--is a classic little pain trade for bond bulls; a push back against the obvious technical implications of last week's gains. Until and unless 10yr yields break above key technical ceilings at 2.37% and 2.40%, this is still just a consolidative move, but admittedly a more uncomfortable one than it was 24 hours ago. With the benefit of a few more hours of...(read more)

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    Created: 10/19/2017 5:34:18 AM
  • Posted To: MBS Commentary

    Everything seemed so simple last Friday when bonds were surging past technical barriers in strong volume--ostensibly ringing the dinner bell for more bond buying. The fact that everything seemed so simple was also the biggest risk. Perhaps it was "too simple." Perhaps the technical conclusions were too obvious. The weakness so far this week shows us why. The weakness was easier to brush off as a modest consolidation of last week's strength yesterday. At that time, none of the losses were so severe as to suggest we question the reversal leading back from the high yields seen in early October. If that didn't change today, it became a much closer call. 10yr yields rose more than 4bps and Fannie 3.5 MBS fell a quarter of a point . The selling transpired with precious little justification...(read more)

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    Created: 10/18/2017 1:58:22 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved modestly higher today despite bigger movement in underlying bond markets. In part, this is a byproduct of the way rates behaved at the end of last week, when lenders didn't adjust rates lower as quickly as bond market strength would have suggested. In short, rates are playing it closer to the vest while the bonds that underlie and inform rate movement have been a bit more volatile. Bonds and rates frequently react to economic reports and other news that speaks to the health of the economy or the rate-setting policies of the Federal Reserve. Although we did have a key report on new home construction and several speakers from the Fed today, rates were preoccupied with less overt motivations. One example would be bond traders who decided to sell bonds today simply because...(read more)

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    Created: 10/18/2017 1:13:00 PM
  • Posted To: MND NewsWire

    The U.S. Census Bureau is mum on causation, but results from the southern region would indicate that the August and September hurricanes probably drove declines in both housing permits (except those for single-family residences) and housing starts in September. Both were down by over 4 percent compared to their August numbers, although housing starts had previously been very weak . Housing completions did rise. The Bureau, in conjunction with the Department of Housing and Urban Development, reports that housing permits nationwide were issued at a seasonally adjusted annual rate of 1,215,000, down 4.5 percent from the August estimate of 1,272,000 units. The August number is a revision from the original estimate of 1,300,000. The September results and the August revision dropped the rate of permitting...(read more)

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    Created: 10/18/2017 6:58:53 AM
  • Posted To: MND NewsWire

    Fannie Mae has lowered its third quarter projections for GDP growth by 0.2 percent to an annualized 2.4 percent based on its assessment of the overall impacts of the recent hurricanes. The company's Economic and Strategic Research (ESR) Group says the storms appeared to have slowed consumer spending growth and dragged modestly on consumer and business confidence. They also disrupted home sales, a sector already suffering from tight inventory. The overall economic impacts of the storms are expected to be short-lived so the fourth quarter estimates have been revised up slightly to reflect a rebound in activity and the start of rebuilding efforts. Their GDP growth forecast for all of 2017 remains at 2.2 percent. The ESR is not quite as optimistic about next year. They expect a boost from hurricane...(read more)

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    Created: 10/18/2017 6:51:13 AM
  • Posted To: MBS Commentary

    Ah mid-October... All too often in the 2009-2014 time frame, we'd seen abrupt reversals of trends at this time of month. We haven't really been on the lookout for that old behavior because 2014 seemed to mark a shift in that trend. 2014 itself was easily attributed to the massive sell-off in Chinese stocks. 2015 was mysteriously sideways. And 2016 was understandably sideways ahead of the election. Even in 2017's version of October so far, we haven't seen nearly the same amount of back-and-forth seen in the 2009-2014 time frame, but as of this morning we are arguably seeing the same pattern begin to play out as bonds are abruptly weaker just days after confirming a positive shift. Analysts scrambled to explain the move overnight and there's really no cohesive conclusion....(read more)

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    Created: 10/18/2017 6:43:19 AM
  • Posted To: MND NewsWire

    The volume of mortgage applications increased last week for the first time since early September. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, rose 3.6 percent on a seasonally adjusted basis during the week ended October 13. It did decline 7 percent on an unadjusted basis from the week ended October 6, a week was shortened by the Columbus Day holiday. The week's results included an adjustment to account for that event. The increase in the Composite Index was the result of gains in both refinance and purchase mortgage applications. The seasonally adjusted Purchase Index was up 4 percent compared to the previous week although the unadjusted version fell 6 percent. The Purchase Index was 9 percent higher than during the same week in 2016. Refinancing...(read more)

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    Created: 10/18/2017 6:12:50 AM
  • Posted To: MBS Commentary

    Treasuries and MBS have spent the past 2 days trading well inside the range set by last Friday's volatility (big rally following CPI data). Unfortunately, the central tendency during those 2 days has been toward moderately weaker levels. This casts some doubt on what looked like a clear signal on Friday, but it's too soon to rule out additional gains based on today's trading. After all, bonds did manage to make it back to unchanged in many cases. Fannie 3.5 MBS were perfectly unchanged and 10yr yields ended the day just barely into positive territory. Things looked more bleak around 9am this morning when bonds had taken a noticeable turn toward weaker levels. There were no clear fundamental justifications for the movement at the time (import price data was 20 minutes before the...(read more)

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    Created: 10/17/2017 1:52:07 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were at their best levels in roughly a month last Friday afternoon. Since then, they've risen modestly on each of the past two business days. As has been the case for quite some time, day-to-day movement continues to be very tame. The actual interest rates at the top of loan quotes rarely change from one day to the next. Instead, fine-tuning adjustments to the overall cost of financing come courtesy of slightly higher upfront costs--at least in today's case. In other words, if you were being quoted 3.875% yesterday on a 30yr loan yesterday, chances are you'd be seeing the same rate today, but with upfront costs just a bit higher (or a lender credit that's just a bit lower, depending on the scenario). In the bigger picture, rates are attempting to push lower after rising fairly...(read more)

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    Created: 10/17/2017 12:51:00 PM
  • Posted To: MND NewsWire

    After reacting strongly to Hurricanes Harvey and Irma with a four-point drop in September, the Housing Market Index (HMI) regained its footing in October. The National Association of Home Builders (NAHB) says the HMI, which measures its new home builder member's attitudes toward the new home market gained four points this month, reaching 68, its highest reading since May. Analysts had expected the index, which NAHB cosponsors with Wells Fargo, to remain unchanged from September at 64. "This month's report shows that home builders are rebounding from the initial shock of the hurricanes," said NAHB Chairman Granger MacDonald. "However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages." Derived from a monthly...(read more)

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    Created: 10/17/2017 7:35:38 AM
  • Posted To: MND NewsWire

    It has been a rather dismal spring and summer for construction, one in which permitting has declined in three out of the last four months. Going more granular, however, a report from the National Association of Home Builders (NAHB) finds that residential permitting, and thus construction, is picking up steam in many states. The Census Bureau releases two separate reports covering aspects of residential construction each month. The one MND readers are most familiar with is the Residential Construction Report which provides details on the issuing of building permits, housing starts, and unit completions. It is based on the Survey of Construction and is partially funded by the Department of Housing and Urban Development. The second report focuses primarily on permits and presents data from the...(read more)

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    Created: 10/17/2017 7:26:19 AM
  • Posted To: Pipeline Press

    Does the Fed Chairman make a difference? Yes. Taylor and Powell’s names continue to be mentioned, although Trump is set to interview Janet Yellen Thursday. It wouldn’t surprise anyone if Janet Yellen was being given the boot, unfortunately. Trump must decide whether to risk jarring the markets to ensure deregulation. After all, she is an Obama appointee, and Donald Trump has shown disdain for all things Obama. (More on Yellen in the capital markets section below.) Products and Conferences In correspondent news, AmeriHome's Correspondent Scratch and Dent Program continues to help originators sell loans with origination defects. The AmeriHome program is designed to save clients time and money shopping for buyers and negotiating new contracts by having AmeriHome handle these transactions...(read more)

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    Created: 10/17/2017 6:22:56 AM
  • Posted To: MBS Commentary

    As we discussed last week, the positive technical signals don't get much clearer than they did after Friday's CPI data (weak inflation helped bonds break a floor that had been stubbornly holding for several weeks. At the time, the biggest risk as I saw it was that the positive cues were "too obvious." When there's such a resounding confluence of technical and fundamental input, it makes sense to ask the question: if everyone wants to be a buyer, who are they going to buy from? The weakness seen yesterday (and so far today) is exactly what we risk by following the technicals to the letter. Frustratingly enough, we still haven't seen enough weakness to abandon our hope for a broader shift toward lower rates. That could be a decision for today, however, if bonds end up...(read more)

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    Created: 10/17/2017 6:18:14 AM