Mortgage News Daily

  • Posted To: MBS Commentary

    When it comes to bond markets reacting to economic data these days, don't expect too much and you won't be disappointed. Heading into today's NFP release, it didn't make much sense to expect a major reaction, although there always tends to be more active trading in the few hours following the data. That turned out to be exactly the case today. Bonds began domestic hours in slightly weaker territory--largely as a carryover from yesterday afternoon's weak momentum. That's not an analytical cop-out as much as it's a comment on the absence of motivation in the overnight session and the gradual, thinly-traded nature of the weakness (i.e. move toward higher rates). NFP came out with a stronger payroll count but with weaker wage growth. Even in a month where it would be...(read more)

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    Created: 12/8/2017 2:40:33 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved modestly higher today, although some lenders were right in line with yesterday's levels (especially those who raised rates in response to market weakness yesterday afternoon). Either way, today's rates are pretty darn close to yesterday's and very much inside the recent range. The Labor Department announced that 228k new jobs were created in November, stronger than the median forecast of 200k. These so-called "nonfarm payrolls" add up to the most widely followed metric on the health of the labor market in the US. On most other occasions, the report would create a more meaningful response in rates (which tend to rise when jobs growth is strong). In the current case, market participants are more interested to see how various legislative efforts develop--especially the tax...(read more)

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    Created: 12/8/2017 11:28:00 AM
  • Posted To: MND NewsWire

    After dropping in October from what had been an all-time high the previous month, Fannie Mae's Home Purchase Sentiment Index (HPSI) resumed its upward trek , increasing by 2.6 points in November to 87.8, Strong responses to questions in the National Housing Survey (NHS) to questions about whether it was a good time to buy a home and expectations for home prices were the primary drivers of the index gains. The survey is based on six of more than a hundred questions asked in the monthly NHS survey. Four of the six components gained ground in November. The net share of respondents who said now is a good time to buy a home increased 7 percentage points to 29, erasing the previous month's 6-point drop. The net remains down 1 percentage point compared to the same period last year. The net share who...(read more)

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    Created: 12/8/2017 9:28:33 AM
  • Posted To: MND NewsWire

    Loan limits will be rising in 2018 for loans guaranteed by the FHA. The Department of Housing and Urban Development (HUD) announced on Thursday it was boosting limits for those loans in more than 3,000 counties. This will bring FHA loans in line with those of Fannie Mae and Freddie Mac. The Federal Housing Finance Agency announced new limits for loans eligible for purchase or guarantee by the GSEs on November 28. FHFA calculates limits each year based on median home prices nationally and in individual markets. The GSE limits for 2018 will be $453,100 for conforming loans and $679,650 for jumbo loans in certain high-cost areas. FHA limits differ from but are based on the GSE limits. The Housing and Economic Recovery Act sets the floor for FHA mortgages at 65 percent of the GSE conforming limit...(read more)

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    Created: 12/8/2017 7:34:45 AM
  • Posted To: Pipeline Press

    Trio is a lease with an option to purchase that you can use to finance your new home." Its sister company is Ownoption Mortgage , doesn't appear to be licensed either. And in the Seattle area, Loftium continues to offer a service to provide down payment funds in exchange for a share of future Airbnb income. "Homebuyers who need Loftium's down payment help simply agree to rent out a spare bedroom and share the income with us for 12-36 months after buying their new home." (Questions about the program should be addressed to founders Adam Stelle or Yifan Zhang .) And real estate agents should be aware of a new way to sell a house: Offer Pad , sent to me by Amy Ramsey with First Community Bank. State News California has recently enacted the Building Homes and Jobs Act , effective...(read more)

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    Created: 12/8/2017 6:34:24 AM
  • Posted To: MBS Commentary

    Bond markets haven't been at all keen to react in a major way to economic data. Tax reform and other fiscal issues have been center stage for several months. Even before that, employment metrics had mostly faded from the spotlight, leaving inflation metrics (chiefly, the Consumer Price Index) in favor. Today brings the biggest employment metric of them all in the form of nonfarm payrolls for November. Economists expect a reading of 200k vs 261k previously. The unemployment rate is seen holding steady at 4.1%. These are the employment metrics that have faded from prominence, but there are still two reasons the report could give way to more active trading. The first is that NFP also contains a "wage" component in the form of "average hourly earnings." To whatever extent...(read more)

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    Created: 12/8/2017 5:32:04 AM
  • Posted To: MBS Commentary

    Bond markets began the day roughly unchanged compared to yesterday afternoon's weaker closing levels. From there, Treasuries rallied in concert with European bonds and managed to hold the modest gains through the European close. The implication here is that the net effect of US + European trading was slightly positive for bonds. Subtracting Europe from the equation led to weakness in US bonds, but we can't take cause and effect for granted. There were other market movers in play. These included headlines regarding the government shutdown. The tone was generally conciliatory--or at least not downright hostile--for both sides of the aisle. To whatever extent bonds were benefiting from the risk of a government shutdown, these headlines suggested bond market weakness. One additional fiscal...(read more)

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    Created: 12/7/2017 1:52:37 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were best described as " unchanged " today, although that may not be the case tomorrow. The afternoon hours saw bond markets (which dictate rate movement) come under some pressure. In the grand scheme of things, that pressure reinforces the narrow range we've been watching over the past few months. In the context of today's rate sheets, it was enough weakness for a few lenders to issue "reprices" (mid day rate changes--in this case, higher). Most lenders didn't raise rates today because bond markets didn't weaken enough to justify it. That said, the weakness still occurred, and unless things improve overnight, lenders will need to account for it in tomorrow morning's rates sheets. In other words, we start tomorrow with a bit of handicap, all other things being equal. In the morning...(read more)

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    Created: 12/7/2017 1:17:00 PM
  • Posted To: MND NewsWire

    Nine years after what is acknowledged as the start of the housing crisis about 2.5 million homeowners remain underwater , but that number is down by 0.7 million since the third quarter of 2016. CoreLogic said today that those homeowners remain in negative equity despite rapid increases in the equity of homeowners nationwide. Negative equity applies to borrowers who owe more on their mortgages than their homes are worth, and can occur because of a decline in a home's value, an increase in mortgage debt or both. The company's third quarter 2017 equity analysis shows homeowners with a mortgage (approximately 63 percent of the total) have seen their equity increase by 11.8 percent year-over-year, an average of $14,888 per homeowner and a nationwide aggregate of $870.6 billion. Negative equity nationwide...(read more)

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    Created: 12/7/2017 8:47:06 AM
  • Posted To: MBS Commentary

    Both yesterday and the day before, bonds closed in stronger territory than the previous day's close. That's the first time that's happened since early November, and one of the few times it's happened in several months. The other occurrences in that time frame all acted as mere corrections in a broader move toward higher rates (the move that brought us into the current sideways range). Yesterday's gains also brought yields to the lower end of the consolidative range seen in today's chart inside the teal lines. If the range is the range, then we're supposed to have a tough time making any additional gains today. If, on the other hand, we DO manage to make decent gains, it could be a sign about latent bond buying demand. In order to get very excited about that, we'd...(read more)

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    Created: 12/7/2017 6:23:25 AM
  • Posted To: Pipeline Press

    Upset that Richard Cordray has left the CFPB and is officially running for governor of Ohio ? Bored with lending here, and want to go into the home financing business in Africa? Per AllAfrica, Tanzania leads the pack with mortgage rates at 18% . The U.S. isn't the only country struggling with affordable housing. The proportion of Tanzanian urban households who might afford the cheapest newly built house by a private developer, given current mortgage financing, was only one per cent, lower than Uganda (3%), Rwanda (3%) and Kenya (8%). (See? I read other things beside airline magazines and the National Enquirer.) Servicing Update Pete Mills, SVP, Residential Policy and Member Services with the MBA, sent, "Rob, as a follow on to your recent tutorial on MSRs, I just wanted to highlight a significant...(read more)

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    Created: 12/7/2017 6:20:14 AM
  • Posted To: MBS Commentary

    For the purposes of this recap, "winning streak" would be defined as a day where Fannie 3.5 MBS or 10yr Treasury yields closed at better levels than the previous closing levels. The more days in a row where that happens, the longer the winning streak would be. Without further ado, I present to you the largest winning streak since early November! How many successive days of improvement did it take? Well... just the one. That's right! We actually haven't had a successive day of gains (vs the previous close) since early November. Even then, one might point out that early November gains only came after a late October sell-off to the weakest levels in more than 6 months. In that context, we haven't really had any winning streaks in close to 2 months . This isn't to say...(read more)

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    Created: 12/6/2017 2:26:48 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved noticeably lower today as bond market improved for the 2nd day in a row--the first time that's happened since early November (when it comes to the bonds that relate to mortgage rates) his was the first time since early November. That was reassuring enough that lenders finally adjusted their rate sheets to more than match the market. They haven't been able to do that recently due to the volatility and the general trend toward slightly higher rates over the past 2 months. The average lender continues quoting conventional 30yr fixed rates at 4.0% for top tier scenarios. While that rate hasn't changed for more than 2 months, we have seen the upfront costs move higher and lower. For most lenders, today's upfront costs for any given rate are nearly as low as they were on November...(read more)

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    Created: 12/6/2017 1:48:00 PM
  • Posted To: MND NewsWire

    "Gig," a term that used to refer mostly to a musician's booking, is now being used to describe a whole sector of the U.S. economy. Fannie Mae defines it, rather narrowly we think, as the on-line, on-demand services such as ride sharing and accommodation, and included questions about it in their Third Quarter National Housing Survey . Fannie Mae says its purpose was to understand the extent to which the gig economy is growing and how it might affect attitudes towards homeownership. The survey found that 16 percent of American adults have provided a service through the gig economy. Seven percent report providing ride sharing and the same percentage have provided "services," most commonly child sitting or handy-man services. Five percent have provided accommodation sharing (i.e. AirBnB type hosting...(read more)

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    Created: 12/6/2017 9:31:49 AM
  • Posted To: MBS Commentary

    Consolidating, biding time, coiling, storing energy, etc... Over the years on MBS Live and elsewhere, you may have come into several iterations of this same concept. It occurs when trading levels (in bonds, stocks, or anything else) had been moving in one direction or the other and then settle into a sideways or consolidating range. Remember cars with manual transmissions? Remember learning how to drive them or helping others to do so? These sideways, consolidative weeks/months in financial markets are like the time between shifts for someone who is new to manual transmissions. There's more time than there needs to be where power is disengaged from the wheels. Once the driver starts letting off the clutch, there's more jerkiness than normal. The important point is that the period of...(read more)

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    Created: 12/6/2017 6:43:41 AM
  • Posted To: Pipeline Press

    How long will venture capital firms enjoy being in a declining margin business like residential lending, historically dominated by individual, family, or employee-owned companies? As rumors and unpublished news swirl about well-known lenders losing agency approval, laying off staff, being acquired, or closing their doors, especially west coast wholesalers, there is innovation. “Create Your Profile, Enter Your Loan Programs, Get Quality Leads for Free.” Leads for free? Not known to be consumer facing, yesterday the Scotsman Guide Media introduced Ask a Lender , "a unique online platform that uses powerful lender-matching technology to connect you with quality borrower leads - for free." Technology As the market continues to shift towards home purchases, success won't be about rate...(read more)

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    Created: 12/6/2017 6:17:38 AM
  • Posted To: MND NewsWire

    There was the usual post-holiday resurgence in the volume of mortgage applications last week, following a subdued level of activity the previous week which was shortened by the Thanksgiving Day observance. The Mortgage Bankers Association (MBA) said its Market Composite Index, which measures applications for both refinancing and purchase mortgages, was higher on a seasonally adjusted basis during the week ended December 1, and made one of its outsized swings to recoup losses on an unadjusted basis. The overall composite increased 4.7 percent on a seasonally adjusted basis and was up 47 percent on an unadjusted basis . Compared to the week ended November 24. The prior week's results included an adjustment to account for the holiday. The Refinance Index increased 9 percent from a week before...(read more)

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    Created: 12/6/2017 5:34:17 AM
  • Posted To: MBS Commentary

    Much like yesterday's session, today saw bond markets begin the day in slightly weaker territory only to rally into slightly stronger territory by the end of the session. There were no singular, overt market movers, but rather a slow, steady, linear trend throughout the day. ISM Manufacturing did come in slightly weaker than expected, and I would imagine a few old school market watchers would connect the dots between weaker economic data and a bond rally. I'd normally push back on that old school approach with both hands, but in today's case, we actually did end up seeing a general uptick in volume accompanying a mild leg of the rally shortly after 10am (when the data came out). All that having been said, bonds were still weaker on the day heading into the noon hour. It wasn't...(read more)

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    Created: 12/5/2017 2:35:00 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were more intuitive today with most lenders keeping things unchanged at first. This matched the movement in underlying bond markets, where today's trading levels in the morning (when most lenders put out the first rate sheet) were roughly in line with yesterday's. As the day progressed, however, bonds began to improve steadily. This improvement was enough for many lenders to issue positive reprices in the afternoon (i.e. new, lower rates for the day). While every little bit helps, we're only talking about a token change in most cases. The average borrower will see the improvement in the form of slightly lower upfront costs, with no change in the actual note rate. The average lender continues quoting conventional 30yr fixed rates at 4.0% for top tier scenarios. This hasn't changed...(read more)

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    Created: 12/5/2017 1:58:00 PM
  • Posted To: MND NewsWire

    CoreLogic said on Tuesday that home prices rose in October by 0.9 percent compared to September and were 7.0 percent higher than 12 months earlier. These increases are identical to those registered on the company's Home Price Index (HPI) for September. October was the fourth straight month that the HPI had increased by 0.9 percent. Monthly increases have averaged 1.08 percent over the first 10 months of 2017. The annual change for the year-to-date has averaged 6.87 percent. "Single-family residential sales and prices continued to heat up in October," said Dr. Frank Nothaft, chief economist for CoreLogic. "On a year-over-year basis, home prices grew in excess of 6 percent for four consecutive months ending in October, the longest such streak since June 2014. This escalation in home prices reflects...(read more)

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    Created: 12/5/2017 7:58:47 AM
  • Posted To: MBS Commentary

    A sideways range with higher lows and lower highs... The risk of p eriodic volatility regardless of economic data's suggestion... A certain portion of traders making certain trades simply because they have to hold certain positions through a certain date... All of the above could be said of the November bond market environment most years. This year was no exception. Treasury yields formed a nearly perfect triangle heading into the end of the month. But to whatever extent yields continue finding support at successively lower ceilings (the past 3 days have each seen "lower highs" in terms of intraday 10yr yields), December is shaping up to be very much like November --just with more elbow room. The following chart shows this (potential) phenomenon. The initial uptrend line (lower...(read more)

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    Created: 12/5/2017 6:20:44 AM
  • Posted To: Pipeline Press

    It’s good to keep things in perspective, and here’s some Tuesday trivia. Today, 2 billion adults around the world remain without a bank account, including my ne’er-do-well cousin. But 62% of the world's adult population has an account; up from 51% in 2011. Three years ago, 2.5 billion adults were unbanked . Obviously, the need to have a high credit score is not paramount in their minds, but it certainly invites questions about access to money, how transactions occur, the motivation to have a bank account, the cost of not banking, etc. Fannie and Freddie, or Conventional Conforming Sure the 2018 maximum loan amounts have gone up. But there's plenty of other things going on with the Agencies! Fannie Mae has issued Lender Letter LL-2017-10 to confirm the general and high-cost...(read more)

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    Created: 12/5/2017 6:19:24 AM
  • Posted To: MBS Commentary

    Friday evening brought the passage of the Senate's version of the tax bill. It now moves to a joint session for "reconciliation" (Senate+House trying to craft a final bill before Christmas). As noted in the Day Ahead, unless lawmakers opt to cut their vacations short (which is very uncommon, but technically possible), "by Christmas" means "within 2 weeks." Bonds have done quite a lot to price-in the effects of a tax bill (by moving higher in yield since September) and only had a little more selling to do in honor of the Senate's official vote. Friday's Flynn news was mostly traded by the close of business. The weakness was primarily seen right out of the gate (i.e. early in the overnight session), with the rest of the session being devoted to a gentle...(read more)

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    Created: 12/4/2017 2:01:45 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were distinctly mixed today, with some lenders clearly moving higher while others were effectively unchanged. The deciding factor is both simple and obvious. It has to do with Friday's wild action in the bond market (following the Flynn/Russia news in the morning). That market movement resulted in a handful of lenders reissuing lower rates on Friday afternoon. Those lenders had to move rates back up today because underlying bond markets weren't able to maintain the improvements that resulted in the better rate sheets. Lenders who didn't adjust rates on Friday ended up being in fairly ideal territory for today's bond trading range and thus didn't need to make noticeable adjustments. As for the forces underlying the pull-back in bonds, the Senate's passage of its tax bill likely...(read more)

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    Created: 12/4/2017 1:17:00 PM
  • Posted To: MND NewsWire

    In its Mortgage Monitor for September, Black Knight outlined the first wave of mortgage delinquencies that appeared to be arising out of Hurricanes Harvey and Irma that struck primarily in Texas and Florida in August and September. The Monitor for October updates that data and brings in new information on delinquencies in Puerto Rico, struck a few weeks later by Hurricane Maria. The company found a 31-basis point increase in the non-current rate in those areas affected by Hurricane Harvey. This was in addition to the 16 percent spike that occurred in the weeks following the storm. In addition to an increase of 19 percent in the 30-day bucket, those rolling into 60-days past due increased by 12 percent. The October increase contributed to a near doubling in the delinquency rate, from 5.9 percent...(read more)

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    Created: 12/4/2017 12:11:00 PM