Mortgage News Daily

  • Posted To: MBS Commentary

    June began with yields plateauing after rising from the Italy-inspired lows of late May. 10yr yields managed to avoid breaking above 3% until last week's much-anticipated Fed Day. Even then, the Fed and the ECB ultimately gave way to the slow, steady rally that's persisted into the current week. Until today, that rally was nice, but forgettable, as it merely got us back in line with the lowest levels of the narrow range seen so far this month. Today's rally is arguably forgettable as well. It hasn't marked a meaningful departure from the pace of the past few sessions. In fact, the domestic trading hours were just as boring as yesterday's. The only difference today is that we started with a bit of a lead thanks to overnight trade war headlines. As soon as Chinese equities...(read more)

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    Created: 6/19/2018 1:15:58 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates didn't move much today, despite a somewhat decent improvement in bond markets. Overnight, trade war brinksmanship between the US and China had investors seeking the safe haven of bond markets. Excess demand for bonds pushes rates lower, all other things being equal. As is often the case with safe haven trades, US Treasuries saw more of the benefit than the bonds that underlie mortgage rates. The net effect is a move back in line with last Friday's levels for the average mortgage lender. Loan Originator Perspective Bond markets rallied as trade war fears grew today. Tariffs hurt economic growth, and boost bonds. I'm not sure rate sheets reflect the improvements yet, will float today's loans overnight and hope gains get passed along. - Ted Rood Talks of a Trade War continue to...(read more)

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    Created: 6/19/2018 12:19:00 PM
  • Posted To: MND NewsWire

    The White House announced on Monday the nomination of Kathy Kraninger as head of the Consumer Financial Protection Bureau (CFPB) to replace acting director Mick Mulvaney. The appointment caught many in Washington by surprise as Kraninger is not widely known and has not previously been active in the consumer arena according to many reports. Kraninger has been an associate director at the Office of Management and Budget (OMB), which Mulvaney also serves as director, for about a year. At OMB she oversees $250 billion in funding for seven cabinet departments and 30 agencies, including the Department of Homeland Security. Her previous role was as a staff member of the Senate Appropriations Subcommittee on Homeland Security. She has also worked for the Department of Transportation. Looking beyond...(read more)

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    Created: 6/19/2018 8:27:38 AM
  • Posted To: MND NewsWire

    Residential construction data was mixed for May as reported on Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development. Housing starts recovered strongly from their April loss while permits continued lower. Housing starts were at a seasonally adjusted annual rate of 1,350,000, a 5.0 percent improvement from April's revised, (from 1,287,000) 1,286,000 units. The May number was up 20.3 percent from the estimate reported for last May of 1,122,000 housing starts. Starts were right at the top of the estimates provided by analysts to Econoday . They were looking for results in the range of 1,270,000 to 1,350,000 with a consensus of 1,320,000. Construction was begun on a seasonally adjusted 936,000 single family houses, a 3.9 percent month-over-month gain and up 18.3...(read more)

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    Created: 6/19/2018 6:59:03 AM
  • Posted To: Pipeline Press

    When I grow up I want to live in a ranch style… shipping container? If you have a builder complaining about lumber costs or labor to frame a house, there’s always metal. “From rooftop decks to custom wood floors, these repurposed shipping containers are anything but boring.” Air conditioning is a must, and the Hapag-Lloyd sign on the side might add character. In other housing news, we have this headline from Florida: “Freedom Mortgage CEO drops $20M on Ocean Ridge Estate.” Nice digs! Upcoming Training and Events Freddie Mac is offering up a, “Discover the Possibilities with Home Possible Mortgages” webinar on June 20th. (Home Possible and Home Possible Advantage are Freddie Mac’s low down payment offerings.) “Join us for this free...(read more)

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    Created: 6/19/2018 5:59:41 AM
  • Posted To: MBS Commentary

    You're welcome! I knew if I lamented the slow and boring nature of the week ahead yesterday that I could trick the bond market into doing something exciting. Sure, it was a 50/50 chance that my little ploy could backfire, but at least there would be something exciting to talk about. And now here we are with 10yr yields staring the day down more than 4bps. Fake superstitions aside , bonds have quickly found some inspiration on what began as a dud of a week. As Asian markets returned from yesterday's holiday absence, the blossoming trade tensions between the US and China took a toll on equities markets and helped bond yields move lower. With the help of a bigger jump during the very first hours of overnight trading in Asia (during which, Treasuries are not trading on the cash market)...(read more)

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    Created: 6/19/2018 5:57:01 AM
  • Posted To: MND NewsWire

    Despite a slowing rate of economic growth in the second estimate for the first quarter, Fannie Mae's economists are holding firm in their forecast for the remainder of the year. The second preliminary estimate for the quarter was for growth of 2.2 percent, down from the initial estimate of 2.3 percent and off by 0.7 point of the expansion in the fourth quarter of 2017. Fannie Mae's Economic and Strategic Research Group however continue to look for 2.7 percent growth this year, followed by 2.3 percent in 2019. They hedge their predictions with both upside and downside risks. Among the former are potential acceleration of business investment. There are indications of this in the newest report by way of upward revisions to investments in structures, equipment, and intellectual property products...(read more)

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    Created: 6/19/2018 5:35:12 AM
  • Posted To: MBS Commentary

    These sorts of days (where nothing happens) happen. If you had to bet on a day of the week and a time of year to see them, Summertime Mondays would probably be the safest bet. Overnight volume was almost nonexistent, with much of Asia closed. Domestic volume and volatility was effectively nil with today's trading range falling easily inside Friday's. On a positive note, despite the low volume, any day where bonds begin a new week holding onto gains from the end of the previous week is better than nothing. In that sense, the fact that yields remained well under Friday's 2.937% ceiling in 10yr Treasuries was better than the alternative. That said, I'd look at it more like an unofficial 3rd day of the weekend than a new and meaningful trading session. MBS Pricing Snapshot Pricing...(read more)

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    Created: 6/18/2018 1:30:12 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were sideways to slightly higher today, depending on the lender. The underlying bond market (which dictates rates) was exceptionally quiet. On the heels of last week's important events and without much on the calendar this week, markets may take a couple days to relax. To put that in context, rates have been holding somewhat steady just below long-term highs. Their next major decision will be between pushing into new long-term highs or attempting to move lower for more than just a week or two. "Relaxation," in this context, means we're not likely to see evidence of either this week. Loan Originator Perspective Bonds coasted through a flat session Monday as rates hovered near unchanged. There's scant meaningful data this week to inform markets, I'll be surprised to see much movement...(read more)

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    Created: 6/18/2018 12:58:00 PM
  • Posted To: MND NewsWire

    Builder confidence in the market for new single-family homes ended a three-month slide in May , as the Housing Market Index ticked up two points. This month that two-point gain evaporated as the index slid back down to 68. The National Association of Home Builders (NAHB) said the retreat of the measure, which it sponsors in conjunction with Wells Fargo, in June was, in large part, due to elevated lumber prices. "Builders are optimistic about housing market conditions as consumer demand continues to grow," said NAHB Chairman Randy Noel. "However, builders are increasingly concerned that tariffs placed on Canadian lumber and other imported products are hurting housing affordability . Record-high lumber prices have added nearly $9,000 to the price of a new single-family home since January 2017...(read more)

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    Created: 6/18/2018 7:22:00 AM
  • Posted To: MBS Commentary

    Post-Italian drama, bond yields rose for 2 straight weeks heading into last week's Fed and ECB announcements. They both proved friendly and the positive momentum continued on Friday. The timing of the Italian drama was important because it began helping bonds right as US 10yr yields were hitting 7-year highs. As yields rose back toward those highs early last week, it was fair to wonder if Italy had merely delayed a move to even weaker levels. The response to last week's central bank events suggested--if not proved --that bonds don't need to re-test high ceilings just yet. Moreover, there may even be a chance to rally. To reiterate a word of caution I've offered a few times, the fundamentals--at the very least--would not make a sustained rally easy. It's the sort of thing...(read more)

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    Created: 6/18/2018 6:16:59 AM
  • Posted To: Pipeline Press

    Rumors continue to swirl. Will a top-10 bank really terminate hundreds, possibly a thousand, of its retail originators in late July/early August for not meeting minimum production standards? Is Houlihan Lokey out there marketing a well-known company (a provider of compliance outsourcing solutions to lenders and servicers) to Radian, Black Knight, or overseas firms? Are hundreds of lenders engaged in small-scale unpublicized layoffs to eliminate overstaffing? Maybe I am merely making this stuff up. Maybe not. Lender Products and Services The American Bankers Association announced its endorsement of Built Technologies, a Nashville-based fintech company focused on simplifying the administration of residential and commercial construction loans through secure, cloud-based software. Built’s...(read more)

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    Created: 6/18/2018 5:51:52 AM
  • Posted To: MND NewsWire

    Americans are sitting on a nearly unprecedented level of untapped wealth - or maybe sitting IN it is more to the point. A report from Black Knight notes the first quarter of this year saw the "tappable" equity Americans have in their homes rose at what could be a record pace. The company says tappable equity growth is a different metric than simple equity growth as it is the amount that homeowners can actually use. That is, it is the amount of a home's value that can be borrowed against before reaching a combined loan-to-value (CLTV) ratio of 80 percent. Tappable equity grew by $380 billion in the first quarter of 2018. That 7 percent increase is the largest single quarter growth in Black Knight's records, which go back to 2005. Equity growth is usually greatest in the first and second quarters...(read more)

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    Created: 6/18/2018 5:27:47 AM
  • Posted To: MBS Commentary

    Fresh fears of trade wars pushed stocks and bond yields lower in the overnight session as the White House promised another wave of tariff announcements in the morning. China retaliated by promising its own tariffs and markets slumped accordingly. By "accordingly," I mean they slumped as much as they have for any other trade war headline after the initial shock wore off--i.e. not too terribly much. Case in point, stocks ended up bouncing back and nearly erasing all of the losses. Bonds, on the other hand, got a bit of an extra boost from the overall momentum following 2 decent days of central bank news, as well as weaker economic updates out of Europe overnight. 10yr yields rallied all the way to 2.889 before bouncing up to 2.922% by the close (still 2.4bps lower on the day). MBS underperformed...(read more)

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    Created: 6/15/2018 2:35:59 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates fell again today, bringing the average rate just slightly lower on the week. Unlike the past 2 days, there were no big ticket calendar events today. Instead, motivation came from market jitters of new tariff announcements and the ensuing retaliation from China. Markets ultimately decided it wasn't the end of the world (yet) and bounced back in the other direction (higher stocks, higher rates) during the 2nd half of the day. Fortunately, the bounce in rates (via the bond market) wasn't big enough to force mortgage lenders to adjust their rate sheets for the worse. That knife cuts both ways though. If bonds were to merely hold flat by the start of Monday's trading, the implication would be for slightly higher rates to begin the day. Loan Originator Perspective Rally makes it time...(read more)

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    Created: 6/15/2018 2:22:00 PM
  • Posted To: MBS Commentary

    Bond markets have their rally caps on after making it through both central bank announcements this week without suffering any crazy damage. In fact, each day brought modest improvements and now today stands the chance of bringing enough of a rally to "confirm" those improvements from a technical standpoint. That's about the size of it at the moment. We're watching and waiting with fingers crossed. It's much the same as a sporting event where our team just made a good defensive stand and now has the ball on offense . They may or may not score, as always, but it's nice to have a chance! The only thing that troubles me about rooting for a bigger rally is that the justification for sustained improvement will be really hard to come by without something changing about the...(read more)

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    Created: 6/15/2018 6:37:57 AM
  • Posted To: Pipeline Press

    Taking a tour around the nation…No one has ever used the term “bespoke” in describing any place I’ve stayed. I barely know what it means. But if you’ve got the bucks, and want a nice place to bunk down in Hawai’i, here you go . Marlin jerky? 5,100 miles and six time zones away, a Martha’s Vineyard house that the Obamas have vacationed in sold for $15 million , $7.5 million under original asking. Falling demand on the high-end? In-between, here’s an article on the lay-offs to expect in the Dallas-Fort Worth lending industry. But Freddie Mac announced a new partnership with re-employment solutions company NextJob to provide job search assistance to current and aspiring homeowners living in high-needs and other persistent poverty areas . Digital...(read more)

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    Created: 6/15/2018 5:59:19 AM
  • Posted To: MBS Commentary

    We knew the ECB (European Central Bank) was going to have to address its bond buying program soon, because it expires after September. Several speakers had alluded to the likelihood that it would be addressed in today's announcement. Markets took that to mean that Draghi would finally talk about the probable tapering announcement at the subsequent meeting. Instead, the ECB just went ahead and pulled the trigger --several months in advance. In other words, they will indeed continue buying bonds through September. They'll buy half as many over the next 3 months and then be done by 2019. This eventuality was somewhere in the realm of the market's expectation, even if we weren't planning on confirming it so soon. The early announcement caused a bit of bond market weakness at first...(read more)

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    Created: 6/14/2018 1:15:57 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved LOWER today, following a policy announcement from the European Central Bank (ECB). That claim runs counter to almost any other mortgage rate headline in the mainstream news because big media is in the habit of quoting Freddie Mac's weekly rate survey. That's not necessarily a bad thing as long as you understand the underlying timelines. Unfortunately, most news outlets gloss over those important details or leave them out completely. Specifically, Freddie's survey is heavily weighted toward responses that come in on Monday and Tuesday, even though Wednesday is also technically included. Thursday and Friday are never counted. That means that any rate volatility that hits during the second half of the week typically isn't captured in Freddie's numbers. Long story short , because...(read more)

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    Created: 6/14/2018 12:22:00 PM
  • Posted To: MND NewsWire

    The Mortgage Bankers Association (MBA) is projecting a decline in new home sales in May. Its computation is based on information from its Builder Application Survey (BAS) which collects information on mortgage applications for new home purchases from the mortgage subsidiaries of home builders nationwide. Their non-seasonally adjusted BAS data indicates that applications were down by 4.0 percent from April and by 0.5 percent compared to the previous May. Based on this information and other information regarding market coverage and other factors, MBA estimates that new homes were sold in May at a seasonally adjusted annual rate of 626,000 units. This is down 4.6 percent from the April rate of 656,000 units. Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting, said, "Despite...(read more)

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    Created: 6/14/2018 11:24:13 AM
  • Posted To: MBS Commentary

    Today's domestic session begins with a positive reaction to the European Central Bank (ECB) announcement. The ECB broke from tradition by dropping their bigger bombs at the 7:45am announcement as opposed to Draghi's 8:30am press conference. They also arguably dropped the proverbial mic in a way we haven't often seen by making definitive statements about bond buying and rates well in advance of any changes. Specifically, the ECB will taper its bond buying purchases by 50% in Oct-Dec, and then be done buying new bonds. They'll still be reinvesting proceeds until further notice and they won't be considering a rate hike until the summer of 2019. At first glance, the tapering announcement seems like a problem for bond markets. In fact, it did cause a bit of initial weakness,...(read more)

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    Created: 6/14/2018 6:00:37 AM
  • Posted To: Pipeline Press

    The U.S. Bureau of Labor Statistics projects increasing customer usage of technology will reduce the number of bank tellers by 42,000 through 2026. Given their average pay is a little over $2k per month, I can see why some of the smarter ones are being wooed and hired as loan officer trainees. (And yes, the BLS mentions loan officer forecasts .) While we’re talking about banks, and possible good news for them, Goldman Sachs analysts believe Amazon won’t go so far as to open a bank , due to the extra regulatory scrutiny and credit risk. Amazon, however, will likely continue to provide supplementary financial services and it has partnered with various banks on their financial products already, and has a large pool of customers for financial products. Lender Products and Training Learn...(read more)

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    Created: 6/14/2018 5:53:47 AM
  • Posted To: MBS Commentary

    In one sentence, today's Fed rate forecasts pushed bonds into weaker territory at 2pm and Jerome Powell's press conference helped to recover most of the losses. The forecasts showed a slightly higher probability of 4 rate hikes in 2018. The average "dot" (so named for the dot plot on which the forecasts appear) also moved a hair higher in 2019 and 2020. This was the key market mover at 2pm, even though the Fed announcement was heavily edited from its previous version. It probably didn't help that most of the edits were easier to argue as "unfriendly" for bonds. That said, it would be harder to argue they were unexpected or unjustified. Powell's press conference saw bonds bounce back and recover most of the losses, starting at 2:30pm. He said he wasn't...(read more)

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    Created: 6/13/2018 2:52:59 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher today, following the Fed's much-anticipated policy announcement. Although the Fed changed quite a few words from the announcement's previous iteration (far more than normal), it wasn't the announcement itself that did the damage. Rather, it was the Fed members' economic projections, which include an assessment of where the Fed Funds Rate will likely be at the end of the next few years. Specifically, a few of the Fed members who'd been holding out for slightly lower rates in 2018 moved their forecasts up enough to increase the odds of a 4th rate hike by December. This was already a strong possibility, but before today, those in the "3 hike" camp had a stronger case. While the Fed's rate doesn't directly affect 30yr fixed mortgage rates, shifts in the Fed's rate hike...(read more)

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    Created: 6/13/2018 2:18:00 PM
  • Posted To: MBS Commentary

    Information received since the Federal Open Market Committee met in MarchMay indicates that the labor market has continued to strengthen and that economic activity has been rising at a moderatesolid rate. Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.declined. Recent data suggest that growth of household spending moderated from its strong fourth-quarter pace,has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent. Market-based measures of inflation compensation remain low; survey-based measuresIndicators of longer-term inflation expectations are little changed, on balance. Consistent with its...(read more)

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    Created: 6/13/2018 11:05:25 AM