Mortgage News Daily

  • Posted To: MBS Commentary

    Somehow, the bond market managed to end the week at 2.084% (10yr yield) which is exactly where it ended last week. In all my years of market-watching, I've never seen a sharp weekly (like the one we just had in late May) at the end of a sharp multi-month rally give way to 2 straight weeks of fairly flat trading in bonds. To say that this raises the risk of a very big breakout very soon would be an understatement. Today's data was no help in sussing out the direction of such a breakout. Strongly positive revisions to last month's Retail Sales numbers put only modest pressure on bonds early this morning. A huge drop in consumers' 5yr inflation expectations pushed back in the other direction by about as much at 10am. The rest of the day was spent moving perfectly sideways. When...(read more)

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    Created: 6/14/2019 3:27:44 PM
  • Posted To: Mortgage Rate Watch

    While we can't say that this week's best mortgage rate offerings were quite as good as last week's best, they were pretty darn close. In fact, quite a few lenders have simply been quoting the same rates for the entire 2-week period. That happens from time to time, but it never happens after rates make a strong run to the lowest levels in nearly 2 years. Seriously, I can't find any past examples of a similar turn of events. Therefore, it's safe to declare this to be yet another awesome week for rates, even though it's not an awesome week for the average mortgage originator to have much time to sleep, eat, or chill with the fam! Rather than cry for your friendly neighborhood originator, it makes more sense to add to their workload (if you haven't already). With a very important Fed announcement...(read more)

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    Created: 6/14/2019 3:07:00 PM
  • Posted To: MND NewsWire

    Attendees at the Ginnie Mae Summit commemorating the agencies 50 th anniversary on Thursday heard from both Dr. Ben Carson, Secretary of the Department of Housing and Urban Development (HUD) and Dr. Mark A. Calabria, newly confirmed director of the Federal Housing Finance Agency (FHFA). Each addressed their plans for updating their respective housing finance components. Calabria spoke first to the increasing role of non-bank mortgage originators. In 2013, he said, non-banks originated 30 percent of the mortgages sold to one of the government guarantee programs. By February of this year, that footprint had doubled to 60 percent. In 2018 those companies originated roughly 50 percent of all mortgages sold to Fannie Mae and Freddie Mac (the GSEs) and they are now Ginnie Mae's main counterparties...(read more)

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    Created: 6/14/2019 9:59:55 AM
  • Posted To: MND NewsWire

    The House Financial Services Committee (FSC) passed a clutch of bills this week, several of which will assist homebuyers and homeowners. Two directly affect the cost of an FHA loan. The FHA Loan Affordability Act (H.R. 3141), introduced by Dean Phillips (D-MN) would repeal the requirement that borrowers with FHA loans pay premiums on FHA mortgage insurance for the life of their loan. The bill would reinstate the previous policy which allowed borrowers to drop the insurance when the outstanding balance of their loan is reduced to 78 percent of the original value of the home. The wording of the bill appears to specifically disallow consideration of equity accrued through home price appreciation. The bill passed the committee 34 to 25. Another FHA related bill, The Housing Financial Literacy Act...(read more)

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    Created: 6/14/2019 6:08:32 AM
  • Posted To: Pipeline Press

    “The City of Baltimore, Maryland suffered a ransomware attack on May 7, 2019. Due to the attack, the City is currently unable to record documents until further notice. In the interim they are issuing ‘Lien Certificates’. Mr. Cooper is offering the following guidance related to loans closed within the city of Baltimore: ‘ Any loans with title reports that contain title exception language regarding lien certificates will be ineligible until further notice.’ If you have any questions, please contact your Regional Sales Team .” Scary stuff. What if this were to happen to an area that is growing by leaps and bounds? For example, two of the top three largest gaining MSAs from 2010 to 2018 were in the state of Texas, with both Dallas-Fort Worth-Arlington and Houston...(read more)

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    Created: 6/14/2019 6:05:18 AM
  • Posted To: MBS Commentary

    In the day just past, bonds managed to add modestly but meaningfully to a 2.5-day rally that's acted to keep them in a consolidation pattern. After I write the words "consolidation pattern," they're typically followed by the words "ahead of." In the current case, the 4 word phrase that's easiest to assume would be "ahead of the Fed." Sometimes, however, bonds consolidate simply because they've just moved very quickly or by a significant amount, and they just need to catch their breath. In the day ahead, we'll consider other supporting actors that could be advocating this week's consolidation in bonds. From the outset, today's Retail Sales report always deserved honorable mention. Granted, it won't end up having a bigger impact than...(read more)

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    Created: 6/14/2019 5:31:00 AM
  • Posted To: MBS Commentary

    Monday and Tuesday were a bit nerve-racking as it looked like yields might break back above the pre-Mexico-tariff-threat gap in the 10yr yield chart. But bonds bounced well before that happened and have been trending calmly lower ever since. In fact, it doesn't seem to have mattered what the market movers were on any given day. The trend has been the trend, even though we have seem some token responses to the more obvious market movers. Today brought the most recent example with the 30yr bond auction at 1pm. It managed to come in stronger than expected without the need for bonds to do any concessionary selling in advance (not to mention the generally low rates in the bigger picture). Such things only validate the market's decision, desire, and right to be trading in the current range...(read more)

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    Created: 6/13/2019 2:04:49 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved lower for the 2nd straight day, which brings them back in line with Monday's levels. While these aren't quite the lowest rates of the past 2 weeks, they're much closer than they were on Tuesday morning. That means the average lender is nearly able to offer the lowest rates since September 2017! In the slightly bigger picture, underlying bond markets seem to be consolidating after the aggressive move to lower rates 2 weeks ago. In other words, if we can look past some of the recent volatility, the general trend has been sideways for nearly 2 weeks now. This is a good thing because, again, the "sideways" is happening at long-term lows for rates. All things being equal, that's a sign that the market is at least willing to see rates move even lower. Whether or not rates do...(read more)

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    Created: 6/13/2019 1:30:00 PM
  • Posted To: MND NewsWire

    The Mortgage Bankers Association (MBA) released its regular monthly estimates for new home sales on Thursday and also announced a new initiative to promote affordable housing. The initiative, to be headed by Steven O'Connor, MBA's Senior Vice President for Public Policy and Industry Relations, is intended "to help develop stronger and more effective affordable housing partnerships in both the policy and business arenas." The partnership in turn will hopefully "promote more sustainable, affordable homes for purchase and rental for underserved people and communities, especially minorities and low-to-moderate-income Americans." "Housing affordability is an issue facing millions of Americans, both those who rent and those who want to buy a home," said O'Connor. "There is no easy solution. The only...(read more)

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    Created: 6/13/2019 8:30:50 AM
  • Posted To: MBS Commentary

    In the day just past, bonds built on the Tuesday's strength following a correction to the weakest levels in more than a week. 10yr yields briefly made it as low as 2.11% before consolidating in a fairly perfect triangle/pennant for the rest of the day. In the day ahead, bonds continue fighting for more consolidation ahead of next Wednesday's Fed announcement (and press conference and updated economic projections. While Fed policy will ultimately be a function of various economic variables (labor market, inflation, financial stability), the FOMC has a certain degree of latitude in deciding whether to approach its mandates more conservatively or aggressively. The market's current read on the Fed is that they'll be more predisposed to aggressive changes (assuming they see evidence...(read more)

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    Created: 6/13/2019 6:23:27 AM
  • Posted To: Pipeline Press

    At the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the government-sponsored enterprises, or GSEs) are communicating that the optional use period for the redesigned Uniform Residential Loan Application (URLA) form and corresponding datasets will not begin on July 1, 2019 as previously scheduled. It will begin tomorrow! Just kidding. “The effective date of the form will be revised and an updated version will be provided at a later date. Over the coming weeks, FHFA will engage with appropriate stakeholders and agencies to finalize issuance of an updated URLA form, corresponding datasets and a new implementation timeline.” Legacy issues, listening to complaints about the language portion, whatever, stand down for now. More lender/agency news below...(read more)

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    Created: 6/13/2019 5:49:15 AM
  • Posted To: MND NewsWire

    Lenders are singing a happier tune when it comes to their profit margin outlook with those hopes driven by rising confidence in mortgage demand. The net share of lenders' perceptions about both recent and upcoming demand has turned positive for the first time in nearly three years. Fannie Mae's Q2 Mortgage Lender Sentiment Survey saw net positive responses rise across all three loan types (government, GSE-eligible, and non-GSE-eligible loans) when lenders reported on increases in demand for both purchase and refinance mortgages over the previous three months. In all three cases, these measures had reached survey lows in the first quarter of the year. Net positive responses in the second quarter rebounded to reach the highest readings for any second quarter since 2016 for GSE-eligible and government...(read more)

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    Created: 6/13/2019 5:14:00 AM
  • Posted To: MBS Commentary

    Yesterday morning saw bonds weaken enough to cause some small measure of panic among bond bulls. Said bulls had been nodding their heads all last week as they were finally seeing yields that made sense in the context of long-lasting trade wars, tepid economic data, and little incentive on the part of the administration to make any market-saving gestures while stock prices seemed willing to bounce on the simple hope of Fed rate cuts. The issue was that the trade deal announced between the US and Mexico was in the same vein as a market-saving gesture (i.e. bad for rates/bonds). Granted, it's nothing on the order of a US/China deal (largely because there wasn't any major change to the existing US/Mexico deal) but the forbearance of new tariffs was enough to make bonds rethink the rally...(read more)

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    Created: 6/12/2019 1:28:33 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher over the past 2 days, but managed to find their footing today. I'll be the last person to claim interest rates and stock prices must follow one another, but at times, their relationship is the most convenient way to understand the market. Stocks had been rising last week while rates were holding at the lowest levels since September 2017. More than anything, this reflected optimism on both sides of the market surrounding potential Fed rate cuts in 2019. Last Friday provided some important insight. The hotly-anticipated jobs report came out much weaker than expected. That's the sort of thing that would certainly make traders all the more likely to expect Fed rate cuts. Indeed that was the case, but trading levels suggested the bond market had already found its maximum...(read more)

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    Created: 6/12/2019 12:56:00 PM
  • Posted To: MBS Commentary

    In the day just past, bonds initially gave the impression that they were continuing to correct toward higher yields after weekend news of a trade "deal" with Mexico. Markets weren't as interested in the "deal" part (because nothing much changed from the preexisting arrangement) but rather in the fact that the tariffs Trump announced 2 weeks ago would be on hold. Despite initial weakness, bonds rallied steadily throughout the day as big buyers stepped in to snap up the higher yields. A strong 3yr Treasury auction helped. In the day ahead, bonds will get an even more relevant Treasury auction to digest (10yr) at 1pm as they continue to decide what to do between now and next week's Fed announcement. This week's economic data can have a bit of impact along the way...(read more)

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    Created: 6/12/2019 6:20:18 AM
  • Posted To: Pipeline Press

    In the tech world, the question of, “What is real, and what isn’t?” is becoming more of problem to determine than ever before. The latest is in re-programming video and voices to make up whatever is said , just by typing it! Technology is a two-edged sword. What’s going on in the legal profession, technology-wise? “Time’s up. Please put down your No. 2 pencils.” After 71 years, the last time the pencil-and-paper version of LSAT was given was this month. The old-fashioned way to administer the law school entrance exam was left in the dust by other standardized tests that computerized long ago. Yet Philadelphia pulled the plug on its website and e-filing system on May 21 due to a “virus intrusion.” Lawyers are back to old-school methods of...(read more)

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    Created: 6/12/2019 5:45:52 AM
  • Posted To: MND NewsWire

    Mortgage access increased in May for the fifth consecutive month. The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) rose 1.9 percent to 189.5. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The MCAI has two component indices, the Government MCAI which measures the availability of loans backed by FHA, the VA, and the USDA, and the Conventional index which itself has components for both conforming and jumbo loans. The Government MCAI decreased 0.6 percent while the Conventional MCAI was up 4.4 percent driven by a 6.8 percent gain in jumbo lending. The Conforming MCAI rose 0.9 percent. " Credit supply increased 2 percent in May , driven by the fifth straight gain in...(read more)

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    Created: 6/12/2019 5:13:28 AM
  • Posted To: MND NewsWire

    Mortgage applications soared during the week ended June 7 as interest rates declined further. While applications for home purchases were up, it was refinancing that again drove the overall numbers. The week ended May 31 was shortened by the holiday weekend and we have come to expect numbers both during and after those events to take on a life of their own. However, commentary from the Mortgage Bankers Association (MBA) spokesperson Joel Kan indicated it was rates more than the calendar that drove results for both reporting periods. MBA's Market Composite Index, a measure of mortgage loan application volume, increased 26.8 percent on a seasonally adjusted basis from the week ended May 31. On an unadjusted basis, the Index shot up by 38 percent compared with the previous week. The Refinance Index...(read more)

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    Created: 6/12/2019 5:08:00 AM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher again today, even though underlying bond markets were relatively flat. This is due to the timing of market movement over the past 2 days in conjunction with typical mortgage lender pricing conventions. Specifically, bonds weakened steadily throughout the day yesterday. Bond weakness implies higher rates, but not every lender will go to the trouble to adjust their rate sheet offerings unless the move is big enough. Even then, bonds can continue to weaken even after some lenders make mid-day adjustments. The net effect is that the mortgage market begins the subsequent day with a handicap--a certain amount of weakness that will need to be priced in regardless of any additional weakness in bonds. However, if additional weakness happens to show up in the morning, the...(read more)

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    Created: 6/11/2019 11:59:00 AM
  • Posted To: MND NewsWire

    The housing crisis put the spotlight, legal and otherwise, on the ways in which home purchases were financed. Financial difficulties weeded out many marginal players as well as unethical ones in the housing finance space, and new regulations, as well as lawsuits over previous methods of doing business, changed the industry dramatically. Now, attention has turned toward the ways in which those homes are sold, and the companies involved in doing it. Over the last few months there has been some legal activity, mostly directed at multiple listing services (MLS) , the entities that aggregate and display listings of homes for sale. These actions are aimed at determining how real estate sales commissions are established and shared and how this may limit competition.. At present, there are two legal...(read more)

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    Created: 6/11/2019 11:28:38 AM
  • Posted To: MBS Commentary

    In the day just past, bonds traded to their highest yields in more than a week--something that hasn't been too common in the past few months. In fact, yesterday was the most prominent example since mid-April. The culprit was a deescalation of trade war fears as they relate to Mexico, but the technical landscape is just as relevant (i.e. bonds have been decisively overbought for several weeks AND trading at the lowest yields in nearly 2 years). In the day ahead, we'll digest one of the lesser inflation reports in the form of the Producer Price Index . This doesn't typically move markets unless it falls quite far from the consensus. Today's year-over-year core forecast is for a decline to 2.3% from 2.4% previously. We'll also get the first of the week's Treasury auctions...(read more)

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    Created: 6/11/2019 5:30:22 AM
  • Posted To: Pipeline Press

    As I head to Kansas today, I have a great quote. Lenders I visit with are optimistic, raising margins to slow volume based on capacity constraints, and entirely different outlook than a few months ago. James Duncan with Texas’ Thrive Mortgage sent, “Watching a lot of what’s going on frequently reminds me of one of my favorite quotes about our industry. Dartmouth’s John Vogel quipped, ‘The real estate industry is comprised of 10-year cycles and 5-year memories.’ And every month we have dozens and dozens of housing statistics thrown across the airwaves, and yes, they have cycles. In the NAHB’s new Home Building Geography Index, a quarterly measure of building conditions across the country, the “exurbs” (outlying counties of large metro areas...(read more)

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    Created: 6/11/2019 5:17:31 AM
  • Posted To: MBS Commentary

    Bad news for bonds today as Trump shelved the threat of tariffs on Mexico that helped fuel the sharpest leg of the recent rally 2 weeks ago. Perhaps more significant than this particular tariff news is the fact that Trump is showing markets he's willing to make progress much sooner than the average conspiracy theory suggests. What theories are those? They're actually not too conspiratorial. They include things like forcing the Fed's hand in rate cuts due to concern over global growth. More popular still is the notion that Trump's reelection efforts would benefit from the economy decelerating now only to surge into 2020's election. While those options aren't exactly precluded by today's news, they are somewhat easier to question. Most of the bond market weakness was...(read more)

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    Created: 6/10/2019 2:01:14 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates had a fairly epic week last week, spending each day effectively pinned to the lowest levels since September 2017. That followed a swift move lower in the previous week and solid improvements every week since late April. Typically, we see a fairly quick bounce after dropping so rapidly to long-term lows. Last week was exceptional in that the lows managed to stick around for 5 straight days. Things may be changing today. Over the weekend, the bond market (which dictates mortgage rates and interest rates in general) digested news that Mexico tariffs are off the table for now. The initial tariff announcement was a key source of inspiration behind last week's stellar performance so it's no surprise to see rates push back in the other direction as the news is unwound. In the bigger...(read more)

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    Created: 6/10/2019 1:39:00 PM
  • Posted To: MND NewsWire

    The increase in homeowner equity has slightly exceeded the pace of housing appreciation. CoreLogic says that the 63 percent of homeowners nationally who have a mortgage on their property saw their equity grow by 5.6 percent between the first quarter of 2018 and the same quarter in 2019. The national increase in the value of homeowner equity aggregates to nearly $486 billion. On average, homeowners gained about $6,400 in housing wealth during the year that ended in the first quarter of 2019. Nevada had the highest year-over-year average increase at $21,000. The number of homeowners who are upside-down in their mortgage, those owing more to the lender than the market value of their home, is declining, although the cost of that negative equity grew slightly. Underwater properties dipped by 1 percent...(read more)

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    Created: 6/10/2019 7:18:58 AM