MBS RECAP: 2/22/2012

Posted To: MBS Commentary

MBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 103-12 : +0-13 FNMA 4.0 105-08 : +0-08 FNMA 4.5 106-19 : +0-05 FNMA 5.0 108-02 : +0-04 GNMA 3.5 104-27 : +0-13 GNMA 4.0 107-22 : +0-07 GNMA 4.5 109-03 : +0-06 GNMA 5.0 110-29 : +0-03 FHLMC 3.5 103-05 : +0-13 FHLMC 4.0 104-28 : +0-08 FHLMC 4.5 106-06 : +0-07 FHLMC 5.0 107-22 : +0-05 Pricing as of 4:00 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 2:42PM : ALERT: Favorable Technicals For Bond Markets. Additional Positive Reprices We say "additional positive reprices" both in the sense that additional reprices have been reported since the last update and that there's ongoing potential for additional positive reprices at current levels. This afternoon's strength...(read more)

Mortgage Rates Improve But Remain On Fence Between Recent Offerings

Posted To: Mortgage Rate Watch

Yesterday marked the first time since late January that Best-Execution Mortgages Rates stood at 4.0% on average, as opposed to what had been the prevailing average of 3.875%. Rates improved today for most lenders, several of whom once again are offering 3.875% as a "best-execution rate" (learn more about what that means in this previous post with more detailed discussion about Best-Execution calculations ). But a significant portion of the market remains in 4.0% territory. Best-Execution is very much on a fence between the two rates after today's improvements. Apart from the slightly more favorable rate environment, little has changed between yesterday and today. Since Best-Execution is by no means firmly back to 3.875%, the question remains whether or not this will prove to be a brief foray...(read more)

Freddie Mac: Economy on Slow, Steady, Path to Recovery

Posted To: MND NewsWire

In the February Economic Outlook from Freddie Mac's Office of the Chief Economist is projecting a slow, steady path to recovery as the economy, it says, continues to build on the momentum it displayed at the end of last year. The report cites 243,000 new jobs in January, an unemployment rate falling to 8.3 percent and an increase in job openings to 3.4 million in December as indications of improvement. At the same time, there was a relatively low level of 2 million "voluntary separations," i.e. people quitting their jobs, that reflects a nervousness about the job market and a 1.2 percent drop in inflation-adjusted hourly wages, the steepest annual fall since 1989, also signaling job market weakness. The housing sector portion of the Freddie Mac report was a summary of information for the month...(read more)

A Call to Action - FHFA’s Strategic Plan for Fannie Mae and Freddie Mac

Posted To: Voice of Housing

Yesterday the Federal Housing Finance Agency (FHFA) issued to Congress its Strategic Plan for Fannie Mae and Freddie Mac Conservatorships. Acting Director DeMarco and FHFA staff are to be soundly commended for their work in developing and publishing the Plan. The Plan is equally thoughtful and provocative and represents an essential next step in the continuing efforts to resolve the nation’s housing crisis. For example, the Plan acknowledges the critical importance of the technical and business infrastructures currently maintained and managed by the GSEs and without which the effective function of secondary market securitizations would be impossible. Likewise, the Plan notes the critical role of both GSEs in the nation’s continuing efforts to resolve the foreclosure crisis and maintain...(read more)

MBS, Treasuries Extend Gains, Giving Pause to Technical Gloom

Posted To: MBS Commentary

From a technical standpoint, the past few sessions have been a fairly gloomy scene for MBS and Treasuries--our two representatives from those camps being Fannie 3.5 30yr Fixed MBS and good old 10yr Treasury Notes. The technical gloominess should be fairly evident in the upper sections of each chart below. In short, both MBS and 10's had moved weaker beyond the limits of long-term trend channels and were at risk of breaking beyond horizontal levels as well. For Fannie 3.5's, the first major break of a horizontal level at 103-10 was seen Friday on an intraday basis, but prices made it back by the end of the day. Yesterday's trading suggested the breakout more firmly as prices fell to the next major pivot around 103-00. It was (and still is) up to today's price action to reiterate or refute that...(read more)

NAR: Existing Home Sales and Inventories Improved in January

Posted To: MND NewsWire

There was more good news from the National Association of Realtors® (NAR) on Wednesday as they reported that the sales of existing homes rose in January, marking three months out of the last four where sales improved. Inventories of homes for sale were also improved and NAR disputed the need for a program to rent foreclosed properties Total sales of existing homes including single family houses, condominiums, and cooperative apartments, increased 4.3 percent to an annual, seasonally adjusted rate of 4.57 million units during the month compared to a downward revised rate of 4.38 million in December and are 0.7 percent above what NAR described as a "spike" in the rate in January 2011. December 2011 sales were originally estimated at a rate of 4.61 million. The median price of all property...(read more)

MERS Has Second Court Win in Month

Posted To: MND NewsWire

For the second time in just under a month the Mortgage Electronic Registration System ( MERS ) has won a significant court victory. The company which serves as registration agent for major mortgage lenders is currently involved in multiple lawsuits throughout the country. It prevailed in one of these suits, a case filed the U.S. Court for the Western District of Kentucky on Tuesday when Christian County Clerk, by and through its County Clerk, Michael Kem; et al. v MERS; et al. was dismissed with prejudice. The county clerks had sued MERS and a group of MERS members under provisions of the Kentucky laws regarding the recording of deeds. The Plaintiffs asserted, on behalf of all of the state's County Clerks that MERS had violated the statutes in order to avoid recording mortgages and paying the...(read more)

Inspector General Looks at GSE's as Legal Costs Pass $100 Million

Posted To: MND NewsWire

Both before and after they were placed into conservatorship the two government sponsored enterprises Fannie Mae and Freddie Mac (the Enterprises) spent large amounts of money to defend themselves and former senior executives in class action lawsuits and other legal matters. For example, in cases arising out of alleged accounting malpractices in the 2004 to 2006 period, Fannie Mae has advanced $99.4 million for the legal defense of three of its former senior executives. Furthermore, $37 million of those funds have been advanced since the conservatorship began and hence were taxpayer funds and Freddie Mac has paid $10.2 million in legal defense costs for former senior executives since it was placed in conservatorship. In both post-conservator instances the Federal Housing Finance Administration...(read more)

MBS MID-DAY: 2/22/2012

Posted To: MBS Commentary

MBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-05 : +0-06 FNMA 4.0 105-03 : +0-03 FNMA 4.5 106-16 : +0-02 FNMA 5.0 107-31 : +0-02 GNMA 3.5 104-20 : +0-06 GNMA 4.0 107-18 : +0-03 GNMA 4.5 109-01 : +0-04 GNMA 5.0 110-27 : +0-02 FHLMC 3.5 102-29 : +0-05 FHLMC 4.0 104-23 : +0-03 FHLMC 4.5 106-02 : +0-03 FHLMC 5.0 107-19 : +0-02 Pricing as of 11:00 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 10:04AM : Existing-Home Sales Rise Again in January, Inventory Down - NAR Existing-home sales rose in January, marking three gains in the past four months, while inventories continued to improve, according to the National Association of Realtors®. Total existing-home sales1, which are completed transactions that...(read more)

Fannie and Freddie Future Plans; NMLS Licensee Stats on the Rise

Posted To: Pipeline Press

Under the title, "Too much time on one's hands", anyone involved in the residential construction/remodeling business might find this, uh, interesting . Hiring in the "mortgage space" continues. Altisource's Origination Services Division is currently hiring DE Underwriters in Missouri, Texas and Ohio to support its growing Correspondent and Quality Control businesses. Altisource is a "global provider of services focused on high value, knowledge-based functions principally related to real estate and mortgage portfolio management, asset evaluation and customer relationship management." Any interested parties should forward their résumé to amy.boblet@altisource.com. I have been retained by an Orange County, California-based lender that is looking for a highly skilled director/manager...(read more)

Mortgage Applications Slow as Average Rates Rise

Posted To: MND NewsWire

Mortgage applications decreased during the week ended February 17 according to the Weekly Mortgage Applications Survey released this morning by the Mortgage Bankers Association (MBA), The Market Composite Index measuring the volume of applications decreased 4.5 percent on a seasonally adjusted basis and 3.6 percent unadjusted from the week ended February 10. The Refinancing Index declined 4.8 percent while the volume of applications for home purchases decreased 2.9 percent on a seasonal adjusted basis. The unadjusted Purchase Index was 1.4 percent lower than the week before and down 9.2 percent from the same week in 2011. Applications for refinancing composed 80.1 percent of all applications compared to 81.1 percent the previous week. The four week moving average of the seasonally adjusted...(read more)

The Day Ahead: Existing Home Sales and Week's Most Important Auction

Posted To: MBS Commentary

As readers may be aware, we're rather fond of being close to utterly dismissive of 2yr Treasury Note Auctions as significant market moving events for the sections of the MBS Coupon Stack that most directly apply to lender's rate sheets. This has been true since the original "2013 verbiage" hit the streets in the August 2011 FOMC Announcement. Ah, those were the days... They grow up so fast, don't they? Now we have "late 2014 verbiage" and the short end of the yield curve is just as glued into place as ever. In other words, 2yr auctions are more a matter of housekeeping whereas the longer maturities are more informative and of more consequence, especially to production MBS. While 10yr Notes generally take the cake in terms of market-moving potential, 5yr Treasuries are no slouches--a perennial...(read more)

MBS RECAP: 2/21/2012

Posted To: MBS Commentary

MBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 102-30 : -0-03 FNMA 4.0 104-31 : -0-01 FNMA 4.5 106-14 : +0-01 FNMA 5.0 107-30 : +0-01 GNMA 3.5 104-16 : +0-00 GNMA 4.0 107-16 : +0-03 GNMA 4.5 108-30 : +0-03 GNMA 5.0 110-26 : +0-01 FHLMC 3.5 102-25 : +0-02 FHLMC 4.0 104-21 : +0-02 FHLMC 4.5 106-01 : +0-03 FHLMC 5.0 107-18 : +0-01 Pricing as of 4:00 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 2:14PM : Boston Fed sought cut in discount rate in Jan (Reuters) - The Boston Federal Reserve unsuccessfully wanted in January to trim the rate the Federal Reserve charges banks for emergency loans, in part to align the so-called discount rate with the rate the Fed charges foreign central banks for dollar swaps...(read more)

Best-Execution Mortgage Rates Rise For First Time in a Month

Posted To: Mortgage Rate Watch

For the first time since late January, Best-Execution Mortgages Rates moved back to 4.0%. Over the past month, the rate averaged 3.875% despite plenty of fluctuations in terms of closing costs. Friday's weakness brought the average of the lenders we survey as close to the 4.0% mark and today's weakness in the bond markets resulted in more lenders offering 4.0% as a best-execution rate, although 3.875% remains at a few of the more aggressively-priced lenders. Additional reading: A previous post with more detailed discussion about Best-Execution calculations. Last week, we discussed Monday's upcoming meeting and vote on the Greek bailout as a potential high-risk event for mortgage rates. Indeed there was never much of a chance that this would NOT be the key market mover to start the current week...(read more)

FHFA Sends Congress Strategic Plan for GSEs

Posted To: MND NewsWire

The Federal Housing Finance Agency (FHFA) said Tuesday that, with its conservatorship of Fannie Mae and Freddie Mac (the Enterprises) now in operation for more than three years "and no near-term resolution in sight," it was time to assess its goals and directions. In a letter submitted to the chairs and ranking members of the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs, Acting FHFA Director Edward J. DeMarco set out a Strategic Plan for Fannie Mae and Freddie Mac Conservatorships with three goals: Build a new infrastructure for the secondary mortgage market; Gradually contract the Enterprises' dominant presence in the marketplace while simplifying and shrinking their operations; Maintain foreclosure prevention activities and credit availability...(read more)

Bond Markets Search For Support After Greek Bailout Vote

Posted To: MBS Commentary

It's getting to be fairly popular to dismiss the ongoing efforts to stave off a default in Greece as "can-kicking," etc. We're guilty of this, but remain generally in agreement that can-kicking is one of the best ways to describe what's going on. We're not under any delusions that any "positive" outcome in any similar present or future negotiations is more appropriately seen as an "absence of a more negative outcome." Indeed, restoring Greece to an ideal level of fiscal health is not on the table any time soon. It's all about avoiding catastrophe. But a certain measure of catastrophe has been priced into recent phases of domestic bond market bullishness. So whether yesterday's passage of the Greek Bailout amounts to can-kicking or not, it's "something more" than we had on Friday, and thus a...(read more)

MBS MID-DAY: 2/21/2012

Posted To: MBS Commentary

MBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-05 : +0-05 FNMA 4.0 105-04 : +0-04 FNMA 4.5 106-16 : +0-03 FNMA 5.0 107-31 : +0-02 GNMA 3.5 104-21 : +0-05 GNMA 4.0 107-18 : +0-05 GNMA 4.5 109-01 : +0-06 GNMA 5.0 110-28 : +0-03 FHLMC 3.5 102-29 : +0-06 FHLMC 4.0 104-23 : +0-04 FHLMC 4.5 106-01 : +0-03 FHLMC 5.0 107-21 : +0-04 Pricing as of 11:00 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 10:58AM : ALERT: Relatively Heavy Volume Moving Bond Market Relatively Sideways Trading so far this morning is doing its best to appease two considerations. On the one hand, there's the fact that "something" happened with respect to the Greek bailout vote. On the other hand, "something"...(read more)

LPS Previews January Delinquency Data

Posted To: MND NewsWire

In its Monthly Mortgage Monitor Report Lender Processing Services (LPS) will report that the national delinquency rate , loans that are 30 days or more late, but not in foreclosure, decreased 2.2 percent in January to 7.97 percent. This is a drop of 10.5 percent from the rate in January 2011. The total number of loans in the 30+ day delinquent category nationwide is 3,998,000. Of those loans a total of 1,772,000 are seriously delinquent, that is 90+ days overdue but not yet in foreclosure. The foreclosure inventory, loans that are in the process of foreclosure continues, to rise and is 1.1 percent higher than in December at 4.15 percent. This is 1 basis point below where it was one year earlier. Loans in foreclosure now number 2,084,000. The total of mortgage loans that are at least one payment...(read more)

Default Rates Head Down Again

Posted To: MND NewsWire

After four straight months of increases The S&P/Experian Consumer Credit Default Indices fell in January as did the four loans types that make up the composite. The Default Index dropped from 2.24 percent in December to 2.16 percent in January. In January 2011 the index was at 2.90 percent. Much of the decrease among the component indices was from the first mortgage component which dropped from 2.19 percent in December to 2.08 percent in January and was down significantly from the 2.86 percent level of one year earlier. The default rate for second mortgages decreased from 1.33 percent to 1.30 percent and bank cards from 4.60 percent to 4.57 percent; those rates were 1.51 percent and 6.13 percent respectively in January, 2011. Auto loans were unchanged at 1.27 percent but down from 1.58...(read more)

Clearing Up Some G-fee and HARP 2.0 Confusion; More Conferences and Companies Expanding

Posted To: Pipeline Press

Welcome to Fat Tuesday, or Mardi Gras, a rowdy day of hedonism where shipping departments across the nation have great parties and throw bead necklaces at underwriters. Lent begins tomorrow and ends Thursday, April 5 (two weeks prior to the MBA's National Advocacy Conference is April 18-19 in Washington DC) - perhaps lawmakers will give up creating laws about mortgage banking for Lent. One thing not being given up for Lent is hiring. 1st Advantage Mortgage is looking to grow its origination channel by adding seasoned retail loan originators and origination branches. Licensed in 22 states, 1st Advantage Mortgage, a Draper and Kramer Company headquartered in Lombard, IL, has a strong presence in the Midwest and is targeting originators and branches in Texas, Iowa and Minnesota in addition to...(read more)

The Day Ahead: Digesting Greek Bailout With Auction Supply and Limited Data

Posted To: MBS Commentary

Bond markets are slightly weaker from Friday's latest levels as the Greek bailout that has been the markets focal point for several weeks, was technically approved early this morning in Europe (yesterday evening in terms of EDT). The initial announcement hit just before 7pm last night and there was a predictable jolt of volume and move higher in yields for bond markets. Slightly surprising however, was just how limited the weakness was. We could have easily imagined that 10 yr yields, for instance, might see fit to revisit some of their recent highs, but they never broke 2.05, while yields were several bps higher on 2/9, and slightly higher still in late January. Here's a good overview of the bailout details from Reuters : (Reuters) - Euro zone finance ministers sealed a 130-billion-euro (...(read more)

MBS RECAP: 2/17/2012

Posted To: MBS Commentary

MBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 103-11 : -0-02 FNMA 4.0 105-06 : -0-03 FNMA 4.5 106-17 : -0-03 FNMA 5.0 107-31 : -0-01 GNMA 3.5 104-26 : -0-03 GNMA 4.0 107-22 : -0-02 GNMA 4.5 109-02 : -0-03 GNMA 5.0 110-31 : +0-04 FHLMC 3.5 103-02 : -0-02 FHLMC 4.0 104-25 : -0-03 FHLMC 4.5 106-03 : -0-02 FHLMC 5.0 107-20 : +0-00 Pricing as of 4:00 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 3:16PM : ALERT: Bearish Bias Dries Up After Hours, Still Sideways Just a quick update to moderate the negative reprice report from the previous alert. MBS stayed within the day's range and bounced higher following the 3pm close. 10's and MBS have improved into the "going out" hours (from 3-5pm...(read more)

Mortgage Rates Continue Higher Ahead of High-Risk Weekend

Posted To: Mortgage Rate Watch

Mortgages Rates are higher for the 2nd day in a row. Unlike the movement we normally see, which limits itself to affecting closing costs as opposed to the quoted rates themselves, today's deterioration leaves 4.0% looking like the better deal for enough lenders that we'd make a note of it's increasing prevalence, although the average across all lenders in our survey is still closer to 3.875%. Additional reading: A previous post with more detailed discussion about Best-Execution calculations. Weakness aside, today was fairly quiet for the MBS market (MBS = mortgage-backed securities, which most directly influence the rates offered by mortgage lenders) as well as Treasuries. Most of the activity was seen in the early morning after the European Central Bank said that it might allow the central...(read more)

MBS MID-DAY: 2/17/2012

Posted To: MBS Commentary

MBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-11 : -0-03 FNMA 4.0 105-07 : -0-03 FNMA 4.5 106-17 : -0-02 FNMA 5.0 107-31 : -0-01 GNMA 3.5 104-27 : -0-02 GNMA 4.0 107-22 : -0-02 GNMA 4.5 109-03 : -0-02 GNMA 5.0 110-28 : +0-01 FHLMC 3.5 103-03 : -0-02 FHLMC 4.0 104-26 : -0-02 FHLMC 4.5 106-03 : -0-02 FHLMC 5.0 107-20 : +0-00 Pricing as of 10:59 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 9:34AM : ALERT: Bond Markets Search For Support After New ECB Headlines Bond markets are trying to find their footing this morning after yesterday's weakness extended through the overnight session. News that the ECB may go one step further than yesterday's bond-swap deal and actually allow Greek bonds...(read more)

Provident and Condos; Startling Utah Stats; Promising Signs for US Economy - Will Rates Creep Up?

Posted To: Pipeline Press

Yes, Wells Fargo's CEO's was on CNBC this morning talking about the mortgage markets. Investor news is rarely "headline grabbing," but also this morning Provident Funding , often the nation's leading wholesale operation, turned some heads and notified brokers this morning ahead of this three day weekend, "Effective immediately for new locks, condominiums are now unacceptable properties except for high rise condominiums located in Chicago, Honolulu, San Francisco and Seattle. Existing locks will be honored and allowed lock extensions. Please refer to the updated Program Guidelines for complete details." (Editor's note: I received it from a few folks - I hope it is not some kind of prank.) The land of Alta & Snowbird, the Bonneville Salt Flats, mountain bike riding in Moab, and... Nearly...(read more)