MBS RECAP: A Fitting End to 2013: Relentless Enigmatic Weakness

Posted To: MBS Commentary

On many occasions in 2013, I've referred to weakness as “seemingly inexplicable.” This rarely has to do with the weakness defying explanation and more to do with the lack of overt, traditional, easily-understood explanations. In other words, there are general rules about how and why rates move and then there are exceptions. An uncommonly large amount of 2013 fell into the “exception” category. This was made all the more confusing by the fact that economic data often DID have the expected effect (strong data, rates higher, and vice versa), but it wasn't for the historically relevant …read more

For Mortgage Rates, 2013 Marks Lift-Off From All-Time Lows

Posted To: Mortgage Rate Watch

Mortgage rates were little-changed today, ending the year less than a quarter of a percentage point away from their highest levels in more than 2 years. 4.625% remains the most prevalently quoted rate for ideal, conforming 30yr Fixed loans ( best-execution ), with the only changes being seen in the form of closing costs. On average, rates were an eighth of a percentage point higher on several occasions in August and September this year. Before that, we’d have to go back to April 2011 to see higher. Despite the steep rise in rates in 2013, …read more

Homeowners Blindsided with Stratospheric Flood Insurance Rates

Posted To: MND NewsWire

In its monthly e-magazine Foreclosure Report RealtyTrac takes a look at the current and potential impact of legislation designed to rescue the nation’s flood insurance program. Within that legislation RealtyTrac says there may be looming another demonstration of the theory of unintended consequences . The National Flood Insurance Program (NFIP) was created by an act of Congress in 1968 to help deal with the escalating cost of the government’s emergency response to flood disasters. Because there was little shared risk, i.e. persons who live outside of flood prone areas do not purchase the insurance, private companies …read more

MBS Day Ahead: End of a Decades-Long Trend for Treasuries

Posted To: MBS Commentary

2013 draws to a close today and it will officially break a 20 year trend in bond markets. Since 1993, 10yr yields have returned to the same boundary of the same linear trend channel precisely every 5 years, but 2013 didn't come close (see the chart below). The implication borrows logic from Bollinger and other technical analysis. That logic generally says that when a security has been regularly returning to a technical boundary and then noticeably falls short of returning, it's a sign that the momentum previously responsible for the regular returns is waning and perhaps …read more

MBS RECAP: At Least Things Didn’t Get Any Worse

Posted To: MBS Commentary

Although nothing too troubling happened today, it's hard to find anything glaringly positive. For instance, even though we have some decent gains on the screen, they merely bring Treasuries back into a more linear trend toward higher rights (as opposed to the increasingly aggressive move suggested by last week's yields). MBS never experienced quite the same sort of range breakout but they also have the roll to content with next week. All that means for the current discussion is that the MBS chart wouldn't tell quite the same story as the Treasury chart below and there's …read more

Mortgage Rates Continue Modest Bounce Lower

Posted To: Mortgage Rate Watch

Mortgage rates continued lower to begin the week after pulling back just slightly from 3-month highs on Friday. Activity continues to be subdued in the financial markets that underlie the day to day movement on lenders’ rate sheets, making day-to-day changes less a factor of the day’s events and more to do with random chance. In addition to that randomness, there’s certainly been default momentum leading higher in rates. In general, that momentum has now led rates back to longer-term highs seen in August and September right as the year draws to a close. While …read more

Low-End Home Prices More Useful in Predicting Big-Picture

Posted To: MND NewsWire

In the most recent issue of CoreLogic’s MarketPulse on-line magazine Sam Khater suggests that low-end home prices can be useful in predicting the future direction of all home prices. Analysts, he says, frequently base their forecasts on aggregate national price trends or on geography. The former can sometimes mask large changes in different price segments that could provide useful information. Khater uses the example of low-end prices hitting bottom in March 2011, nearly a full year earlier than the trough for high-end properties and for prices overall. “Not only can turning points be different,” he says, …read more

Reg. Z Reminder; Bank M&A and FDIC Updates; CFPB Penalties/Settlements – How Much Does it Cost to Comply?

Posted To: Pipeline Press

The independent Postal Regulatory Commission approved a temporary bump in the cost of first-class postage, raising the price to send a letter from the current 46 cents to 49 cents on Jan. 26. Temporary? No wonder Christmas card numbers are declining… Bloomberg reports Blackstone has purchased 41,000 homes across the US in the past 2 years to become the largest single family landlord in the country. (Along those lines, RealtyTrac reports foreclosure filings in the US fell 32% in November from a year earlier to an 8 year low, as housing prices continued to rebound nationwide.) …read more

The Day Ahead: Pending Home Sales and More Activity

Posted To: MBS Commentary

Last week was brutally slow, punctuated by an early close on Tuesday, the Christmas holiday on Wednesday and a general absence of volume and volatility for everything else. While the current week also has a day and a half missing due to the New Year holiday, it should prove to be something of a warm-up for increased activity in the following week (which contains Nonfarm Payrolls). The only major data set for today is the Pending Home Sales index at 10am. The chart below shows 10yr yields for the past 9 months and focuses particularly on …read more

Apology for Technical Issues; Bond Markets Sideways

Posted To: MBS Commentary

MBS Live : MBS Afternoon Market Summary NOTE : Some readers may have received a glut of previous MBS Commentary updates from 3:10 – 3:55pm. We’re very sorry for the inconvenience. It should not be an issue going forward as it was a factor of a one-time systems test. As far as bond markets are concerned, things were much less interesting than our technical difficulties. MBS started the day in weaker territory thanks to bond market weakness in Europe overnight but soon had eclipsed yesterday’s trading range by more than an eighth of a point as …read more