MBS RECAP: Steady at Higher Prices to end Best Month in 2 Years

Posted To: MBS Commentary

Although we have just under an hour of trading left in the day, if MBS were to end right at current levels, January would be the strongest month of gains in over 2 years, beating out September 2013 by just half a tick . Prices started the day in stronger territory today–a factor of overnight positivity in both Asia and Europe–and haven't moved outside an eighth of a point range. The morning data was uneventful, coming in close to consensus on all accounts or otherwise having embedded counterpoints. In other words, where the headline Chicago PMI …read more

Mortgage Rates End Month Triumphantly Lower

Posted To: Mortgage Rate Watch

Mortgage rates moved forcefully lower today, bringing them well past previous 2014 lows and back in line with levels not seen since November 19th. Overnight weakness in equities and foreign markets continues to promote strength in US bond markets, including the mortgage-backed-securities (MBS) that most directly influence mortgage rates. This further solidifies 4.375% as the most prevalently quoted conforming 30yr fixed rate for ideal borrowers ( best-execution ). For some lenders, that rate remains 4.5% , but for the most aggressive lenders 4.25% is a close contender for utterly flawless scenarios. When adjusted for day …read more

BofA One Step Closer to Swallowing $8.5 bln Countrywide Pill

Posted To: MND NewsWire

Bank of America (BoA) came a step closer today to ending litigation that has plagued it since it bought Countrywide Mortgage in 2008. A New York State judge approved most of an $8.5 billion settlement agreement between the bank and nearly two dozen mortgage securities investors which had itself been the subject of litigation since it was first reached over two years ago. The original suit involved claims that over 500 securities backed by mortgages originated by Countrywide before it was acquired by BoA were not of the quality promised in their prospectuses. Investors in the …read more

Housing Might Not be Looking so bad After All

Posted To: MND NewsWire

“The familiar saying that housing brings the economy out of recessions did not hold true this time around,” according to David Crowe, Chief Economist for the National Association of Homebuilders (NAHB). Crowe, writing in the current edition of RealtyTrac’s Foreclosure News Report s aid that home building this time around did not take the well-worn path we have come to expect in an economic recovery. Construction has moved up from the bottom, but that movement has not been “stellar.” Housing starts in 2013 were well under 1 million, an improvement from 2012 but the rate of …read more

MBS Day Ahead: Big Bounce Before NFP or After?

Posted To: MBS Commentary

November and December were not volatile months for bond markets. While we sometimes associate the concept of volatility with losses in MBS (because volatility is bad for MBS), these two months were simply “bad months” for bond markets, but in a fairly linear manner. Contrast that to the 4 or so months from mid-May to mid-September and it's a different story . These were some of the most volatile and painful in modern memory. Yet seemingly overnight, the push back against the past two months is being treated as a similar push back to those four …read more

MBS RECAP: MBS Outperform as Treasuries Wade Through Auctions

Posted To: MBS Commentary

Both MBS and Treasuries were weaker at the start of today's domestic session. While that was slightly more pronounced for Treasuries, so was yesterday afternoon's rally. As such, when viewed against a slightly broader backdrop, MBS are by no means running away from Treasuries, but were able to edge into positive territory by the end of the day while Treasuries stayed in the red. Adding to the Treasury-specific challenges today was the once-in-a-blue-moon occurrence of an auction doubleheader, with both 5 and 7yr Notes being sold at 11:30am and 1pm. The implied pressure on Treasuries from …read more

Mortgage Rates Steady to Slightly Higher

Posted To: Mortgage Rate Watch

Mortgage rates inched higher today after hitting the lowest levels of the year yesterday. Trading in the secondary mortgage markets was far calmer by comparison as yesterday’s FOMC Announcement served as a focal point for volatility. As the end of the day approaches, trading levels for the mortgage-backed-securities (MBS) that most directly influence rates are fairly close to yesterday’s latest levels, but had been weaker this morning. The improvements allowed a few lenders to release positively revised rates sheets as the day progressed, but on average rates are still slightly higher. That said, the movement …read more

Home Equity Loans Mark Exception to Easing Credit Standards

Posted To: MND NewsWire

More banks are easing their underwriting standards as they adapt to changing economic conditions and competition the Office of Comptroller of the Currency (OCC) said today as it released results of its 19 th Annual Survey of Credit Underwriting. Banks are relaxing underwriting for both commercial and retail products, with large banks as a group reporting the highest share of eased standards. Some loan products, such as home equity loans , instead saw tighter standards. The survey, a compilation of examiner observations and assessments, included 86 of the largest national banks and federal savings associations and …read more

CFPB Goes After PHH; Thoughts & Surveys on Current Builder & Lender Environment – Good & Bad News

Posted To: Pipeline Press

The industry is changing. The first half of 2013 is a distant, fond memory for residential lenders. Subprime, non-prime – what’s the diff? Business Week reports on it . And the lender landscape is changing – one East Coast correspondent rep wrote me, “The Johnny-Come-Latelies who were attracted by the huge margins in 2008-2012 are finding that those margins just aren’t there anymore, especially with the Agencies in the play. Smaller lenders can’t afford compliance and legal staff, and will be exiting. But some of that will be delayed as due to the large amounts of …read more

MBS Day Ahead: Glut of Economic Data and Auctions vs Stock Lever

Posted To: MBS Commentary

With the introduction of the 2-Year Floating Rate Note Auction occupying yesterday's auction time slot, today will see both the 5 and 7yr auctions at 11:30am and 1pm respectively. That makes for a busier afternoon than usual, even for a Thursday (which already has several regularly recurring calendar events, including weekly Fed MBS buying). The morning hours are no slouch, with two upper-middle tier economic reports at 8:30am in the form of Final GDP for the 4th quarter and Jobless Claims. That will be followed by Pending Home Sales at 10am. Taken together, that makes for …read more