MBS RECAP: Bond Markets Inch Back Toward Positive Territory After Volatile Morning

Posted To: MBS Commentary

The 'after-hours' session (3pm-5pm, following the close of Treasury pit trading) is seeing an ongoing trickle of sideways to slightly stronger prices in MBS. The Treasury yield curve is flagrantly favoring the shorter maturities–part of a two-day correction to an even bigger move away from shorter maturities that began in earnest last week. In plainer terms, this means that yields on 2-5yr Treasuries were rising faster than yields on 10-30yr Treasuries until Friday, and now the opposite has been the case. In fact, 2-5yr yields fell today while 10yr and 30yr maturities are slightly weaker/higher. As …read more

New Housing Proposals Will Only Make Credit Conditions Tighter – Report

Posted To: MND NewsWire

Dr. Kenneth Rosen, Chairman, Fisher Center for Real Estate and Urban Economics and Professor Emeritus, University of California, Berkley emerges as a bit of a contrarian in an article in RealtyTrac’s March Housing News Report . Rosen says he is concerned that the new housing finance system that is being built will only serve to sustain today’s tight credit conditions , in itself a situation he calls unsustainable. He describes the housing market as functioning as a “virtuous cycle;” the first time homebuyer progresses to the trade-up buyer and on to the downsizing buyer. However there …read more

Mortgage Rates Near Highest Levels in More Than 2 Months

Posted To: Mortgage Rate Watch

Mortgage rates continued higher today, as part of a 2 day move following 5 straight days of improvement. Nearly all of that improvement has been erased and rates are now in line with the afternoon following the FOMC Announcement on March 19st. That leaves today with the second highest rates since January 9th. When adjusted for day to day changes in closing cost, rates moved 0.05% higher today on average. That leaves the most prevalently quoted conforming 30yr rate for top-tier scenarios ( best-execution ) well into 4.5% , with a few lenders now approaching …read more

FBI Investigating Flood Maps; Jumbo Production Forecast Falls; Proposed AMC Legislation

Posted To: Pipeline Press

Before heading to Wisconsin for a few days, over the weekend I called The Bellagio to find out the betting lines on the PATH Act, Johnson-Crapo, Corker-Warner, and now Maxine Waters’ lender co-op bill. They were all too busy watching basketball games to bother, but the odds against reconciling the proposals on Fannie & Freddie’s fate in an election year are not to be underestimated. (One person wrote to me Friday, calling the players a “hodge-podge of politicians, most of whom know little about the lending business or the function of Fannie or Freddie, trying to …read more

MBS Week Ahead: Serious Monotony Problem for Bond Markets; Time to Move on?

Posted To: MBS Commentary

For most of 2013, the mission was clear for bond markets. It mostly involved rapid selling and significant amounts of pain for any fans of low interest rates. After a brief correction pulling back from multi year highs to begin 2014, bonds have been ridiculously sideways. 10yr yields (a better proxy for overall momentum in the interest rate world, despite MBS being more germane for day-to-day changes in mortgage rates) have scarcely moved outside a 2.6-2.8 range since mid January. Compared to what preceded it, the range has been so narrow and sideways as to be …read more

Mortgage Rates Higher Today, but Lower on the Week

Posted To: Mortgage Rate Watch

Mortgage rates finally experienced a correction to the 5-day winning streak that had carried them lower after last week’s spike. On a slightly unsatisfying note, the winning streak was never quite able to erase last week’s losses and by the time today’s weakness is factored in, rates are right in the middle of the recent highs and lows. When adjusted for day to day changes in closing cost, rates moved 0.03% higher today on average. That leaves the most prevalently quoted conforming 30yr rate for top-tier scenarios ( best-execution ) at 4.5% , with a …read more

MBS RECAP: Bond Markets Correct Bullish Run, More Neutral for NFP Week

Posted To: MBS Commentary

If you'd like to reduce this week's activity to a very basic concept and seek to explain just about everything we've seen in the past week as a function of that concept, that's probably just fine . It's not a new concept either, but one of the fairly consistent ideas we discuss of prices/yields 'orbiting' around certain key technical levels. Of course MBS aren't following Treasuries in perfect lock-step, but the broader momentum in “rates” tends is what we're interested in here. In that regard, 10yr yield technical levels will tell us more than MBS, while …read more

A Look at Housing’s One-Percenters

Posted To: MND NewsWire

CoreLogic Chief Economist Mark Fleming suggests that an examination of housing’s one-percenters might be as valuable an analysis as a glance at that segment’s income and/or wealth distribution. Historically, at least for the last two decades, homes that have sold for over $1 million have made up 1 percent of sales, a useful proxy. The share remained below 1 percent through most of 2003 than began to move, reaching as high as 1.8 percent when prices peaked in mid-2006. But even as prices began to deflate, the share of upper-priced homes continued to rise , reaching …read more

The CFPB on payday lending & FCRA; increasing focus on 2nds and HELOCs – are we talking not enough or too much?

Posted To: Pipeline Press

My cats Myrtle and Gusto are keenly aware that I use a credit card to buy their salmon-infused kibble when it runs low. And so they were very interested to learn that JPMorgan reported the top 5 credit card lenders in the U.S., in order and their market share percentage, are American Express (25%), JPMorgan Chase (21%), Bank of America (12%), Capital One (9%) and Citibank (8%). Hey, no Wells Fargo! Speaking of comparisons, the SFIG (Structured Finance Industry Group) put out a great comparison of the three leading GSE proposals. It is worth a skim, …read more

MBS Day Ahead: Can Bonds Make it 7 Days in a Row Without Losing Ground?

Posted To: MBS Commentary

There's some conventional wisdom that suggests asking questions in the title of an article is not a good idea. Pish posh! When it comes to financial markets, every day begins with a question mark. Today is no different, though the importance of the question at hand is questionable. For each of the past 6 sessions , the closing yield on 10yr Treasuries (our proxy for “bond markets” despite the underlying focus being on MBS around here) has been no higher than the previous session. We can't say each day has improved because Monday and Tuesday closed …read more