MBS RECAP: Bonds Manage to Consolidate Recent Weakness Rather Than Add to it

Posted To: MBS Commentary

Today was a good test for MBS and Treasuries. It spoke volumes to the current state of play in bond markets: traders are afraid to get too short ahead of next week's ECB Announcement (“getting short” equates to higher rates). Traders may also be afraid to get too short in general, simply because that decision is nearing Pavlovian levels of association with PAIN so far in 2014, but especially in the month of May. Information on trader positioning becomes available in more detail after the fact. For instance, the most official report on trader positions is …read more

Mortgage Rates Slightly Higher from 2014 Lows; Big Week Ahead

Posted To: Mortgage Rate Watch

Mortgage rates continued slightly higher today. This had more to do with a market-based continuation of yesterday’s momentum than it did with any of today’s data and events. Lenders’ rate sheets are most directly affected by trading of Mortgage-Backed-Securities (MBS), which are part of the broader “Fixed-Income” or simply “bond markets.” Trading in bond markets has recently grown more exciting than it had been from February through April. As May draws to a close, we can look back and see more clearly that much of the positivity was (and still is) a factor of expectations …read more

Home Price Appreciation Has Peaked -Poll

Posted To: MND NewsWire

In a poll of 31 property analysts Reuters news agency found consensus that the growth of house prices in the U.S. has peaked and that further increases over the next two years will be more restrained. The analysts’ predictions centered on a median 7.5 percent increase this year and a gain of only 4.0 percent by 2016 . Reuters says this is a significant slowdown from the 12.4 percent jump in home values over the 12 months ended in March that was recently reported by the S&P/Case Shiller 20-City Composite Index. The rate of increase has …read more

Freedom Continues to Grow; $500k Fine for RESPA Violation; Information on Individual Liability in CFPB Cases

Posted To: Pipeline Press

“I’m going to retire and live off of my savings. The second day, I have no idea what I’ll do.” Quips aside, many Americans have no clue about how much money they’ll need to fund a financially secure retirement. For example, who has a crystal ball to estimate health care costs? (Fidelity’s most recent Retiree Health Care Cost Estimate found that the average couple could expect to spend more than $220K in health care expenses over the course of their retirement.) But many bank and non-bank mortgage companies are offering financial planning , and when one …read more

MBS Day Ahead: Brief Annotated History of Interest Rate Movements; What Next?

Posted To: MBS Commentary

For the purposes of this discussion, 'interest rates' refer to mortgage rates and 10yr Treasury yields. Why 10yr yields? I just put together this knowledge base article to answer that question (which I know would be on my mind if I were to see such frequent mention of 10yr Treasuries on an MBS site). Rest assured, we'll actively discuss MBS-specific charts and trading patterns if they happen to exhibit even a 10th of their previously boisterous personality. To see what I mean by that, just consider the following chart that shows the spread between MBS yields …read more

MBS RECAP: Bond Markets Use Up Every Last Bit of Correction Potential

Posted To: MBS Commentary

GDP came out much weaker than expected this morning and Jobless Claims were noticeably stronger than expected. Pending Home Sales were stagnant and depressing, and the 7yr Treasury auction was pretty darn good considering how aggressively bond markets rallied leading up to it. But none of that stuff mattered… We wouldn't even need to know any of today's goings on based on how bond markets traded. Quite simply, after yesterday's break of 2.47–a hugely important technical level–anything below 2.47 is fair play for today. So when 10yr yields hit 2.402 this morning, a 7bp sell-off was …read more

Mortgage Rates Slightly Higher After Mid-Day Volatility

Posted To: Mortgage Rate Watch

Mortgage rates began the day in even better shape than yesterday, but market volatility prompted most lenders to raise rates in the afternoon . That leaves today’s rate sheets in just slightly weaker territory compared to yesterday, but still better than any other day of the year. The most prevalently quoted conforming 30yr fixed rate for best-case scenarios ( best-execution ) remains at least as low as 4.125%, with some lenders closer to 4.0%. Many borrowers will see today’s weakness in the form of higher closing costs vs yesterday. Expressed in terms of effective interest …read more

With Decline in Foreclosures, CoreLogic Sees End in Sight

Posted To: MND NewsWire

April saw a further improvement in late stage foreclosure activity CoreLogic reported on Thursday. Both completed foreclosures and the number of properties in the process of foreclosure declined by double digits from levels in April 2013, and both categories were down slightly from March. The company’s chief economist said the foreclosure pipeline could clear in a little more than a year. Completed foreclosures numbered 46,000 nationally, down by 1,000 or 0.4 percent from March but 10,000 fewer than in April 2013, a year-over-year decrease of 18 percent. With the exception of the District of Columbia, and …read more

Kroll on Non-Bank Mortgage Companies; Free-For-All in Servicing Market

Posted To: Pipeline Press

There are many ways to divvy up residential lenders: size, agency approvals, QM or non-QM, geography, broker and banker, take your choice. One very fundamental way to do so is whether or not a lender is a bank or an independent mortgage bank. Banks are often flush with cash, putting it to work in various lending activities, whereas independent mortgage banks – not so much. Kroll Bond Rating has released its research report that is worth a gander: Capital Requirements for Non-Bank Mortgage Companies . (Requires free registration.) In this era of counterparty risk, it is …read more