MBS RECAP: Bond Markets Loving Month End, and Life in General

Posted To: MBS Commentary

Nothing has materially changed from the Mid-Day recap, so for the nuts and bolts of today's rally, that would be the best place to get caught up: MBS MID-DAY: Everyone Loves Bonds! Except Greek Bonds! You'll notice that both titles contain some form of “love,” and that's really the best way to characterize the market's infatuation with and lust for strong sovereign debt. Guaranteed tradeflows into German Bunds (and the rest of the Eurozone) are a big help, but more than that, the absence of inflation and ongoing global growth concerns are increasingly unmanageable problems. And …read more

Mortgage Rates Shoot Past Recent Lows; 3.5% Getting More Prevalent

Posted To: Mortgage Rate Watch

Mortgage rates moved lower today at their fastest pace since January 14th. Rates sheets moved well past recent lows and back to levels not seen since May 10th 2013. That was the day that the Wall Street Journal’s Hilsenrath suggested the Fed was mapping an exit from stimulus , which sent markets into the tailspin that was effectively the prologue to the taper tantrum. It’s amazing, or at least interesting to consider that asset purchases have now been fully phased and that a rate hike is a much more immediate threat, yet rates are back …read more

Rules Set for Disbursement of Affordable Housing Funds

Posted To: MND NewsWire

When Federal Housing Finance Agency Director Melvin L. Watts testified before the House Financial Services Committee early this week he said that FHFA had notified Fannie Mae and Freddie Mac that it was reversing suspension of contributions to affordable housing funds which the GSEs were required to make prior to being placed in conservatorship. The suspension was authorized by the Housing and Economic Recovery Act (HERA) in 2008. On Friday the Department of Housing and Urban Development (HUD) clarified how those funds would be used with publication in the Federal Register of an interim program rule …read more

MBS Day Ahead: Busy Day of Data for Europe and US

Posted To: MBS Commentary

The last trading day of the month for bond markets is more interesting than average in its own right. Money managers are busy making sure their holdings match certain indices. For bond market participants, that's typically some flavor of Barclay's index . There's no secret place where month-end “index buying” is reported or tracked, so onlookers are left to rely on secondhand reports or simply deduce based on trading activity. To that end, both deduction and secondhand reports suggest we've seen a fair amount of month-end buying come through already over the past two days. But …read more

MBS RECAP: Bond Markets Take “Inside Day” to Another Level

Posted To: MBS Commentary

“Inside day” is a good little piece of market jargon. It refers to a day of trading where prices, yields, or whatever you want to chart fall INSIDE the high and low from the previous day. So quite simply, if the orange lines in the chart below (today's range) fall inside the white lines (yesterday's range), it's an inside day. As you can see, that wasn't even a close call today, and in fact trading levels held inside the post-FOMC range from 2pm-2:30pm! When an entire day's range falls within 30 minutes of movement from the …read more

Mortgage Rates Holding Near Long-Term Lows

Posted To: Mortgage Rate Watch

Mortgage rates were steady to slightly higher today on average. Some lenders were actually slightly lower, but they were the exception. In contrast to yesterday, the bond markets that underlie rate movements were exceedingly calm, and what little movement there was came in measured doses. This sort of low-altitude, sideways bounce is a fairly common occurrence following a bigger move lower in bond markets. The distinction between bond markets and mortgage rates is important here, because mortgage lenders haven’t been able to pass along all of the gains implied by trading levels. If markets manage …read more

Averages in 2014: LTV, FICO, Loan Types, and More

Posted To: MND NewsWire

Fifty-six percent of loans closed in December were for home purchase, somewhat lower than the average for 2014 as a whole according to the Origination Insights Report from Ellie Mae. Lower interest rates pushed refinancing numbers higher toward the end of the year, increasing originations for that purpose from the years low of 32 percent in July to 45 percent in November but the refinancing shared dipped to 43 percent in December, allowing the reciprocal share of purchase mortgages to increase for the first time in four months. For the entire year purchase loans had a …read more

MBS Day Ahead: Bond Markets Still Trying to Make up Mind After ECB

Posted To: MBS Commentary

So much of 2014 was spent building up to the notion of ECB QE and so much of the first 2 weeks of 2015 was dedicated to fully pricing it in that bond markets seem like they're not sure what to do next. Either that or the reality of ECB QE is still being digested in the context of January's month-end trading needs and we're about to get another mega-dose of volatility next week. Either way, 10yr yields have arguably been dead sideways ever since QE became a reality on January 15th. Thankfully, the sideways range …read more

Freddie Mac Index Shows Deterioration in some Energy Dependent Markets

Posted To: MND NewsWire

Freddie Mac’s Multi-Indicator Market Index (MiMi) rose nationally this month for the third consecutive time. This, along with improving three month trends in thirty-four states and the District of Columbia and 37 of 50 metropolitan areas shows, the company said, that the U.S. housing market is continuing to stabilize. The same time last year, 34 states plus the District of Columbia, and 41 of the top 50 metro areas were showing an improving three month trend. Len Kiefer, Freddie Mac Deputy Chief Economist said, “Housing markets are stabilizing. Low mortgage rates help to keep affordability in-check …read more

Mortgage Rates Back to Long Term Lows After Fed

Posted To: Mortgage Rate Watch

Mortgage rates fell again today , and while the move wasn’t big, it was enough to bring most lenders back in line with the best rates from two weeks ago. Those have the added distinction of being the best rates since May 2013. At these levels, 3.625% is widely available as a top tier conforming 30yr fixed quote and a few lenders are quoting 3.5%. Even if your lender isn’t, you can likely choose to pay higher upfront costs in exchange for the lower rate. This is neither good nor bad, but simply a matter …read more