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Mortgage Rates Continue Defying Bond Market Weakness

  • Posted To: Mortgage Rate Watch

    Although it was the focus of yesterday's discussion , the ability of the mortgage market to hold steady in the face of bond market weakness continues to impress . This is interesting because mortgage rates take direct cues from the bond market. That's still the case, but at the moment, the mortgage side of the bond market is playing with a stacked deck . If Treasuries are only a little bit weaker on any given day (like today), mortgage bonds and mortgage rates have been consistently holding their ground or actually improving. Today was more of a "ground-holding" sort of day, but it depends on how any given lender responded to yesterday's bond market weakness. Those who adjusted rates higher yesterday were generally in slightly better shape today . Those who abstained yesterday were offering...(read more)

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    Wed, 02 Dec 2020 21:19:00 GMT

MBS RECAP: Breaking Down The Crazy Relationship of MBS, Mortgage Rates, and Treasuries

  • Posted To: MBS Commentary

    Breaking Down The Crazy Relationship of MBS, Mortgage Rates, and Treasuries Bonds showed up to sell today--at least Treasuries did. MBS, not so much! That was the focus of the morning commentary and today's recap video offers additional clarification and detail for those seeking a deeper understanding. In terms of actually recapping today's market action, fiscal headlines were in focus after tradeflow-based weakness at the start of the day. 0.96% technical support generally held firm for Treasuries, but buyers were not eager to push back in the other direction. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) ADP Employment 307k vs 410k f'cast, 404k prev Market Movement Recap 08:19 AM Bonds were roughly unchanged overnight, with a token rally during...(read more)

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    Wed, 02 Dec 2020 21:06:37 GMT

FHA Loan Limits Move Up To A Floor of $356,362

  • Posted To: MND NewsWire

    The Department of Housing and Urban Development (HUD) has published its 2021 Forward Mortgage Limits for FHA loans. The FHA limits are based on the Federal Housing Finance Agency's (FHFA's) conforming limits for Fannie Mae and Freddie Mac loans; however, they are individualized by locality and cover a much wider range. HUD sets a floor for the lowest cost areas and a ceiling for high cost areas. Limits fall within those two ranges. The agency determines whether an area is considered high cost or low cost by the median sales price of homes at the county level. Where a property is inside a Metropolitan Statistical Area (MSA) the county within the MSA with the highest median price determines the outcome for the entire MSA. Last week FHFA ( not to be confused with FHA) announced it has raised its...(read more)

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    Wed, 02 Dec 2020 20:08:21 GMT

MLO Jobs; Docs, Accounting, Jumbo, Appraisal, Customer Service Products; Rates Moving With Stimulus Rumors

  • Posted To: Pipeline Press

    Fun with numbers for Hump Day! Numbers were behind HP’s decision to leave California for Houston. Thank you to Len T. who sent a great chart of the names of big numbers, suitable for the kids and anyone watching U.S. debt. Thank you to Brian B. for sending along the news that New York City doesn’t, for the first time ever, have a zip code in the Top 10 Most Expensive in the United States . In Hawai’i, affordable housing advocates are cheering the 572 acres going to housing where owners will be restricted to Native Hawaiian households who earn up to 30%, 40%, and 60% of the area median income. (There are 5,100 people on the waiting list for 60 units, some on the list for 30 years!) If you’re a music fan, you can buy M&M’s, uh, Eminem’s, house, for $3.7...(read more)

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    Wed, 02 Dec 2020 16:17:01 GMT

MBS Day Ahead: The Absolutely Ridiculous State of Mortgage Rates vs MBS vs Treasuries

  • Posted To: MBS Commentary

    Following yesterday's sharp losses, the bond market didn't do much overnight, nor is it doing much to push back in the other direction this morning. In fact, 10yr yields are starting out at their highest levels since the Pfizer vaccine sell-off in early November, and those were the highest levels since March. Moreover, the weakness made for a perfect technical bounce on the lower line of the trend channel we've been tracking. From a purely technical perspective, the implication is to once again challenge (or "re-test") the recent highs, at a minimum. We're close enough to those to consider that a work in progress, actually. The scarier scenario would be a move to the upper trend line. In thinking about scary scenarios, it's definitely one of those precious few...(read more)

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    Wed, 02 Dec 2020 14:25:12 GMT

Home Purchase Activity up 9% Despite a Slow Holiday Week

  • Posted To: MND NewsWire

    There was the usual disruption to mortgage application activity during the Thanksgiving holiday week that ended November 27, although the volume, especially of purchase applications held up relatively well. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, eased back by 0.6 percent on a seasonally adjusted basis from one week earlier and was down 32 percent absent adjustment. During Thanksgiving week in 2019 the adjusted Index fell by more than 9.2 percent. The Refinance Index decreased 5 percent from the previous week but was 102 percent higher than the same week one year ago. The refinance share of mortgage activity decreased to 69.5 percent of total applications from 71.1 percent the previous week. The seasonally adjusted...(read more)

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    Wed, 02 Dec 2020 13:08:54 GMT

MBS RECAP: Serious Sell-Off in Bonds. Time to Panic?

  • Posted To: MBS Commentary

    Serious Sell-Off in Bonds. Time to Panic? A new month brought in new momentum for the bond market--a lot of it--and not the good kind! Treasuries had it far worse than MBS, but MBS are still significantly weaker. Mortgage rates, however, aren't necessarily weaker than yesterday depending on the lender. At first glance, that seems like an obvious lock opportunity. In the short term, that's probably the right idea, but there are other narratives to consider. Those are discussed in today's video, but here's a sneak peek: the traders most interested in buying large amounts of bonds could be the same traders helping push yields higher today. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) ISM Manufacturing 57.5 vs 58.0 f'cast, 59.3 prev Construction...(read more)

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    Tue, 01 Dec 2020 21:06:59 GMT

Mortgage Rates Surprisingly Steady Despite Market Drama

  • Posted To: Mortgage Rate Watch

    Like many industries, housing finance has a superficial layer that's fairly easy to understand for the average consumer. A person wants a home. They don't want to pay cash. They get a loan. Lower rates = lower payments. The end. Shortly below that superficial layer of understanding, where a surprisingly high percentage of mortgage professionals operate, it's popular to discuss 10yr Treasury yields as a basis for mortgage rates. The only problem with viewing 10yr yields as the basis for mortgage rates is that they're not. Anyone can observe this objective fact by jumping just a bit deeper into the rabbit hole and acquainting themselves with MBS (mortgage-backed securities). These are the true raw ingredients for mortgage rates even though they frequently mimic 10yr Treasury yield movement. By...(read more)

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    Tue, 01 Dec 2020 21:05:00 GMT

Residential Sector Was Key to October Construction Spending Increase

  • Posted To: MND NewsWire

    Total construction spending in October was at a seasonally adjusted annual rate of $1.439 trillion according to U.S. Census Bureau estimates. This was an increase of 1.3 percent from the revised September estimate of $1.420 trillion and 3.7 percent higher than spending in October of 2019. While virtually all residential spending is privately funded, the increase in that sector was the second largest (behind public safety spending) of any in the overall year-over-year comparison. Spending for the month, prior to adjustment, totaled $128.008 billion compared to $130.251 billion in September. Spending for the year-to-date (YTD) is up 4.3 percent, from $1.140 trillion in 2019 to $1.190 during the first 10 months of 2020. Privately funded construction spending was at an annual rate of $1.094 trillion...(read more)

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    Tue, 01 Dec 2020 16:39:35 GMT

October's Home Price Gains Break a Six-Year Record

  • Posted To: MND NewsWire

    That the rapid rise in home prices since spring is setting near decade long highs was confirmed again this week , this time by CoreLogic. The company says its Home Price Index (HPI) rose 7.3 percent over the 12 months that ended in October and was the was the fastest rate of appreciation since April 2014. Prices were up 1.1 percent month-over-month. The company says that home prices climbed in recent months due to heightened demand and ongoing home supply constraints. This could grow worse if the pandemic worsens and potential sellers hold off listing their homes. There is hope, however, for meeting some of the demand. New home construction surged in October and the National Association of Home Builders reported its index measuring home builder confidence in the new home market set a third...(read more)

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    Tue, 01 Dec 2020 15:44:14 GMT

LO, Broker Jobs; Bank Statement, Retention, Subservicer Review Products; Upcoming Webinars This Week

  • Posted To: Pipeline Press

    In equity news, despite some predictions to the contrary , the market had its best month since 1987. This, in the face of renewed layoffs and economic scaring in the service sector for many lower paying jobs and small businesses. Fixed income… Do you like rates where they are? ( The average 10-year yield during the month of November was .86 percent. ) Good. You’ll probably see them for much of 2021, depending on pandemic-related news. Although bond market investors and economists often talk about inflation, think about it. Do you see broad-based price pressure pushing yields higher any time in the next year, based on employment data? Retailers have shifted to on-line purchases as well as curbside pickup. Money has shifted from travel and restaurants into home categories like comfort...(read more)

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    Tue, 01 Dec 2020 15:08:40 GMT

MBS Day Ahead: New Month, New (Negative) Momentum. Are We Doomed?

  • Posted To: MBS Commentary

    Remember the end of July? We were worried that an entire month of gains in bonds could give way to a momentum shift in August. It did. September brought a recovery. It wasn't as bullish as July, but it was a sideways-to-slightly-stronger theme nonetheless. October was almost a carbon copy of August in terms of negative momentum. Once again , the negativity cooled off in the following month (the one that just ended) with Treasuries ending up in slightly better territory versus October 30th. With seemingly serendipitous weakness this morning, is recent history (like that of August or October) repeating? Too soon to tell, of course, but never too soon to consider! All of the above is frustratingly difficult to follow based on prose alone, but today's chart makes it easy to see the shifting...(read more)

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    Tue, 01 Dec 2020 14:34:30 GMT

Mortgage Rates Hold Steady Over Holiday Weekend

  • Posted To: Mortgage Rate Watch

    Although many mortgage lenders were technically open for business last Friday, it's a well-known unofficial holiday. Mortgage rate movement requires bond market movement, and the post-Thanksgiving Friday invariably sees fewer traders trading fewer bonds. Even when bonds do manage to move, the people in charge of setting mortgage rates at various lending institutions tend to play it safe. In fact, many lenders simply leave rates wherever they were on Wednesday and then simply plan on getting back to work on Monday. This particular Monday, however, the average lender is still in line with Friday's and Wednesday's rates. Some of them offered lower rates in response to strength in the bond market today. Those who abstained are expected to offer token improvements tomorrow, assuming the bond market...(read more)

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    Mon, 30 Nov 2020 21:43:00 GMT

MBS RECAP: Uneventful Month-End Day For Bonds, But MBS Outperform

  • Posted To: MBS Commentary

    Uneventful Month-End Day For Bonds, But MBS Outperform Final trial results for Moderna's vaccine (it's still really good, by the way) failed to produce a huge reaction in markets overnight, but it did coincide with higher Treasury yields to start the day. As bonds recovered, MBS outperformed--at first, by a little. Then, by a lot. Month-end trading motivations were the only game in town when it came to assigning blame for all of the micro movement. The Fed's MBS buying operation from 1pm-120pm was clearly the motivation for the final surge in MBS in the afternoon. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Chicago PMI 58.2 vs 59.0 f'cast, 61.1 prev Pending Home Sales -1.1 vs +1.0 f'cast, -2.0 prev Market Movement Recap 08:54 AM Stocks...(read more)

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    Mon, 30 Nov 2020 21:19:11 GMT

Loan Limits Increase Nearly 7.5 Percent

  • Posted To: MND NewsWire

    The Federal Housing Finance Agency (FHFA) has released the new conforming loan limits which will be in place next year for mortgages acquired by the GSEs Fannie Mae and Freddie Mac. In most of the U.S., the 2021 maximum conforming loan limit (CLL) for one-unit properties will be $548,250 , an increase from $510,400 in 2020. The Housing and Economic Recovery Act (HERA) requires that the baseline CLL be adjusted each year for Fannie Mae and Freddie Mac to reflect the change in the average U.S. home price as reported by FHFA's House Price Index (HPI). According to the seasonally adjusted, expanded data HPI published last week, house prices increased 7.42 percent, on average, between the third quarters of 2019 and 2020. Therefore, the baseline maximum CLL will increase by the same percentage. The...(read more)

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    Mon, 30 Nov 2020 16:22:34 GMT

Dig Out the Mittens - December Offers the Best Home Buying Bargains

  • Posted To: MND NewsWire

    While this COVID-19 positive year has certainly been an exception, spring is usually considered the optimum time , on both sides of the transaction, to buy or sell a home. A new study, by ATTOM Data Solutions, indicates that one side of the equation could be losing money. Indeed, the company says, "Buyers willing to close in December and January avoid prices well above market value." The company looked at any calendar day over the period of 2013 to 2019 where there were 10,000 single-family or condo transactions and found 362 days that matched that criteria with the exceptions being all holidays - January 1, July 4, November 11, and December 25. They then compared the median sales prices of homes that closed on that day with the automated valuation model (AVM) for those same homes at the time...(read more)

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    Mon, 30 Nov 2020 16:12:16 GMT

October Pending Home Sales Continue Their Decline

  • Posted To: MND NewsWire

    Pending home sales, which ended a four-month streak of gains in September with a 2.2 percent decline, slipped further in October. The National Association of Realtors® (NAR) said its Pending Home Sales Index (PHSI), a measure based on contracts signed during the month to purchase existing single-family homes, townhomes, condos, and cooperative apartments, was down 1.1 percent compared to the previous month. The index, now at a 128.9 level, remains 20.2 percent higher than in October 2019. Analysts had been expecting a rebound in the forward-looking indicator. Those polled by Econoday had forecast over a range of a 1.0 percent increase to 3.9 percent with a consensus of 2.0 percent. Trading Economics had predicted a 1.0 percent gain. "Pending home transactions saw a small drop off from the...(read more)

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    Mon, 30 Nov 2020 15:44:01 GMT

MBS Day Ahead: Bonds Solidifying Last Week's Gains. Busy Data Week Ahead

  • Posted To: MBS Commentary

    Thanksgiving week can't ever be fully trusted to provide an accurate glimpse of market momentum. In this year's case, it didn't really say much anyway. Bonds lost ground at first, but ultimately rallied back to unchanged levels on the week. Most of the move happened on Friday's abbreviated session, thus raising even more questions about the gains remaining intact this morning. So far, so good in that regard! Now we move on to digesting the typically active data calendar on the first week of any given month, culminating in Friday's jobs report. It's an interesting time for the relationship between economic data and the bond market. To be sure, the market-moving power of the econ data is "limited" at the very least, but there have been indications that it's...(read more)

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    Mon, 30 Nov 2020 15:08:10 GMT

Production, Ops Jobs; VA, VA IRRRL, Non-QM Products; USDA, FHA, VA Stats

  • Posted To: Pipeline Press

    Thank you to Tracy C. sent, “An unemployed court jester is nobody’s fool.” There are millions of unemployed U.S. citizens, and the CFPB, HUD, and other federal agencies have partnered to encourage homeowners who are struggling financially, unemployed or not, as a result of the COVID-19 National Emergency to take control of their mortgage loans with resources to support customers and clients. Click here to access the CFPB’s online toolkit. Every MLO should send it to their clients to forward to friends who may be strained: 2.7 million homeowners are in forbearance plans. And the strain is apparent in Ginnie Mae loans. Versus the MBA’s forbearance numbers Fannie Mae and Freddie Mac loans in the latest survey (3.35 percent), Ginnie Mae loans in forbearance are more...(read more)

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    Mon, 30 Nov 2020 14:51:39 GMT

MBS Day Ahead: Without Any Surprises, It's Just Another Weekend Trading Day

  • Posted To: MBS Commentary

    For the US bond market, the day after Thanksgiving is frequently a reflection of the EU bond market. Strength in EU bonds translated to 10yr yields improving by 2bps (.862%). To be more precise, EU markets and US futures markets were still open yesterday. Stocks and bond yields (both at home and in the EU) moved moderately lower. As of this morning, EU bond markets were mostly holding yesterday's gains despite a full recovery in equities futures (S&P). US bonds are siding with EU bonds as opposed to the " risk-on " vibes suggested by the stock market bounce. MBS are up 2 ticks (0.06) in early trading. Nothing notable to report so far. There are no scheduled events of note on the calendar. Absent a significant and unexpected headline, today is effectively an early start to...(read more)

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    Fri, 27 Nov 2020 14:21:25 GMT

High level Ops, Implementation Jobs; Demographics for MLO's: Who's Locking and Who's Not?

  • Posted To: Pipeline Press

    Left over pumpkin pie for breakfast today? Have you begun your company’s Holiday Cookbook yet? (Help corporate culture by sending an email, ad a recipe, send it on to someone else working from home, keep it going.) Remember when “flexible” working arrangements made the news? For example, flexible work arrangements (think gig employment, independent contractors, and freelancers… and robots?) accounted for 94 percent of the net employment growth in the United States from 2005 to 2015. How the government regulates the treatment of these people will have broad reaching effects across the entire economy. Jared Kushner and Ivanka Trump know a little something about employment, and homes. They are expanding their “cottage” by the Trump National Golf Club in Bedminster...(read more)

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    Fri, 27 Nov 2020 14:17:22 GMT

Forbearances Trending Slightly Higher, Well Below 2020 Peak Levels

  • Posted To: MND NewsWire

    Despite a second consecutive modest weekly increase , the number of loans in forbearance continue to trend well below those at the peak of the COVID-19 pandemic. Black Knight said there was an uptick of 27,000 loans in forbearance plans during the period ended November 23. That reporting period was one day shorter than the usual week in preparation for the Thanksgiving holiday. The company reminds readers that "mild increases like this have been common in the middle of the month . Since the recovery started, the strongest declines have typically been seen early in the month, as expiring forbearance plans are removed." The reporting period ended with 2.78 million homeowners in forbearance. This is approximately 5.3 percent of the 53 million active mortgages in the U.S., up from 5.2 percent last...(read more)

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    Fri, 27 Nov 2020 14:17:02 GMT

Mortgage Rates Little-Changed But The Fed Raises Some Doubts

  • Posted To: Mortgage Rate Watch

    Mortgage rates have been operating relatively close to their all-time lows recently and today was no exception. The Fed raised some doubts as to how much longer that would be the case this afternoon when it released the minutes of its most recent policy meeting (from 3 weeks ago). The Fed questioned whether its mortgage-specific bond buying was having any ill effects. That's only a vague hint of a threat, to be fair, but on top of that, market participants also felt the Fed did less than expected to telegraph any enhancement of its bond buying plans (something that traders saw as a stronger possibility for the upcoming Fed announcement in mid-December). The market reaction was almost negligible in the bigger picture, but it looks like it would give a modest bump to rates if markets had more...(read more)

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    Wed, 25 Nov 2020 21:11:00 GMT

MBS RECAP: Fed Minutes Hurt MBS, But Not Quite As Badly As It Seemed

  • Posted To: MBS Commentary

    Fed Minutes Hurt MBS, But Not Quite As Badly As It Seemed Today's Fed Minutes offered a more detailed account of the meeting that took place 3 weeks ago. Markets expected there would be more to learn on the Fed's debate over its bond buying plan. They were not disappointed at the level of information, but MBS were a bit disappointed by the specifics. Prices fell moderately as a result, but at times, the losses looked much bigger than they were due to the illiquid trading conditions that are typical for the day before Thanksgiving. Econ Data / Events 20min of Fed 30yr UMBS Buying 10am, 1130am (M-F) and 1pm (T-Th) Jobless Claims 778k vs 730k f'cast, 748k prev Durable Goods Core CapEx 0.7 vs 0.5 f'cast, 1.9 prev Q3 GDP (1st revision) 33.1 vs 33.2 f'cast, 33.1 prev New Home...(read more)

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    Wed, 25 Nov 2020 20:44:29 GMT

Freddie Mac on Track For 25% More Loans This Year, Most of Them Refis

  • Posted To: MND NewsWire

    Freddie Mac reported this week that its total mortgage portfolio increased at an annualized rate of 25.7 percent in October compared to a 17.5 percent gain in September. The portfolio balance at the end of the period was $2.625 trillion compared to $2.579 trillion the prior month and $2.301 trillion a year earlier. The growth rate for the year to date is 15.2 percent. Purchases and Issuances totaled $137.285 billion and Sales were ($1.706) billion. The September numbers were $114.386 billion and ($3.064) billion, respectively. Single-family refinance loan purchase and guarantee volume was $89.7 billion in October compared to $70.9 billion in September, representing a 71 percent share of total single-family mortgage portfolio purchases and issuances compared to 69 percent the previous month...(read more)

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    Wed, 25 Nov 2020 16:47:00 GMT