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Next New Home Sales Report Should End Slump -MBA

  • Posted To: MND NewsWire

    That applications for mortgages to purchase newly constructed homes rose 30.8 percent in April compared to a year ago is not a particularly useful piece of data given the state the global economy was enduring in April 2021. However, it is good news that the Mortgage Bankers Association (MBA) estimates that new home sales are expected to increase by 8 percent when the April numbers are published. MBA says its estimate of new home sales at an annualized rate of 770,000 units means an end to a two-month slump but, while strong, it is still below the 877,000 unit pace at the end of last year. Mortgage applications were also down month-over-month by 9 percent. The change in application volume does not include any adjustment for typical seasonal patterns. Joel Kan, MBA's Associate Vice President...(read more)

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    Thu, 13 May 2021 20:40:14 GMT

Mortgage Rates Are Actually HIGHER This Week

  • Posted To: Mortgage Rate Watch

    It's Thursday and, thus, time once again to check in with the slew of mortgage rate headlines that typically follow the release of Freddie Mac's weekly mortgage rate survey. Here are a few choice selections: "U.S. Mortgage Rates Fall for Second Week" "Mortgage Rates Continue to Decline" "30-year mortgage rates fall to 3-month low" And so on and so on... The only issue here is that they're all wrong . Rates aren't lower today, nor are they lower this week, nor are they at the lowest levels in 3 months. They're actually at their highest levels in several weeks! You may be wondering who's lying to you at this point, but rest-assured, there is no intentional deception. Quite simply, my claims above take TODAY'S rates into consideration whereas the more upbeat headlines generally pertain to rates...(read more)

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    Thu, 13 May 2021 20:35:00 GMT

MBS RECAP: Supply Storm Weathered (Could Have Been Worse)

  • Posted To: MBS Commentary

    Supply Storm Weathered (Could Have Been Worse) After yesterday's brisk sell-off in the bond market, today's 30yr bond auction was in a position to endorse the weakness or push back a bit. While it wasn't heroic, if we had to pick from those two choices, the auction definitely did more to push back against yesterday's high yields. 10yr yields were more than 3bps lower at the 3pm close and MBS were an eighth of a point higher. We'll need another day of ground-holding (or better) before getting more optimistic about holding this range, but today certainly could have been worse. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Producer Price Index (PPI, Inflation) MONTHLY: ............. .0.7 vs 0.4 f'cast ANNUAL, CORE: ...... 4.1 vs 3.7 f'cast Jobless Claims 473k...(read more)

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    Thu, 13 May 2021 19:49:38 GMT

MLO, Ops Jobs; Cross-Border Lending, Processing, Recruiting Products; MBS Issuance Webinar; Quicken Name Change

  • Posted To: Pipeline Press

    People around the nation are “voting with their feet.” Illinois: Seven straight years of population declines . California: Losing population during a year for the first time in history . Do you ever think about the fact that one city, Shanghai, China, has more people living in it than every state besides California and Texas? (Area-wise, what is the largest city in the United States? That title goes to Jacksonville at 875 square miles, elevation 16 feet.) Did you know that over 80 percent of people who move stay in the same state? One wonders, if higher income people are leaving a particular state, does that create a bigger burden on those who remain, which encourages more departures? Provo-Orem, Utah, Coeur d'Alene, Idaho, and Reno, Nevada, are the top three high-end markets to...(read more)

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    Thu, 13 May 2021 14:44:26 GMT

MBS Day Ahead: We'll Know More About The Ceiling After 30yr Bond Auction

  • Posted To: MBS Commentary

    Bonds are off to a much better start today vs yesterday (it wouldn't take much, consider yesterday was the worst day in 2+ months). This morning's producer-level inflation data was also stronger than expected, but fortunately, it's not nearly the same sort of market mover as yesterday's consumer-level data. 10yr yields seem mostly comfortable staging around the 1.68% level and deciding on their next big move after this afternoon's 30yr auction. The 1.68 level can be thought of as the lower end of a small zone, actually, with the higher end at 1.70. That helps the last 24 hours do a better job of conveying the sense of "staging" mentioned above. Revisionist history? Sure, a bit, but there were two days with relevant bounces closer to 1.70 in April. All that to say...(read more)

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    Thu, 13 May 2021 14:10:06 GMT

Mortgage Rates Moving Higher After Inflation Data

  • Posted To: Mortgage Rate Watch

    After bottoming out at 2 month lows late last week, mortgage rates have been heading higher. At first, the move was relatively gradual, but the pace increased today after a key report on inflation came out much stronger than expected. Why do rates care about inflation? Here's a quick explainer for those who need it: Mortgage rates are primarily determined by trading in the bond market. After all, bonds are essentially loans where the bond buyer is the lender/investor who fronts a lump sum and earns interest over time. Because those investors are realizing value based on payments over time, if inflation robs those future dollars of purchasing power, then the investor/lender's decision to buy that bond is less profitable. If investors have reason to believe inflation will increase (or immediate...(read more)

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    Wed, 12 May 2021 20:35:00 GMT

MBS RECAP: Inflation Data Throws Down Gauntlet. Markets Panic

  • Posted To: MBS Commentary

    Inflation Data Throws Down Gauntlet. Markets Panic It's easy enough to imagine or even expect that near-term inflation spikes are transitory and that it will be a tall order to sustain core annual levels in the 2.5% neighborhood--especially when you're heading into the day with the consensus at 2.3% and the highest forecast at 2.5%. Things change fairly quickly when the actual number comes in at 3.0%, driven NOT by mathematical factors but instead by a bonafide surge in April (0.8% month-over-month versus 0.2% forecast, and 0.6% in March). Neither stocks nor bonds enjoyed the news. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Consumer Price Index (CPI, Inflation) MONTHLY: ............. .0.8 vs 0.2 f'cast ANNUAL, CORE: ...... 3.0 vs 2.3 f'cast Market Movement Recap 08...(read more)

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    Wed, 12 May 2021 20:20:52 GMT

MBS Day Ahead: Bonds Reeling From Inflation Data and Waiting on 10yr Auction

  • Posted To: MBS Commentary

    After last Friday's weaker jobs report, bonds rallied at first, but then bounced into weaker territory in just a few hours. That failure meant bond yields ran the risk of treating 1.53% as a technical floor. It also meant 1.62% stood a greater risk of being challenged, if not broken. Yields edged up to 1.62% yesterday and now today's huge CPI number made it an easy call to jump significantly higher. The afternoon's 10yr auction serves as vote on whether or not to find support at the 1.68% ceiling or proceed to the next technical level at 1.75. Those who follow along fairly closely should have eyebrows raised right now because we've been steadfast in our dismissal of inflation as a market mover for more than a year. But those who follow along super duper closely know that inflation...(read more)

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    Wed, 12 May 2021 14:51:44 GMT

MLO, AE Jobs; Lead Gen, Turn Time, Jumbo Products; Guild/RMS Deal

  • Posted To: Pipeline Press

    Is Better.com worth $7.7 billion , as indicated by the SPAC deal announced yesterday? I guess things are worth the price at which a willing buyer and seller transact. For comparison, the book value of Rocket is $34 billion, UWM $10.9 billion, Guild Mortgage $876 million. I mention Guild because of its acquisition news from yesterday, noted below. And I mention Rocket because of the UWM earnings call yesterday where CEO Mat Ishbia listed off the wholesaler’s accomplishments in the first quarter. UWM Holdings’ stock price, however, is trading near its all time low, its dividend yield is approaching 6 percent, and it is the defendant in a well-publicized lawsuit filed by brokers. Every lender, public or private, is watching economic trends in their areas: record low inventory, builders...(read more)

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    Wed, 12 May 2021 14:41:31 GMT

Mortgage Application Volume Revs Up For The First Time Since April

  • Posted To: MND NewsWire

    Mortgage application volume rose for the first time since mid-April last week. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, increased 2.1 percent on a seasonally adjusted basis during the week ended May 7 and was 2.0 percent higher on an unadjusted basis. The Refinance Index gained 3 percent from the previous week but was down 12 percent from its level during the same week one year ago. The refinance share of mortgage activity increased to 61.3 percent of total applications from 61.0 percent the previous week. Both the seasonally adjusted and the unadjusted Purchase Indices grew by 1 percent from the prior week. The unadjusted Purchase Index was 13 percent higher than the same week in 2020. Refi Index vs 30yr Fixed Purchase Index vs 30yr...(read more)

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    Wed, 12 May 2021 14:35:24 GMT

Even "Off-Radar" Metros Saw Huge Q1 Price Gains

  • Posted To: MND NewsWire

    Metro area home prices rose sharply in the first quarter of 2021 and virtually every part of the country was impacted. The National Association of Realtors® (NAR) said that 99 percent of the 183 areas it tracks posted annual price gains, and for 89 percent (163 areas) those increases were in the double digits. For comparison, in the first quarter of 2020 only a quarter of the areas (46 of 181) had that magnitude of growth. The median price of an existing single family home rose 16.2 percent to a national median of $319,200, the largest gain since 1989. The 11 areas with the most outsized growth, however, were not necessarily those with the most expensive homes. The top increase, 35.5 percent, was Kingston, New York where the median is now $303,100. The highest median price among the 11...(read more)

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    Wed, 12 May 2021 12:07:10 GMT

Conventional Loan Access Expanded in April

  • Posted To: MND NewsWire

    Access to mortgage financing improved in April, driven by a large gain in the availability of both conforming and jumbo mortgages. The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) rose 2.2 percent to 128.1 during the month. An increase in the MCAI indicates that lending standards are loosening. The Conventional MCAI increased 4.8 percent , while the Government MCAI ticked up by 0.1 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased 6.9 percent, and the Conforming MCAI rose 12.6 percent. "Credit availability rose in April, fueled by a 5 percent increase in conventional mortgage credit, as well as an expansion in agency programs for ARMs and high-balance loans. The conforming and jumbo loan indices jumped 7 percent and...(read more)

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    Wed, 12 May 2021 12:05:27 GMT

MBS RECAP: Bonds Still Struggling. 10yr Staging For a Bigger Move?

  • Posted To: MBS Commentary

    Bonds Still Struggling. 10yr Staging For a Bigger Move? After holding ground admirably overnight despite the pull of weaker bond market in Europe, Treasuries and MBS lost ground in the first few hours. By 9:40am, we'd seen the weakest levels of the day and everything was exceptionally sideways after that. Damage was minimal in the big picture (10yr yield up less than 2bps by the 3pm close and MBS down just over an eighth of a point), but the concern is that bonds could be staging for a bigger move depending on the outcome of tomorrow's data and 10yr Treasury auction. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:48 AM Stronger in Asia, but European yield spike pulled US yields higher. Stock selling mitigated some of the damage. Now just barely weaker in...(read more)

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    Tue, 11 May 2021 20:02:23 GMT

Mortgage Rates Moving Higher Again

  • Posted To: Mortgage Rate Watch

    Mortgage rates had enjoyed a solid little run for almost all of April and again in the first week of May. By last Thursday, they were at their lowest levels in more than 2 months in many cases. Even now, they're still closer to those recent lows than to the highs seen at the end of March, but they're definitely higher . Rates are primarily driven by trading levels in the bond market. Those trading levels take a variety of cues, but one of the most basic is that of "supply and demand." Econ 101 teaches us that higher supply begets lower prices, all other things being equal. The same is true for bonds. This week, supply is surging on several fronts with record sizes for Treasury auctions and several large corporate bond offerings. While neither of these are the same bonds that most directly influence...(read more)

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    Tue, 11 May 2021 19:47:00 GMT

Delinquency Rates Leveled Off in February

  • Posted To: MND NewsWire

    Mortgage delinquency rates ticked up slightly in February, the first increase since August 2020 . CoreLogic said the national delinquency rate at the end of the reporting period was 5.7 percent, up 0.1 percentage point from January. The rate indicates the percentage of all mortgages that were 30 or more days past due including those in foreclosure. The rate in February 2020, one month before the COVID-19 virus shut down much of the country, was 3.6 percent. It peaked at 4.3 percent in August 2020. "Some families that had overspent during the year-end holiday season, and then faced financial stress in the new year, may slip behind on a mortgage payment by February," said Dr. Frank Nothaft, chief economist at CoreLogic. "During each of the last five years, the 30-day delinquency rate moved higher...(read more)

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    Tue, 11 May 2021 14:42:19 GMT

Ops. Mgt., MLO Jobs; Renovation, Docs, Retention Non-QM Training Tools; Product Updates

  • Posted To: Pipeline Press

    The real estate and lending industries operate in a world filled with laws, lawsuits, and regulators. (The latest example is REX’s suit against Zillow and the National Association of Realtors – NAR - over the real estate segregation rule, which puts the interests of legacy real estate brokers before consumers.) Does this clip remind you of your Direct to Consumer Department ? Hope not. And I hope that it’s not your Customer Complaint Department either. Here is something every compliance department should read: a National Law Review article pointing out the CFPB’s current thoughts on lending and servicing during the pandemic. Compliance departments are certainly aware of how compensation is paid to AEs and LOs. After analyzing data from its CompenSafe ™ ICM platform...(read more)

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    Tue, 11 May 2021 14:40:31 GMT

MBS Day Ahead: Bonds Bide Time With Fed Speakers and Auction Anxiety

  • Posted To: MBS Commentary

    Bonds lost ground moderately yesterday and blame was most easily assigned to the broad notion of "supply." More specifically, a record-setting round of Treasury auctions kicks off today with 3yr notes, which are by far the least relevant of the 3. Things don't get super serious until tomorrow's 10yr Note auction. Things can also get serious when a huge corporate bond offering hits the market, as was the case with Amazon's $18 bln deal yesterday. Amazon was joined by nine other issuers for a total of nearly $29 bln on the day, which was $3bln higher than the entire previous week, and roughly double the volume seen in the week before that. Corporates are off to another strong start today (i.e. upward pressure on yields) even though no massive Amazon-like deals are expected...(read more)

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    Tue, 11 May 2021 14:08:44 GMT

MBS RECAP: Heavy Issuance Weighs on Bonds

  • Posted To: MBS Commentary

    Heavy Issuance Weighs on Bonds We knew bonds would be skittish about Treasury auctions this week, but the defensiveness began early owing to a big glut of corporate bond offerings. Amazon led the way, accounting for nearly $20bln of the rather epic $34+ bln on the day. Those are numbers we only ever see when one big player is bringing one of the year's biggest bond offerings to the table. How big is $34bln of investment grade debt if it hits all on one DAY? The best way to answer that is to simply remember the Fed only adds $40bln of new MBS in an entire MONTH. The damage was minimal, all things considered, with MBS only losing an eighth of a point as of 4pm ET and 10yr yields up 2bps to 1.60%. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:42 AM modestly weaker...(read more)

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    Mon, 10 May 2021 20:02:53 GMT

Homebuying Sentiment Turns Negative Despite Economic Improvement

  • Posted To: MND NewsWire

    Fannie Mae has conducted the National Housing Survey every month since 2011. Among its most prominent questions are those relating to home buying and home selling: is it a good or a bad time to do either one? Last month the net positive responses for the good time to buy category fell into negative territory for the first time. The good time to sell question had plunged into seriously negative territory (-36 percent) in the spring of last year as the pandemic hit, but this time it remained well above water. Sixty-seven percent of respondents viewed this as a good time to sell versus 26 percent who did not, a net positive of 41 percent, an 8 point gain from March and up 77 points from the disastrous results during the lockdown. However, only 47 percent of respondents thought it was a good time...(read more)

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    Mon, 10 May 2021 15:34:30 GMT

Early Stage Delinquencies Sink to All-Time Lows

  • Posted To: MND NewsWire

    The Mortgage Bankers Association (MBA) reports that the percentage of non-current mortgages dropped by 35 basis points (bps) in the first quarter of 2021. According to MBA vice president Marina Walsh, it was the largest quarterly decline in delinquencies in the history of the Association's National Delinquency Survey. The national delinquency rate for mortgage loans on one-to-four unit residences was at a seasonally adjusted rate of 6.38 percent at the end of the quarter. The rate includes loans in forbearance if borrowers are not making payments as agreed but does not include loans in the process of foreclosure. The delinquency rate peaked at 8.22 percent in the second quarter of 2020 and within three quarters has dropped by 184 bps to 6.38 percent. Despite the improvements, however, the overall...(read more)

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    Mon, 10 May 2021 15:28:44 GMT

Sales Jobs; Retention, Purchase, Servicing, Reverse Products; Webinars and Training; Interview With Economist Elliot Eisenberg

  • Posted To: Pipeline Press

    Here at the MBAG event in Northern Florida some of the topics of conversation is the economy, the inability to predict interest rates, families, and lending. It has been reported that 25 to 34-year old’s spend more on mothers than any other age group for Mother’s Day, which hopefully is not a mea culpa that they should have called more during the course of the year. For the millions of Americans that celebrated Mom yesterday, the hope was probably that they could put a smile on her face after all the ones she had put on theirs over the years. For us parents, there’s no better feeling than seeing excitement on the face(s) of our children. While the frequency of that may wane after they grow up and finally leave the house , my son Robbie told me he is more excited about today’s...(read more)

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    Mon, 10 May 2021 14:09:05 GMT

MBS Day Ahead: Attention Turns to Auctions and Inflation Metrics

  • Posted To: MBS Commentary

    The week gets off to a slow start without any significant data on tap for Monday or Tuesday. The Treasury auction cycle becomes more relevant on Wednesday with a record high dollar amount of 10yr notes hitting the market at 1pm ET. Earlier that morning, core consumer prices (inflation) are expected to come in at 2.3% for april after a 1.6% reading last month. This is a sign of the times as the uptick in inflation (the one the Fed hopes is "transitory") is being seen on several fronts now, not the least of which being market-based inflation expectations at the highest levels in 8-10 years. With visible price surges in several sectors, it's no surprise to see inflation expectations rising. The biggest question remains: how sustainable will this be and what sort of core inflation...(read more)

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    Mon, 10 May 2021 13:44:10 GMT

Rates Reacted to Jobs Report, But Not Like You'd Expect

  • Posted To: Mortgage Rate Watch

    Once a month, the government releases the Employment Situation, also known as "the jobs report." No other piece of economic data is as consistently relevant for the bond market and, thus, interest rates. For most of the past year, the normal correlation between jobs and rates was on hold. That makes sense, of course. Initial lockdowns completely obliterated the labor market and we've been waiting to see how it would recover and how it would be reshaped ever since. In the past 1-2 months, the bond market has finally shown some willingness to react to economic reports. Notably, last month's exceptionally strong jobs numbers put obvious upward pressure on rates. Because of that, anticipation was high for this week's report. Indeed, there was a very big reaction . Economists were expecting the...(read more)

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    Fri, 07 May 2021 23:32:00 GMT

MBS RECAP: Bonds Fail to Capitalize on Super Weak Jobs Report

  • Posted To: MBS Commentary

    Bonds Fail to Capitalize on Super Weak Jobs Report Nonfarm Payrolls came in at 266k compared to a median forecast of 978k. That's one of the biggest misses ever and it was no surprise to see bonds rally significantly in response. It was definitely a surprise to see how quickly and completely the rally was erased in subsequent hours. There are several potential reasons for this. Traders could simply be skeptical that the headline NFP number speaks to the labor market reality, or they could fear the Treasury issuance implication (i.e. weaker jobs = more stimulus = more Treasury issuance = higher rates). Other considerations include next week's looming auction cycle and good, old-fashioned profit taking after a steadily bullish week for bonds, to name a few. Econ Data / Events Fed MBS...(read more)

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    Fri, 07 May 2021 19:44:41 GMT

What's Behind the Surge in Lumber Prices?

  • Posted To: MND NewsWire

    In a recent post on the National Association of Home Builder's (NAHB's) Eye on Housing blog, chief economist Paul Emrath said rising softwood lumber prices have added $35,872 to the price of an average new single-family home , and $12,966 to the market value of an average new multifamily home. The price increases affect any softwood used in structural framing, sheathing, flooring and underlayment, interior wall and ceiling finishing, cabinets, doors, windows, roofing, siding, soffit and fascia, and exterior features such as garages, porches, decks, railing, fences, and landscape walls. Products include not just dimensional lumber, by plywood, OSB, particle and fiberboard, shakes and shingles. Emrath quotes prices from data tracker Random Lengths that, as of April 17, 2020, the total cost to...(read more)

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    Fri, 07 May 2021 15:37:00 GMT