banner image not found

Our Latest News

MBS RECAP: Huge Jobs Report, Logical Weakness, and a Nice Bounce, But...

  • Posted To: MBS Commentary

    Huge Jobs Report, Logical Weakness, and a Nice Bounce, But... Bonds did quite well today considering Powell's endorsement of higher rates (yesterday) combined with this morning's significantly stronger jobs report. Most of the push back was seen in MBS, however, and even then, closing levels are only really worthy of enthusiasm when compared to the past 26 hours. The rising rate narrative remains intact until further notice. Could next week's Treasury auction cycle finally be the thing that helps us identify a tactical opportunity for rates to recover? Sure! But betting on such things ahead of time has been costly. Wait for confirmation. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:06 AM Bonds were modestly weaker in Asia, bounced back modestly in...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 22:28:07 GMT

Rates Rising Relentlessly, But Why? And When Will They Stop?

  • Posted To: Mortgage Rate Watch

    Interest rates can't seem to catch a break. February was one of only a handful of months in the past 2 decades that resulted in a 0.50% mortgage rate spike. Despite hopes to the contrary, March isn't off to a great start either. Paradoxically, this rate drama means everything is going according to plan. Why is that? Because the "plan," in this case, is to win the war on the pandemic. That's a multi-faceted issue, of course, and the war is far from over. But most of the battles have deleterious effects on rates when they're going well. At the most basic level, as covid recedes, the economy improves and a strong economy is the quintessential inspiration for rising rates. Inflation is a closely related concept to general economic growth because more "demand" in the economy results in higher prices...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 22:27:00 GMT

UI Urges Abandoning New Fannie/Freddie Amendments

  • Posted To: MND NewsWire

    A new policy paper from the Urban Institute (UI) looks at the recent amendments to the senior preferred stock purchase agreement (PSPA) agreed to by outgoing Treasury Secretary Steven Mnuchin and Mark Calabria, Director the Federal Housing Finance Agency (FHFA) on January 14, 2021. The PSPA governs Treasury's financial relationship with the GSEs Fannie Mae and Freddie Mac. The changes were intended to enable the eventual release of the GSEs from conservatorship by allowing them to build capital and provides milestones for their release. The changes also serve to constrain the GSEs' activities well after their release by putting limits on their business practices including limits on the amount of "high risk" mortgages they can purchase as well as those that finance second homes or investor properties...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 16:54:11 GMT

Rate of Forbearance Improvement Slows as March Expiration Looms

  • Posted To: MND NewsWire

    As Black Knight has repeatedly predicted, end of February expirations drove the number of mortgage loans in forbearance lower this past week. There was a decline of 22,000 loans in forbearance plans during the week ended March 2, an 0.8 percent decline. Black Knight says that there are still more than 100,000 loans in plans that expired at the end of last month that may be under review by servicers for extension or removals. Despite weekly improvement, the monthly rate of decrease slowed from 2.0 percent to 1.3 percent. At the end of the reporting period, the company estimates that 2.69 million homeowners remain in forbearance plans, 5.1 percent of those with a mortgage loan. The largest improvement over the past week was in loans serviced for FHA and the VA. They declined by 13,000 to 1,113...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 16:43:54 GMT

CFPB Extends Compliance Date for New QM Rule

  • Posted To: MND NewsWire

    The Consumer Financial Protection Bureau (CFPB) has proposed to delay the mandatory compliance date of the General Qualified Mortgage (QM) final rule from July 1, 2021 to October 1, 2022. The rule, proposed last June, is designed as a replacement for the so-called GSE patch. CFPB says it is proposing the extension to ensure that homeowners struggling with the financial impacts of the COVID-19 pandemic have the options they need. As originally written at the time of the housing crisis, the Ability to Repay/Qualified Mortgage Rule (ATR-QM Rule) provided a safe harbor to protect lenders from lawsuits charging them with failing to appropriately quantify a borrower's ability to repayment a loan. In general, the QM rule requires that a loan comply with prohibitions on certain loan features, points...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 16:37:00 GMT

MBS Day Ahead: Huge Jobs Report; Bonds Weaker, But Surprisingly Resilient to Start

  • Posted To: MBS Commentary

    Today began with Nonfarm Payrolls coming in at 379k vs 182k forecast. Last month's numbers were revised up to 166k from 49k. The unemployment rate ticked down a hair without being offset by a drop in the labor force participation rate. The hourly work-week returned to more normal levels after hitting a record high in the last report. All of these factors speak to the reopening of various local economies (and the report itself confirmed a massive resurgence in leisure/hospitality/wait-staff). Taken together with yesterday's Powell speech (in which the Fed chair completely avoided throwing a bone to concerns over the recent rate spike), this could easily add to the case for even higher rates than we've already seen. In fact, it did just that at first. Previous highs of 1.614% in 10yr...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 15:30:48 GMT

Recruiting, Training, MLO, AE Jobs; DPA, Tech Products; Principals and Attorneys Weigh in on Wholesale Tumult; Strong Jobs Data!

  • Posted To: Pipeline Press

    In the legal field, virtual litigation is thought to be here to stay, vaccine or no vaccine. And as the pandemic continues, and remote hiring continues for lenders, CEOs, owners, and managers are grappling with the thought of having scattered workforces going forward, and there will be no, “Okay, everyone back to the office!” when people were hired thousands of miles away. And housing is reacting: With 70+ millennials running around, and housing starts and building permits showing about 1.5 million units a year being built, there’s a shortage! Another reason why inventory is so tight? A good portion of housing starts are tear-downs, which means a new structure is replacing an older one, so there is no net change in housing inventory . There are creative ways around that. For...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Fri, 05 Mar 2021 14:59:49 GMT

Mortgage Rates Surge After Powell Comments

  • Posted To: Mortgage Rate Watch

    Mortgage rates jumped quickly today after Q&A session with Federal Reserve Chair Jerome Powell. What did he say to cause such drama? Actually, it's more about what he didn't say. For some reason, market participants were expecting (or at least hoping) that Powell would say something to address the recent run-up in longer term rates. Some commentary went so far as to suggest the Fed would suddenly have a change of heart about a tweak to its bond buying program that it just went to some effort to distance itself from in recent months. The tweak in question is most widely known as "operation twist. " It consists of the Fed selling some of its shorter maturity bonds and replacing them with longer maturities. The net effect is downward pressure on longer-term rates like mortgages and 10yr Treasury...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Thu, 04 Mar 2021 22:27:00 GMT

MBS RECAP: Why Bonds Tanked After Powell (And Why It Was No Surprise)

  • Posted To: MBS Commentary

    Powell Does Exactly What He Was Supposed To (And Bonds Didn't Like It) From this AM: "some recent analysis has GREATLY overestimated the Fed's willingness to "twist."" In simpler terms, there was some buzz about Powell saying the Fed might sell short-term bonds and buy more long-term bonds. That buzz was silly this morning, and Powell confirmed the silliness by passing up 47 opportunities to say anything remotely indicative of twisty aspirations. In other words, sorry long-term bonds... the Fed isn't going to save you. The only surprise here today is the revelation of just how much of the bond market expected something else (as evidenced by the 1.47 to 1.54% sell-off following Powell). SIGNIFICANTLY more detail and explanation available in this commentary piece...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Thu, 04 Mar 2021 21:19:07 GMT

Why Bond Yields Spiked After Powell's Speech Today

  • Posted To: MBS Commentary

    There seems to be a fair amount of surprise and confusion surrounding today's bond market sell-off in response to Fed Chair Powell's Q&A with the WSJ. First off, this wasn't a Q&A so much as a PSA to address some fairly far-fetched assumptions about how the Fed might react to the recent spike in bond yields. It's a sad state of affairs that such an exercise was even necessary considering just how transparent and unified the Fed has been in their message. What message is that? Here are a few of the key points laid out by multiple Fed speakers recently: Rising long-term bond yields are not yet troubling. They reflect economic optimism and rising inflation expectations. This is what should be happening at this stage in the recovery The Fed discussed extending the duration...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Thu, 04 Mar 2021 19:57:32 GMT

LO, Ops, AE Jobs; HELOC, Efficiency, AMC, Sales, VOE Tools; Podcast for LOs; Jumbo and Non-QM News

  • Posted To: Pipeline Press

    Welcome to the only day where the date is a command. Owners of shopping malls wish they could command everyone to go shopping in one. When was the last time you went into a shopping mall? I don’t remember either, and I’m starting to miss those rock-solid pretzels and henna tattoo & ear-piercing booths. Turn them into housing, affordable or otherwise ? Why not?! The aggregate value of reappraised American malls fell an average of 60 percent in 2020 , with 118 retail properties seeing $4 billion in value wiped out over the course of their reappraisals. Of the 1,100 indoor malls in the United States, analysts say only about half have a reasonable chance of survival. Certainly, the hundreds of thousands of loan officers hope their jobs do more than survive in 2021, and to listen...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Thu, 04 Mar 2021 14:56:46 GMT

MBS Day Ahead: Big Risk That Powell Disappoints Bonds By Being Honest

  • Posted To: MBS Commentary

    Monday and Tuesday brought a stronger start for bonds and, with it, hopes that a broader bounce was in the works. Wednesday dashed those hopes and intensified focus on today's livestream Q&A with Fed Chair Powell. Other central banks have more than acknowledged the recent rise in longer-term rates by going so far as to offer reassurance that they'd step in as needed to keep additional spikes in check. But the Fed has been almost completely silent on the topic. In fact, when Fed speakers have mentioned higher rates, it has typically been to say that they make good sense and that they stand as evidence of progress in achieving their goals. Recall that in the last few months of 2020, we were actively discussing the prospects for WAM extensions. WAM = weighted average maturity, which...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Thu, 04 Mar 2021 14:29:07 GMT

MBS RECAP: MBS Outperform, But Bonds Fail To Confirm The Bounce

  • Posted To: MBS Commentary

    MBS Outperform, But Bonds Fail To Confirm The Bounce Tuesday's gains increased odds that a friendly bounce was in the works, but overnight and AM weakness put an end to the optimism. Frustratingly, there weren't any great scapegoats. Data was weaker and none of the potential headline motivations were compelling. If there's some small solace, it's that MBS outperformed rather noticeably, but that really does nothing to alter the broader bond market trend (namely: consolidation in a wide sideways range at the highest yields in a year). Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm ADP Employment 117k vs 177k f'cast, 195k prev. ISM Services PMI 55.3 vs 58.7 f'cast 'Prices Paid' highest since 2008 Market Movement Recap 08:31 AM Bonds were initially mostly flat...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Wed, 03 Mar 2021 20:51:07 GMT

AE, MLO Jobs; Broker, Sales, VOE Tools; URLA and Processing News; More Talk of an Economic Recovery

  • Posted To: Pipeline Press

    To listen to the audio version of today’s commentary with an interview with STRATMOR Group’s resident recovering accountant Jim Cameron on handy metrics for MLOs to be aware of, please click here . Income and revenue are certainly metrics whence people make decisions. Is the profit on a locked, but not funded, loan something a lender should count on their balance sheet? And if so, if the loan falls out, is it a real loss? If you’re interested in accounting nuances, ask your CFO about Interest Rate Lock Commitments (IRLCs ) , an acronym for a lender’s locked pipeline. Some institutions, like Wells Fargo, recognize gain on sale (GOS) income at the time of a loan’s closing, other companies recognize GOS income at the time of lock. (For example, check out the 98 times...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Wed, 03 Mar 2021 15:52:22 GMT

MBS Day Ahead: Early Weakness Means Failure to Confirm Friendly Bounce

  • Posted To: MBS Commentary

    Bonds had a great day yesterday--not so much because the rally covered a ton of ground, but rather because it helped build a case for the end of the more abrupt selling pressure seen in February. The hope was (and still is, to some extent), that March would offer some push back to February's rout. Those hopes were much brighter yesterday , even if we were still feeling cautious due to the inability to break the 1.38% floor in 10yr yields. Today is a different story and a fresh reminder of 2021's rising rate environment. Rather than triumphantly break below 1.38% last night, yields went out of their way to avoid it. Insult was added to injury during European hours where EU sovereign yields led another early morning sell-off in Treasuries. Likely culprits include generally-stronger economic...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Wed, 03 Mar 2021 14:30:54 GMT

Refinance Volume Ramps Down on Rising Rates

  • Posted To: MND NewsWire

    Mortgage application volume rose for the first time in four weeks during the week ended February 26, but it was only a marginal increase. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, increased 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2 percent compared with the previous week. The Refinance Index was 0.1 percent higher than during the week ended February 19 and was up 7 percent from the same week in 2020. The refinance share of mortgage activity decreased to 67.5 percent of total applications from 68.5 percent. The seasonally adjusted Purchase Index increased 2 percent and was 5 percent higher on an unadjusted basis. Volume grew 1 percent compared to...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Wed, 03 Mar 2021 13:25:56 GMT

Mortgage Rates Finally Catching a Break

  • Posted To: Mortgage Rate Watch

    In the past 2 decades , there have been 6 months where mortgage rates rose at least 50 basis points. February 2021 was one of them. Moreover, it was one of only 2 of those months where rates rose without obvious provocation from a significant new, unexpected motivation (the last time that happened was December 2010. The other months were associated with 2013's taper tantrum, the 2016 presidential election, and the market dislocations in March 2020 as covid panic surged). In other words, it was a really bad month for rates--so bad, in fact, that it has increasingly made sense to look for some relief simply because things don't tend to stay that bad for that long. Of course, if there's an exception to how rapidly rates "usually" spike, it has every right to occur after rates have spent an unusually...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 21:40:00 GMT

MBS RECAP: Much Better Day For Bonds. Dare We Discuss It?

  • Posted To: MBS Commentary

    Much Better Day For Bonds. Dare We Discuss It? A fairly flat morning gave way to an afternoon rally, especially for MBS. 10yr yields made "lower highs" for the 3rd day in a row today. Getting "hopeful" has been dangerous for a month now. While we don't know how dangerous it will prove to be this time, it's clearly less dangerous than it was last week. In other words, this is our best day of evidence so far that the recent bond sell-off has run its course for now. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm Market Movement Recap 08:17 AM Slightly stronger overnight, at first. European hours brought a bit of weakness, ushering 10yr yields into the domestic session about 2bps higher than yesterday's close. Currently up only 1bp at 1.434%. 2.5 UMBS are down...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 21:25:55 GMT

Home Price Appreciation Broke an 8-Year Record in January

  • Posted To: MND NewsWire

    CoreLogic says home prices in January were 10 percent higher than a year earlier. It was the first double digit increase in the company's Home Price Index (HPI) since November 2013 . The company had reported a 9.2 percent annual increase in December. The month-over-month increase in home prices nationwide, including distressed sales, was 0.9 percent. Frank Martell, President and CEO of CoreLogic said, "Record-low mortgage rates were a significant driving force behind last year's rebound in housing market activity. However, heavy competition for the few houses on the market drove home prices to historic highs, and mortgage rates are no longer enough to sway the affordability challenges for consumers. While new construction may help balance home prices towards the end of 2021, we may expect to...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 17:22:07 GMT

With Protections Expiring, Millions are in Danger of Losing Their Home

  • Posted To: MND NewsWire

    What happens to homeowners and landlords when the federal, state, and local protections put in place during the pandemic go away? The Consumer Financial Protection Bureau (CFPB) is warning that the answer is hanging in the balance. Moratoria on foreclosures and evictions coupled with widespread availability of forbearance plans have held disaster at bay, but CFPB says 2.1 million families are behind at least three months on mortgage payments, and another 8.8 million are behind on rent. The aggregate 11 million represent 10 percent of total U.S. households. Homeowners alone are estimated to owe almost $90 billion in missed payments. The last time this many families were behind on their mortgages was during the Great Recession. "Put simply," the report says, " we have very little time to prevent...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 15:28:24 GMT

New products, Fee Collection, Sales, VOE Tools; Events and Webinars: All This Week!

  • Posted To: Pipeline Press

    As a kid, magic tricks are amazing because we think there is magic. As an adult, magics tricks are amazing because we know there is no magic. Lenders know that financing a home is not magic, done through sleight of hand. Quite the opposite. Getting a mortgage while you’re grabbing a cup of coffee is misleading, and MLOs bear the brunt of educating borrowers how much arduous work it takes to satisfy them. STRATMOR Group and CFI Group released annual report findings this week for their MortgageSAT Customer Experience Program. The industry’s largest benchmark, based on more than 263,000 surveys in 2020, showed wide swings in customer sentiment over the past twelve months due to pandemic-related factors like capacity strain, extended cycle times, fulfillment burnout, new hiring, and...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 15:18:57 GMT

MBS Day Ahead: Here's The New Short-Term Trend to Watch

  • Posted To: MBS Commentary

    - The absence of stronger gains this week means bonds remain inside their short-term uptrend (see chart) - 100% focus on UMBS 2.5 coupon ( why? ) - "lower high" yield yesterday and again so far today (keeps hope alive), but... - Conversely, no strong commitment to rallying so far this week. - Net effect: sideways and range-bound for now--perhaps even until Thursday's Powell appearance or possibly even Friday's jobs report If yields can manage to rally below the lower yellow line and close in stronger territory for 2 consecutive days, it would present a strong case for the end of this short-term uptrend. That sort of bullish breakout typically presents 2 choices: carve out a new, sideways range or begin a new, short-term rally trend. The latter would probably require some assistance...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Tue, 02 Mar 2021 14:34:24 GMT

Construction Spending Rising Twice as Fast as Expected

  • Posted To: MND NewsWire

    Construction expenditures started 2021 displaying the same imbalance between the growth of residential and non-residential spending that had dominated much of 2020. The U.S. Census Bureau said overall spending in January was at a seasonally adjusted annual rate of $1.522 trillion, 1.7 percent higher than in December and 5.8 percent above the rate in January of last year. This more than doubled the median forecast which called for a 0.8 percent increase. Combined public and private spending on residential construction in January was up 21.1 percent seasonally adjusted from a year earlier. At the end of 2020, overall spending had exceeded the prior year by 4.7 percent while residential spending was 11.8 percent higher. On a non-adjusted basis, total spending for the month was $106.307 billion...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Mon, 01 Mar 2021 21:00:06 GMT

MBS RECAP: Too Strong to Give Up Hope. Too Weak to Rest Easy

  • Posted To: MBS Commentary

    Too Strong to Give Up Hope. Too Weak to Rest Easy - New week, new month, new chance for yields to confirm a ceiling after last week's rout - Mixed results for bonds today with early weakness and a late bounce (especially for MBS) - Very poor liquidity in MBS (buyers and sellers oftentimes FAR apart on their desired prices) - 100% focus on UMBS 2.5 coupon (why?) - Bottom line: not enough weakness to give up hope. Not enough strength to rest easy. Econ Data / Events Fed MBS Buying 10am, 1130am, 1pm ISM Manufacturing 60.8 vs 58.8 (ties highest level since 2004) ISM Prices Paid 86.0 vs 80.0 Construction Spending 1.7 vs 0.8 f'cast Market Movement Recap 08:53 AM Flat in Asia then moderately weaker in Europe. 10yr low = 1.38%. Highs of 1.456% this morning, but already pushing back down (1...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Mon, 01 Mar 2021 20:57:15 GMT

MBS Day Ahead: Battle For The Bounce (And Fibonacci Strikes Back?)

  • Posted To: MBS Commentary

    After Friday's impressive (and much-needed) bounce toward lower yields, the new week/month took on even greater importance than normal as a venue for a shift in the recently ultra-bearish tone. In other words, yields have been surging relentlessly higher, and it's about damn time for a ceiling bounce (or so we'd hope). Friday's afternoon gains increased those hopes, and maybe even the odds. If we get the bounce we're hoping for, you'll know it. It will be big and decisive. If, on the other hand, yields merely chop around in a wide, sideways range (let's say 1.38 - 1.62), it will be confirmation that the market is entering the "acceptance" phase of it's grieving process over the loss of low yields. Why focus on the levels of 1.38-1.62? Chart nerds already...(read more)

    Forward this article via email:  Send a copy of this story to someone you know that may want to read it.



    Mon, 01 Mar 2021 15:13:53 GMT