Mortgage News Daily
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MBS CLOSE: 4.5 MBS At Highest Levels Since May 6th
Posted To: MBS Commentary
The headline may be the most exciting thing about today and does much to counter the suggestion that the journey is more important than the destination. Indeed, today's destination is much more of a conversation piece than the journey. In the interest of delaying what may or may not be perceived as "rain" on your respective parades, we'll go a bit out of order and start with the medium term picture of MBS showing a higher close than early October. Like we said, one has to go back to May 6th to find a higher close in 4.5 MBS, although you be the judge as to whether or not rates on May 6th are the same rates you're seeing today... No seriously, I'm not going to pull up the old rate sheets, so please tell us! Regardless of the "personal best" for the 2nd half...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS AFTERNOON: Day Traders Bring Rates Full Circle. Reprices Reported
Posted To: MBS Commentary
Heading into the after hours session, the FN 4.0 is +0-05 at 99-17 yielding 4.053% and the FN 4.5 is +0-05 at 101-30 yielding 4.263%. The secondary market current coupon is 4.095%. The CC is +73/10yr TSY and +61/10yr swap. Several lenders have repriced for the better as price improvements have held since the choppy reaction the 2 yr note auction. In the MBS market, trading flows have been slow and volume below average. "Rate sheet influential" yield spreads are marginally tighter as supply from originators has been muted. As the FN 4.5 tests the 102 price handle expect to see profit taking pick up...especially when benchmarks are benefiting from a bid (offers getting lifted). All this means is we dont expect to see MBS prices venture too far into the 102-00 price handle (without spreads...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Existing Home Sales Surprise to Upside. Discussing Broader Implications
Posted To: MND NewsWire
The National Association of Realtors released Existing Home Sales data this morning. READ HOW THE NAR COMPILES DATA AND GAIN A BETTER UNDERSTANDING OF SEASONAL INFLUENCES In last month's report from the NAR, existing-home sales jumped 9.4 percent to an annual rate of 5.57 million units in September from a level of 5.10 million in August. Sales activity was at the highest level since hitting 5.73 million annualized units in July 2007. Total housing inventory at the end of September fell 7.5 percent to 3.63 million existing homes available for sale, which represented an 7.8-month supply. The national median existing-home price for all housing types was $174,900 in September, In this month's report, existing-home sales surged 10.1 percent to an annual rate of 6.10 million units in October...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS LUNCH: (Alert?) AUCTION RESULTS
Posted To: MBS Commentary
Auction bullet points: $44 BLN 2-YEAR NOTES AT HIGH YIELD 0.802 PCT, AWARDS 95.78 PCT OF BIDS AT HIGH BID-TO-COVER RATIO 3.16, NON-COMP BIDS $416.6 MLN PRIMARY DEALERS TAKE $22.08 BLN OF 2-YEAR NOTES SALE, INDIRECT $19.36 BLN After the results, MBS sold off 4 ticks or so, nothing major. Tsy yields in the long end had already conceded up to around 3.4, and so only moved marginally higher before joining MBS for some moderation. Said moderation has made for more or less unchanged levels from pre-auction trading. Here's how it all looks.. So this is why we advise more patience than you might want to have following auctions... The first move down was quasi alert-worthy, but now we may be headed back to test the resistance in more positive areas of the day. Stay tuned!...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS MORNING: MBS Improving vs. Treasuries
Posted To: MBS Commentary
As the noon hour approaches, MBS are up on the day with the 4.5 up 2 ticks to 101-27. Meanwhile, treasuries are still down on the day with the 10yr off 4 ticks, bringing the yield up to 3.381. Without support from some positive price movement in tsy's, MBS may have a tough time moving much higher. On the two day chart, we can see MBS struggle with 101-28 despite tsy yields being slightly lower than this AM: There are a couple disturbing developments in tsys that suggest they may have a tough time of their own with important technical levels. Well, at least they've had a tough time so far today in terms of the 3.38 inflection point in 10yr yields. 3.38 served as almost perfect support all week in addition to it acting as a noticeably inflection point for months. But with the slightly...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Holding Near Six Month Rate Lows. Why Float When Rates Are This Low?
Posted To: Mortgage Rate Watch
Last week ended basically where it began with prices of mortgage backed securities moving sideways near record highs and mortgage rates holding steady near six month lows. MBS traded in a very narrowing range as the week progressed which allowed lenders to publish base 30 year conventional mortgage rates in the 4.625% to 4.875% range. While the week ahead is holiday shortened in observance of Thanksgiving, there is still plenty of data to take note of...housing data specifically. The week begins with Existing Home Sales data from the National Association of Realtors. This release totals the number of previously constructed homes in which a sale closed in the previous month. Recent reports have shown existing home sales moving higher thanks to near all time low mortgage rates and government...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Loan Pricing Observations; 401(k) Ramblings; Investor Updates: Wells, Flagstar, AmTrust
Posted To: Pipeline Press
I was showing my Dad my cell phone over the weekend. He said, "Son, no one gives a damn about all the things your cell phone does. You didn't invent it, you just bought it. Anybody can do that." Life with Dad, always an adventure... Speaking of buying things, us taxpayers bought us another bank on Friday, although Central Bank of Stillwater, MN agreed to assume all of the failed bank's deposits and all of its assets. Commerce Bank of Southwest Florida was taken over , and for those keeping a tally, it was #124 for this year and the 12th in Florida. They had total assets of about $80 million and total deposits of about $76.7 million, according to the FDIC. The FDIC and Central Bank will share in losses on about $61 million of Commerce Bank's assets. Do you have a 401(k...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS OPEN: Rates Higher. Price Action Choppy
Posted To: MBS Commentary
In the week that was, mortgages traded in a narrowing range as 10yr TSY notes bounced back and forth between positional resistance and support. While the range bound behavior of our benchmarks contained MBS price directionality, lock desks were busy as originators took profits on peaking MBS prices and consumers pulled the trigger on six month low mortgage rates Last week the market was, for the most part, stuck in wait and see mode. While this week's schedule is jammed packed with data, auctions, and month end events, one has to wonder how the absent minds of thankful market participants will react to the confluence of data and events that fill the economic calendar this week. That said, the extent to which we are able to place indicative values on reactive price action may be limited...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Week Ahead: Housing Data to Drive the Market
Posted To: MND NewsWire
The US dollar is weaker, equities are higher, and gold is soaring. That’s how the Thanksgiving-shortened week is beginning after markets slid back late last week. Led by global markets, US equities are looking to open 1% higher on Monday. Conversely, Treasuries are weaker with the benchmark 10-year yield up 2 basis points at 3.38%. Analysts from BMO note the Treasury is issuing $61 billion in short-term bills and $118 billion in 2-, 5-, and 7-year notes this week. “Given the recent hearty appetite (amid concerns about a flagging recovery), [the market] should have little difficulty swallowing the lot,” they said. Meanwhile, gold prices are flying $19 higher at $1,166 per ounce as the dollar continues to weaken. Key Events This Week: Monday: 10:00 ? Existing Home Sales are...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Carbon Neutral Home Shaping Up
Posted To: The Green Home
In September we introduced a project in Southhampton (Long Island), New York under which is being built a completely carbon-neutral home from the ruins of devastating residential fire. As background, the home of David Dubin and his family was hit by a major fire on December 22 of last year. The fire ruined the center of the house but left the shell. The original house was a relatively new shingled, center entrance colonial that looked like hundreds of thousands of houses in the region. The new house, while it will be built from the remains, will have an 800 foot addition (an 4000 sq. ft total) and will resemble the Canadian "lodge houses" Mrs. Dubin recalls from her childhood in that country. The house, at least from viewing the architectural drawings, is quite spectacular. The designers...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage Industry Leads Accountability and Transparency Reform
Posted To: Community Commentary
Transparency is the new buzz word in the financial world, especially in the mortgage industry. W hile government officials and financial pundits pay "TRANSPARENCY" plenty of lip service, those of us working on the front lines of origination live with it on a daily basis. I would go as far to say, from a point of sale perspective, MORTGAGE ORIGINATORS HAVE QUICKLY BECOME THE MOST ACCOUNTABLE MEMBERS OF THE FINANCIAL SERVICES INDUSTRY. Imagine the potential protection consumers might benefit from if all commission based financial services professionals were forced to follow in our crystalline footsteps, conducting every aspect of their businesses in the spirit of undisguised disclosure, in an environment of extreme accountability. Perhaps it would seem fit to start with car sales? Suppose...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS CLOSE: Extremely Flat, Range-Bound Week
Posted To: MBS Commentary
Despite the 4 tick improvement on the day that leaves MBS just about as close to all time highs as we could ask for, the lack of excitement this week is a bit of a let down. Sure, there was plenty of chopatility earlier in the week in MBS, but not only was it mostly confined to the range, prices actually ended exactly where they started on Monday! At least the boring and range-bound nature of the week made for plenty of predictability as the only real technical levels worthy of mention played important roles throughout the week. 101-21 became eerily supportive as the week progressed. and 101-27 mentioned as a pivot point on Monday and Tuesday maintained it's technical significance as resistance by week's end. In tsy's, the story was clearly about 3.31 and 3.38. (3.31 is an intraday...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS AFTERNOON: Grinding to the Right
Posted To: MBS Commentary
Its 430 on a Friday afternoon. The market is resting after a week's worth of grinding to the right. (Note sarcasm.) It was exciting when the week began...but it sure did fizzle out into the close. Everything we watch turned a profit this week. We hope you followed the crowd and booked a few extra bps yourself. Gobble Gobble. I can smell the mashed potatoes.... Enjoy the weekend PS. Smash someone up Tucker. go 44...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS LUNCH: Uneventfully Coasting Into The Weekend
Posted To: MBS Commentary
With absolutely no exaggeration, all but one, maybe two of the times I've looked at my screens before writing this week MBS have been between -2 and +2 ticks on the day while changes in tsy's have been more pronounced. Same story today, at least on a price level, as 4.5's are up 2 ticks to 101-23 whereas 10's are down 6 ticks, bringing the yield up to 3.362. Neither of those levels are especially interesting as they both lie above levels that have supported 99% of the trade this week. For MBS, the level is obviously 101-21, which has received more than its fair share of mention this week, and likely needs no further introduction. And though we haven't seen much of it this week, the 3.38 lvl in tsys is equally significant. It just draws more of it's credibility from weeks...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS MORNING: Reminder of Rates Reality
Posted To: MBS Commentary
Much of our analysis this week has focused on the technical dynamics of range limits and the interconnected relationship between the market's perception of fundamentals and trader's ongoing short term profit churning positional tactics. While some of the explanatory logic we have provided was mere exploratory reasoning based on the speculative maneuvering and strategery (been waiting to use that one) of performance driven traders, we have continued to rely upon the same concepts and indicators that have driven price action for the majority of 2009: the Federal Reserve's consistent presence in the agency MBS market and the bond market's ongoing independence and outperformance. An unwavering reliance on these themes has served as a stable foundation with which we build our directional...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage Rates Bottom Out. Lock'em If You Got'em
Posted To: Mortgage Rate Watch
While benchmark interest rates continue to chop around in a contained range, mortgage-backed securities have moved sideways, failing to make much progress in either direction. Although we have experience a few moments of added volatility, tight trading ranges have kept and generally "topped out" MBS prices have kept mortgage rates stable all week, near six month lows. There are no scheduled data releases today. Reports from fellow mortgage professionals indicate mortgage rates to be unchanged from yesterday. The par 30 year conventional rate mortgage continues to hold in the 4.625% to 4.875% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Jumbo Loan Market; Short Sale Responses; Updates: Chase, SunTrust, GMAC; DR Horton Loses $223 Million
Posted To: Pipeline Press
One top ex-secondary guy wrote to me and said, "Things I sort of miss hearing in mortgage banking: "What are rates gonna do tomorrow?" "Why is IndyMac a point better than we are?" Anything associated with "Did you hear what they said on CNBC this morning.......?" "How come I'm losing money on the hedge?" And "See that rep over there? We ended up naked in a hot tub at a conference back in '94." I tell you, sometimes this commentary writes itself. Right now, companies all over the US are talking about next Friday: Black Friday! Either companies are closed, and the employees have the day off to go spur the economy, or companies are open. Those that are open may have low seniority people at the desks, or people who don't care about...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS OPEN: Choppy Benchmark Prices. Sideways MBS Movement
Posted To: MBS Commentary
Got this email update from eFannieMae last night.... Fannie Mae lanza nuevo HomePath.com en español, con el propósito de ayudar a más hispanos a adquirir su vivienda. Herramientas interactivas e información diseñada para guiar a los potenciales propietarios a través del proceso de adquisición de una vivienda y prevenir una ejecución hipotecaria Fannie Mae Launches New HomePath.com in Spanish Aimed at Helping More Hispanics Buy Homes. Interactive Tools and Information Designed to Guide Potential Homeowners Through Homebuying Process and Prevent Foreclosure I wonder how many homes went/will go into foreclosure because the borrower wasn't a citizen... Banco Popular anyone? Recap of Yesterday Jobless Claims: 505k vs. 505k expected. Unchanged...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Day Ahead: Empty Econ Calendar. Stocks Set to Slide at Open
Posted To: MND NewsWire
In line with weak global markets, US equities are looking to open lower this morning. Two hours before the bell sounds S&P 500 futures are down 8.2 points at 1,086 and the Dow is off 68 points to 10,259. Following the trend, commodity prices are also weaker. WTI Crude oil is trading 52 cents lower at $77.53 per barrel and Spot Gold is down $4.95 to $1139.65. “Risk is still off this morning, with equity markets weighed down by a disappointing earnings report from Dell,” noted Robert Kavcic from BMO Capital Markets. The computer maker yesterday reported net income of $337 million in the third quarter, or 17 cents per share, well below Q308 income of $727 million, or 37 cents per share. Key Events? Some days are slow and this is one of them. No economic data from the US is scheduled...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS CLOSE: Range Holding Makes For Boring Day
Posted To: MBS Commentary
Earlier in the day we discussed movement in MBS prices that brought 4.5's to their lowest levels of the session, but we mentioned some support for MBS as well as some support for tsy yields that had been weakening at the same time. By closing time, those ranges identified much earlier in the day held up, carrying us into tomorrow, a data-free options expirations Friday with little to no suggestion for directionality. Turns out that 101-21 was a pretty solid area for 4.5 support. And in 10's, despite a couple exploratory movements toward 3.36, 10's finished in better territory vs. their support. Volume was evenly distributed and nothing to write home about as we were mostly on par with yesterday's levels. To reiterate the sense of uncertainty going into tomorrow, today did nothing...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Fed MBS Purchases Focus on New Loan Production
Posted To: MND NewsWire
The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the five trading days between November 12 and November 18, the Federal Reserve purchased a total of $17.23 billion agency MBS. In those five days the Federal Reserve sold $1.23 billion agency MBS (dollar rolls) bringing net purchases to a total of $16.00 billion, $2.5 more than the previous, holiday shortened week. The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBA Reports Record Delinquency Rates. Will Get Worse Before Improving
Posted To: MND NewsWire
Mortgage loan delinquencies continued to rise in the third quarter according to information released on Thursday by the Mortgage Bankers Association (MBA). Loans on one-to-four unit family homes that were delinquent, but not yet in foreclosure, reached 9.64 percent of all loans during the third quarter. This is an increase of 40 basis points over the second quarter of 2009, breaking the all time record set at that time . The rate is 265 basis points higher than the 6.99 percent delinquency rate reported one year ago. 3.57 percent of all loans were 30 days past due compared to 3.68 percent last quarter and 3.39 percent one year ago. 1.67 percent of all loans were 60 days delinquent compared to 1.68 percent and 1.40 percent on year ago Seriously delinquent loans - those over 90 days or in foreclosure...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS AFTERNOON: Flat on the Day With Room to Move Lower
Posted To: MBS Commentary
Heading into the close, the FN 4.0 is trading +0-02 at 99-09 yielding 4.078% and the FN 4.5 is +0-02 at 101-24 yielding 4.286%. The secondary market current coupon (CC) is 4.13%. The CC is +78/10yr TSY and +67/10yr swap. As you can see in the chart below, after prices fell early in the week, "rate sheet influential" MBS prices haven't made much progress in either direction with most of the price action occurring between 101-26 and 101-20. This should continue into today's close. Again...lock!...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS ALERT: Lows Of The Day, But Still Within The Range
Posted To: MBS Commentary
This is one of those obligatory alerts where price action in context doesn't justify an alert, but MBS prices have touched their lows of the day. In addition tsy's have broken out of their trend of improvement on the day with the 10yr backing up 3.35. Will there be reprices? Tough to say, considering the nice, flat resistance going back to yesterday at 11am. That coincides with some internal support at just over 3.35 in tsys. So personally, I wouldn't be rushing to lock anything that wasn't locked already. However, given the lock bias of the hedge ratio, that might constitute a different swath of your pipeline... If you can risk it, roll with it and wait to see if 3.35 tsy's break or 101-21 MBS breaks. Some lenders will reprice for the worse, but many will not (not unless...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
House Amendment Poses Threat to Lending Liquidity
Posted To: Voice of Housing
On the same day that Treasury Secretary Tim Geithner was in downtown Washington calling on banks to boost lending , up on Capitol Hill the House Financial Services Committee passed an amendment to that would do just the opposite. At an Obama administration summit on strengthening credit flows to small businesses, Geithner said “We need banks to be working with us, not against recovery." At the very same time on Wednesday, an amendment from Reps. Brad Miller and Dennis Moore would allow the FDIC to impose a 20 percent haircut on all secured creditors, including the 12 Home Loan banks, when resolving systemically important institutions that fail. The amendment, said to be pushed by FDIC chair Sheila Bair, is aimed at ending the Home Loan banks' priority status in the event of a...(read more)Forward this article via email: Send a copy of this story to someone you know that may want to read it.
