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News

Mortgage News
Category: General
Posted by: webmaster

 

Bad Day for Mortgage Rates. Are the Lowest Rates Behind Us?

Posted To: Mortgage Rate Watch

Mortgage rates didn't have a chance today. Borrowing costs started moving higher early in the session and never looked back. As the day progressed, agency MBS prices fell further and lenders were forced to reprice for the worse. Par 30-year fixed 4.25% quotes are still on the board, but closing costs are at least 15bps higher (+0.15% of loan amount). That's really a best case scenario though. If you're a passenger on the float boat, your closing costs probably increased by about 0.25% today. 4.375% is almost the new par. But 4.25% is definitely still do-able for very well-qualified borrowers (no loan level price adjustments). Now 4.125%, that might be tough. That quote is costing perfect borrowers about 2pts. The culprit of this event? Well. We can't factor out a religious holiday: Rosh Hashanah...(read more)

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ALERT: MBS 8 TICKS OFF LENDER MARKS. REPRICES REPORTED

Posted To: MBS Commentary

MBS prices are officially 8 ticks below lender loan pricing marks. REPRICES FOR THE WORSE HAVE BEEN REPORTED The earlier you received your rate sheet...the more likely you are to see a reprice for the worse in your inbox....(read more)

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MBA Expresses Concerns Over GSE Receivership Framework

Posted To: MND NewsWire

The Mortgage Bankers Association (MBA) has weighed in on the proposed framework for conservatorship and receivership operations for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks set forward by the Federal Housing Finance Agency (FHFA). In a letter to FHFA General Counsel Alfred M. Pollard, Esq ., MBA President and CEO John A. Courson and Chairman-Elect Michael D. Berman said their concerns about the framework are threefold: it is "overly theoretical;" it is unclear what the trigger would be for placing the entities into receivership, and third, the goals of any receivership are unclear. FHFA was established by the Housing and Economic Recovery Act of 2008 (HERA), replacing three other agencies with various responsibilities for regulating Fannie Mae, Freddie Mac (the Enterprises)...(read more)

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Long Bond Struggles to Attract Buyside Demand. Dealers Saturated with Inventory

Posted To: MBS Commentary

Treasury just auctioned $13 billion 30 year bonds . Although the first two auctions of the week were non-events, this reopening did not go smoothly... Demand as measured by the bid to cover ratio was 2.73 bids submitted for every 1 accepted by Treasury. This is just below average but the lowest BTC in the last four auctions. The auction stopped out at high yield of 2.82%, which is 2.7bps above the 1pm "When Issued" yield. This implies the Treasury had a hard time finding willing buyers at current market yields....which explains why primary dealers got stuck with their largest takedown since last October! The street absorbed 55.6% of the auction. That is 10% more than average. Slopdog.. Directs were almost absent, taking down a meager 8.2% of the issue and only 34.6% of what they bid on, this...(read more)

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Loan Pricing Comparison and Pre-Auction Market Update

Posted To: MBS Commentary

We'll get the results of the $13 billion long bond auction in about 20 minutes. Ahead of issuance... Rate sheet influential MBS coupons are just off their session lows. The October FNCL 4.0 is -0-07 at 104-14. Benchmark Treasury yields are just off their session highs. The 10-year Treasury note is -0-19 at 99-05 yielding 2.721% (+6.7bps). The long bond is -1-04 at 101-17 yielding 3.79% (+6.2bps). S&P futures are a few handles off their high print (1112), now +6.75 at 1106. Although production MBS coupon prices are almost 25bps lower, reprices are not an issue at the moment because loan pricing was notably worse on first run releases. On average, rebate was reduced by 24.7bps on the open. Par note rates experienced the largest reductions. Volume has been light across all markets so far today...(read more)

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Flagstar Cutting Warehouse Lines; Section 502 Loans Move Ahead; Increase in Corporate Debt Issuance; Prepayment Speeds Faster

Posted To: Pipeline Press

"Commercial paper" is used by businesses to finance their own working capital, meet payroll and pay suppliers, etc. From the third quarter of 2007 to that of 2008, GDP grew by 3.4%. Did commercial paper keep up?Heck no! Outstanding commercial paper fell by 25%, that works out to about $600 billion. Even worse...asset-backed commercial paper fell by 40%. If borrowing falls by a large percentage, but GDP remains constant, that is decent proof of a credit crunch. This week the amount of corporate debt being sold is unusually high. In a very basic sense, each dollar of corporate debt sold competes for investment dollars with Agency MBS, Treasuries, municipal bonds, etc. It appears that some companies are using the money they raise to expand, or feel that the financing costs are better than issuing...(read more)

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Production MBS Coupons Add to Price Losses After Jobless Claims Data

Posted To: MBS Commentary

Initial Jobless Claims and International Trade data has been released, the results were not bond market friendly. Here is a quick recap: 08:30 09Sep10 RTRS-US JOBLESS CLAIMS FELL TO 451,000 SEPT 4 WEEK (CONSENSUS 470,000) FROM 478,000 PRIOR WEEK (PREVIOUS 472,000) 08:30 09Sep10 RTRS-US JOBLESS CLAIMS 4-WK AVG FELL TO 477,750 SEPT 4 WEEK FROM 487,000 PRIOR WEEK (PREVIOUS 485,500) 08:30 09Sep10 RTRS-US CONTINUED CLAIMS FELL TO 4.478 MLN (CON. 4.45 MLN) AUG 28 WEEK FROM 4.480 MLN PRIOR (PREV 4.456 MLN) 08:30 09Sep10 RTRS-US INSURED UNEMPLOYMENT RATE UNCHANGED AT 3.5 PCT IN AUG 28 WEEK (PREV 3.5 PCT) 08:30 09Sep10 RTRS-TABLE-U.S. jobless claims fell in latest week 08:30 09Sep10 RTRS-US JULY TRADE DEFICIT $42.78 BLN (CONSENSUS $47.3 BLN) VS JUNE DEFICIT $49.76 BLN (PREV $49.90 BLN) 08:30 09Sep10...(read more)

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The Day Ahead: Jobless Claims, International Trade, Bond Auction

Posted To: MBS Commentary

Global markets were generally higher overnight and US equity futures are following on their coattails ahead of weekly employment data, monthly trade gap figures, and the start of the NFL football season. Ninety minutes before the opening bell, S&P 500 futures are +3.50 points to 1,102.75 while Dow futures are 26 points higher at 10,418. So far in September, the S&P has risen 34.3 points and the Dow has gained 236 points. Benchmark interest rates are on the rise as investors reallocate funds into equity markets. The 10-year Treasury note is -0-08 at 99-16 yielding 2.681% (+2.7bps) and the October Delivery FNCL 4.0 is -0-03 at 102-18. “The mood in global equity markets is generally positive,” wrote BMO Capital Markets in a morning note. They mentioned that investor sentiment...(read more)

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Mortgage Rates Mostly Unchanged After Treasury Auction

Posted To: Mortgage Rate Watch

When economic data is thin the stock market tends to have a larger impact on the direction of mortgage rates. The session began with stocks moving lower yesterday. With no data on the economic calendar to reverse the market's direction, the bond market was able to rally all day (higher bond prices = lower bond yields). This allowed most lenders to reprice for the better. Like yesterday, the economic economic was quiet today. Two events influenced the marketplace... The Department of Treasury auctioned $21 billion 10-year notes today. Before the auction, the bond market made room for new debt supply by letting Treasury prices fall (cheapen). This pushed benchmark yields higher and led MBS prices lower. The issue must have gotten cheap enough because auction demand was strong. This led to a modest...(read more)

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USDA Rural Development System Upgrade Complete. Now Processing Conditional Commitments

Posted To: MND NewsWire

In March we learned that USDA Rural Housing funds were expected to run dry by the end of April . A month later, even though the legislation intended to provide the funding had not passed, USDA began issuing commitments for new loans, but there was a caveat: Loan approvals would be "subject to the availability of funds and Congressional authority to charge a 3.5 percent guarantee fee for purchase loans and a 2.25 percent guarantee fee for refinance loans." Finally, on July 29 Congress passed HR 4899 to reestablish the program as one that would no longer be subject to the annual whims of Federal funding but self-sustaining through a 3.5 percent guarantee fee paid by the borrower. Four weeks passed after the Congress did their job and appropriated unlimited funding for the USDA Rural Housing Program...(read more)

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