Mortgage News Daily

  • Posted To: MND NewsWire

    The share of refinancing loans dropped to 38 percent of loans closed in March, down from 43 percent in February. Ellie Mae's Origination Insight Report for the month notes that the 5 percent decline in those loans was consistent across all three loans types, FHA, VA, and conventional. Refinancing slipped as the interest rate on 30-year fixed-rate mortgages rose to their highest level since January 2014. Ellie Mae said that the average rate on closed loans which had been at 4.33 percent in January and 4.48 in February jumped to 4.69 percent in March. The percentage of loans with adjustable rates (ARMs) increased to 6.3 percent from 5.5 percent the previous month. The distribution of loans across loan types was largely unchanged. The FHA share rose 1 percentage point to 20 percent while conventional...(read more)

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    Created: 4/19/2018 6:36:55 AM
  • Posted To: MND NewsWire

    Fewer homes on the market are affordable than a year ago, and fewer households can afford them with their current income. The National Association of Realtors® (NAR) and the realtor.com website have released a list of the least and the most affordable locations nationwide based on the area's income and the website's active listings. The maximum affordable home price assumes that 30 percent of a purchaser's income can go to pay for the financing, property tax, homeowner's insurance costs, and a mortgage insurance premium if required. It is also assumed that the purchase will be financed with a vanilla 30-year mortgage at the prevailing rate advertised by lenders on the realtor.com site. A score of one or higher generally suggests a market where homes for sale are more affordable to households...(read more)

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    Created: 4/19/2018 6:32:00 AM
  • Posted To: Pipeline Press

    Rumors continue to swirl about practically every lender out there, and exaggeration is rampant. A company eliminates low producing LOs in Arizona and suddenly the jungle drums are saying it is closing its Southwest division. A middle layer of management is cut, and word on the street has the company shuttering a whole channel. On the flip side, some companies effectively eliminate an entire channel but leave a few personnel in the headquarters for appearance or to close out the pipeline and eventually be jettisoned – to avoid making a formal announcement. Fannie and Freddie Continue to Modify Requirements Remember that the FHFA has a dual role as both regulator and conservator of the GSEs, Fannie Mae and Freddie Mac, and is also regulator of the Federal Home Loan Banks (FHLBanks). The...(read more)

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    Created: 4/19/2018 6:11:34 AM
  • Posted To: MBS Commentary

    Today was a more serious version of the same sort of warning shots seen at the end of last week. At that time, bond yields rose to challenge an intermediate ceiling at 2.835%, but didn't go out of their way to break it. This week began with higher yields on Monday morning, but a nice recovery throughout the day. When yesterday's gains added to that recovery, it was tempting to hit the snooze button and go back to sleep. Today's trading sounded the alarm, at least to some extent. It might not be loud enough to wake the deeper sleepers out there, but it's important to note that yields have quickly moved back up to the highest levels since before the trade war rally (Fed Day, March 21st). There weren't any big, overt motivations for the weakness. As discussed in the Huddle...(read more)

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    Created: 4/18/2018 1:49:56 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved higher today as bond markets continued a mildly weaker trend for the month of April. Bonds (which underlie rates) are under pressure for a variety of reasons. The most notable headwinds are longer-term and bigger-picture. Rates responded to these headwinds in a fairly big way in Jan/Feb and have basically been "taking a break" since then. Rates have moved very little during this "break," with most borrowers being quoted the same NOTE rate on any given day in the past 2 months. Upfront costs have been the only way the modulate the EFFECTIVE rate of the average lender's 30yr fixed quote. Today's move in bonds brings 10yr Treasury yields to their highest levels since March 21st. While this, in and of itself, doesn't rekindle the same sort of drama seen in the first 2 months...(read more)

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    Created: 4/18/2018 12:25:00 PM
  • Posted To: MND NewsWire

    Access to credit remains tight and the Urban Institute (UI) blames in part that lenders are not measuring the credit risk of borrowers appropriately. Laurie Goodman and Jun Zhu, writing in UI's Urban Wire blog say that paying rent is the most significant financial commitment of most renters. Yet, while credit reports often ding renters for missing rent payments, the performance of good tenants doesn't enter into their credit scores. Considering a borrower's rental pay history , this could be done via bank statements, to the mortgage qualification process, they say, would make assessing renters' credit risk easier. It could also expand access to homeownership among a significant portion of the nation's population. The authors analyzed rental payment histories to see how they might impact mortgage...(read more)

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    Created: 4/18/2018 9:01:59 AM
  • Posted To: MND NewsWire

    They aren't suggesting you shop 'til you drop, but Freddie Mac says neither should borrowers buy the first mortgage they see. Doug McManus and Elias Yannopoulos, members of the company's Economic and Housing Research Group, write in its Insights Blog that shopping for a better mortgage rate could save a borrower hundreds or thousands of dollars. Yet, a 2015 survey by the Consumer Financial Protection Bureau found that almost half of consumers "seriously considered" only one lender before making a choice. More than three-quarters (77 percent) made application with only one lender and very few considered more than three. The Freddie Mac analysts say many borrowers don't even realize that rates offered by lending institutions can vary widely. Their research indicates that just getting one additional...(read more)

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    Created: 4/18/2018 7:36:29 AM
  • Posted To: MBS Commentary

    The term "earnings season" gets thrown around quite a bit in financial news, but what is it, exactly? Simply put, it's a period of several weeks each quarter where a majority of companies release their earnings reports. This is always of interest to the stock market as it's something of a report card for parents wondering how their children are doing in school. The first quarter of 2018 is especially interesting due to tax law changes. It's as if the children are in a new school or using some revolutionary new study aid. All that to say: the number of earnings releases went from the teens to the 40's yesterday as it builds toward more than 200 next Wednesday and more than 300 on the following Wednesday. Bonds don't necessarily care as much as stocks, but they still...(read more)

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    Created: 4/18/2018 6:31:46 AM
  • Posted To: Pipeline Press

    The MBA tells us that both volume and profits were down in 2017. “ Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $711 on each loan they originated in 2017 , down from $1,346 per loan in 2016.” Production expenses grew in all categories: sales, fulfillment, production support and corporate. Keep that in mind the next time anyone questions pricing, asks for a free extension, or wants .250 knocked off the price of that $300k loan to match the guy up the street. Trainings and Events Todd Duncan is hosting his High Trust Sales Academy mortgage training event May 8th-11th in Newport Beach, California. He’s been teaching this event for 26 years and over 12,000 loan officers have successfully completed the training. The event is...(read more)

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    Created: 4/18/2018 6:15:24 AM
  • Posted To: MND NewsWire

    The pace of mortgage applications picked up during the week ended April 13, ending a two-week slide. The Mortgage Bankers Association (MBA) reported its indices for both purchase mortgages and refinances improved significantly compared to the week ended April 6. The Market Composite Index a measure of total application volume, increased 4.9 percent on a seasonally adjusted basis and was 6 percent higher without adjustment. The Purchase Index was also up 6 percent seasonally adjusted and rose 7 percent compared to the previous week on an unadjusted basis. The unadjusted index, which had fallen below the level for the same week in 2017 in the prior report, was 10 percent higher than its 2017 counterpart. The Refinance Index was also up, increasing 4 percent compared to the previous week, but...(read more)

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    Created: 4/18/2018 5:31:12 AM
  • Posted To: MBS Commentary

    With elevated stock/bond correlation of late, it's always worth noting when things move in the opposite direction. Today was such a day, with stocks making solid gains while bonds managed to hold their ground near unchanged levels. Corporate bond issuance and stronger economic data also added to ostensible challenges for rates, thus making the ground-holding all the more interesting. But here are the caveats: 1. Not every part of the bond market held its ground. Shorter maturity bonds (like 2yr Treasuries) lost ground. This pushed the yield curve to its narrowest levels since 2007. This is a reflection of the positive economic data having clear implications for the Fed's rate hike path (which would affect 2yr yields) but fewer implications for longer-term growth and inflation (which...(read more)

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    Created: 4/17/2018 1:47:10 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates had a calm day. Lenders who had offered improved rate sheets yesterday afternoon didn't see much reason to drop rates any further today. Lenders who took a more conservative route yesterday ended up being a little better off. Although there were several economic reports this morning, bonds (which drive rates) did nothing to respond and have generally been uninspired so far this week. In fact, in a broader sense, bonds haven't exhibited much inspiration for more than a month. Although rates have descended modestly since late February, it's just as fair to label that movement as "flat" in the context of typical rate movement. For example, most borrowers would still be quoted the same "note rate," with the only difference being slight changes in upfront fees/points. Loan Originator...(read more)

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    Created: 4/17/2018 1:07:00 PM
  • Posted To: MND NewsWire

    Fannie Mae's economists remain upbeat about economic growth in the medium term but said on Monday that they see increasing downside risks. In its March forecast, the company's Economic Research Team had predicted that growth would slow during the first quarter but with a subsequent pickup that would result in growth of 2.8 percent in 2018. In its current edition of Economic Developments, they say growth slowed more in the first quarter of the year, to 1.7 percent rather than the 2.1 percent expected earlier. At the same time, the government revised its fourth quarter 2018 estimate from 2.5 to 2.9 percent. Based on that encouragement, Fannie Mae has held steady, revising its full year estimate down only 0.1 percent. Fundamentals remain strong and fiscal stimulus from the tax cut and new federal...(read more)

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    Created: 4/17/2018 9:27:44 AM
  • Posted To: MBS Commentary

    Much of the analysis of the past few days has focused on the downwardly sloped trend channel seen in today's first chart. This can be thought of as the "correction trend" that helped bonds settle down after a glut of selling pressure to kick off the new year. From a technical standpoint , that trend has been under attack for the past 3 days. In the strictest sense, it's actually been broken. That said, the technical breakout has been taking the form of a "trickle" so far this week. That begs the question: is there some secret reason to be hopeful about bonds' prospects in the near-term future? Is there some way that rates could get back on track with a moderate rally? Well, anything is technically possible when it comes to the future of rates. There's no...(read more)

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    Created: 4/17/2018 7:16:06 AM
  • Posted To: MND NewsWire

    Both housing permits and housing starts recovered in March from very disappointing performances in February. The New Residential Construction Report , jointly issued by the U.S. Census Bureau and the Department of Housing and Urban Development, has both indicators up for the month, and both beat analysts' expectations. Single family construction however weakened from February rates. Permits for privately-owned residential construction were issued at the seasonally adjusted annual rate of 1,354,000, a 2.5 percent increase from the February rate of 1,321,000. The February number is an upward revision of the 1,298,000 originally reported. Permitting in March was up 7.5 percent compared to the March 2017 rate of 1,260,000 units. Analysts polled by Econoday had made a consensus forecast of 1,315...(read more)

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    Created: 4/17/2018 6:54:10 AM
  • Posted To: MND NewsWire

    Less than a month after reporting some bad news about mortgage production and profits in the fourth quarter of 2017 the Mortgage Bankers Association (MBA) is back with a roundup of those measures for the entire year. The news didn't get any better. MBA said that per-loan profits for 2017 were $711, only slightly more than half the $1,346 in profits reported in 2016. The full year average for 2016 topped that of any single quarter in 2017. "Production profits dropped by almost half in 2017 as rate-term refinancings diminished and the overall average production volume dropped," said Marina Walsh, MBA's Vice President of Industry Analysis. The year started out with a net gain of only $224 in the first quarter but recovered in the second quarter to $1,122 as a reprieve from rising rates boosted...(read more)

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    Created: 4/17/2018 6:18:48 AM
  • Posted To: Pipeline Press

    One of the things that impact servicing values is foreclosure laws, and rates, in certain states. Foreclosures have dropped, thankfully the number of borrowers in trouble has dropped, but certain loan vintages, and certain states, are seeing an increase in higher foreclosures . “Meanwhile we are beginning to see early signs that some post-recession loan vintages are defaulting at a slightly elevated rate, a sign that some loosening of lending standards has occurred in recent years.” Servicing Update Mortgage servicing is the channel to watch right now for tech disruption . “With no one stepping up to transform the stagnant industry for so long, TMS is a welcomed change. As a TECH100 winner , the fintech company continues to deliver on its promise to create a lifelong relationship...(read more)

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    Created: 4/17/2018 6:10:53 AM
  • Posted To: MBS Commentary

    Bonds were quite a bit weaker in the overnight session. According to the average media report, this was in response to Syria-related developments. The "logic" was that because the US had launched missiles into Syria WITHOUT sparking military escalation with Russia, that the whole Syria situation would just calm down from here. Again, you're being asked to believe that the announcement of a US air strike in Syria implies deescalation of conflict in Syria. If you're not quite on board with that, don't worry, you're not alone. I'm right there with you, and while I would admit that Syria-related headlines have had some effects over the past week, there are certainly other things on the minds of bond traders. Overnight, the focus was on Europe at the open (European...(read more)

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    Created: 4/16/2018 2:20:30 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates began the day at higher levels, as bond markets lost ground overnight. Bonds dictate rates, and "losing ground" means bond prices are falling. When bond prices fall, rates move higher. There's some chatter in the marketplace about developments in Syria being the motivation for every little move in bonds/rates. Rather, it's more accurate to say it's ONE OF the motivations behind SOME of the moves. Bonds had a few other concerns overnight. That's why they were able to improve during domestic hours even though nothing changed with respect to Syria. As bonds improved, most lenders ended up releasing positively-revised rate sheets. After the revisions, today's mortgage rates ended up in substantially similar territory to last Friday's. Lenders who didn't reprice are naturally still...(read more)

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    Created: 4/16/2018 1:38:00 PM
  • Posted To: MND NewsWire

    Builder confidence in the market for newly built single-family homes slipped again in April, edging down 1 point to 69. The National Association of Home Builders (NAHB) said its NAHB/Wells Fargo Housing Market Index (HMI) edged down one point to 69. The HMI has slipped 1 point in each of the last three months. The builders' group said however that the Index remains "on firm ground." Derived from a monthly survey that NAHB has been conducting for 30 years, the HMI gauges its new home builders' perceptions of both the current market for newly built single-family homes and expectations for those sales over the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component...(read more)

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    Created: 4/16/2018 8:01:45 AM
  • Posted To: MBS Commentary

    Another week, another change to savor the scent of red herring in the air. Have you ever smelled a herring--let alone a red one? They're oily little bait-fish (like a bigger anchovy) and once out of the ocean (or the bait freezer at your local tackle shop), they don't smell great, whether dyed red or not. Something else that smells fishy are the news media's versions of the fabled herring. The most recent example is the notion that developments relating to Syria are big, fundamental market movers. While I think we can give last week's tweets and the weekend's military actions some credit for having an effect on financial markets, the following charts suggest that the average financial news headline (e.g. "Treasury yields rise as Syria jitters fade") needs to get...(read more)

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    Created: 4/16/2018 7:10:43 AM
  • Posted To: Pipeline Press

    There is always something new in the legal arena, right? Below is news that JPMorgan Chase is pursuing remedies. Is it “legal” for Zillow to compete with real estate agents, or private investors, or to out-bid individuals or families in buying a house? My guess is “yes,” and they have plenty of lawyers to make sure – and join Blackstone and others in buying up single family homes. (More below on this Chase and Zillow news.) Legal Updates Remember the case of the monkey selfie? Even though all the parties settled last September, the court has refused to dismiss the case . (Worth clicking on just to see the darned monkey.) Forget all that stuff about court backlogs… In a more serious matter, Phil Stein, and attorney with Miami’s Bilzin Sumberg Baena...(read more)

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    Created: 4/16/2018 6:14:43 AM
  • Posted To: MBS Commentary

    Bonds were technically stronger today. There is green on the screen right now for everything but 2yr Treasuries. It's not huge, but at least it's in the right direction. 10's ended the day down nearly 2bps and Fannie 3.5 MBS were up an eighth of a point. There is, however, a catch. It quickly becomes apparent if you happen to look at a 5-day chart of MBS and Treasuries as opposed to a 2-day chart. Point being: today was better than yesterday, but not enough to erase yesterday's damage. Bonds basically leveled-off right in the middle of the weaker half of yesterday's trading range. Not only that, but 10yr yields broke back above the 2.795 technical ceiling. If they hold over 2.795 on Monday, it will be the first time we've had back to back closes in the 2.8+ territory...(read more)

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    Created: 4/13/2018 5:33:56 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were slightly higher for most lenders today even though underlying bond markets suggested the opposite. This is partly a timing issue. Yesterday saw bond markets weaken throughout the day. Weaker bonds imply higher rates. After a certain amount of weakness, mortgage lenders will adjust rates and re-issue new rate sheets (aka a "negative reprice"). Many lenders did this yesterday, but not all of them. Even among the group that repriced, most of them did so earlier in the afternoon and bonds continued to weaken through the end of the day. The net effect of all of the above is that most lenders had some catching up to do with bond market weakness that they hadn't fully accounted for yesterday. Those that didn't merely kept rates roughly unchanged. Intraday volatility was, once again...(read more)

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    Created: 4/13/2018 12:52:00 PM
  • Posted To: MND NewsWire

    If they had a report card, the Federal Housing Finance Agency (FHFA) would have been afraid to take it home to mom and dad. Laura S. Wertheimer, FHFA's Inspector General, reported to the House Committee on Financial Services on Thursday about the oversight FHFA provides to the government sponsored enterprises (GSEs) it regulates. It barely got a passing grade. FHFA has a dual role as both regulator and conservator of the GSEs, Fannie Mae and Freddie Mac, and is also regulator of the Federal Home Loan Banks (FHLBanks). Wertheimer noted that the GSEs, even though they are highly leveraged, have a diminished capital buffer and are in conservatorship, have a combined market share of 60 percent of newly issued mortgage-backed securities, and collectively reported $5.4 trillion in assets at the end...(read more)

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    Created: 4/13/2018 8:23:27 AM