Mortgage News Daily

  • Posted To: MBS Commentary

    Monday was the slowest day of the year in terms of volume. Volatility was also very muted by the time US markets fired up for the day. But here comes Friday! Not to be outdone by that pesky old Monday, today took the quiescence to a level so high that I felt compelled to tell you about it again. Realistically, this is something market analysts do because the quiet conditions don't leave anything else to talk about. With all that in mind, I won't waste your time with 3 or 4 more paragraphs of filler. For those hoping to see 10yr yields hold a ceiling around 3% in 2018, 2.895% is a great place to be. For those who understand the headwinds facing rates, it's also a logical place to be. Whether rates pay more attention to the headwinds or the hope remains to be seen. In some ways, it...(read more)

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

    Created: 6/22/2018 4:24:03 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved slightly higher today. Yet again, underlying bond markets suggested another fate. In other words, if mortgage rates were perfectly tied to underlying bond markets, they would have remained unchanged today. So why didn't they? The answer is as simple as the timing of lender rate sheets. Bond markets were in slightly weaker territory earlier this morning. This resulted in lenders offering slightly higher rates. As bonds improved throughout the day, the gains weren't quite enough for those lenders to "reprice" to lower rates. There's a certain bar to clear in terms of market movement before reprices make sense and we didn't clear it today. Loan Originator Perspective Bonds seem rudderless with no clear direction. Continue to Lock at Origination. - Al Hensling Not so sure there...(read more)

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

    Created: 6/22/2018 3:50:00 PM
  • Posted To: MND NewsWire

    In back-to-back blog posts in the National Association of Home Builder's (NAHB's) Eye on Housing Blog , Paul Emrath details both the extent of the current shortage of lumber facing homebuilders and its impact on home prices. Emrath says that shortages of framing lumber are now more widespread than at any time since NAHB began consistently tracking it in1994 and that a large majority of builders seeing lumber prices specifically affecting affordability. Emrath's conclusions grow out of results from special questions included in the April and May NAHB/Wells Fargo Housing Market Index surveys. Over 30 percent of single-family builders responding to the May survey's special questions reported a shortage of framing lumber , far more than reported shortages in any of the other 22 building products...(read more)

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

    Created: 6/22/2018 9:33:01 AM
  • Posted To: MND NewsWire

    The Trump Administration formally rolled out a plan on Tuesday to massively reorganize the federal government . The proposal is largely the work of Office of Management and Budget Director and acting head of the Consumer Financial Protection Bureau (CFPB) Mick Mulvaney, but the Administration admits the blueprint for the reorganization was produced by the Heritage Foundation. The 132-page document touches nearly every part of the executive branch. Prior to the release, media attention was focused on the rumored plans, confirmed by the document release, to combine the cabinet level Departments of Labor and Education into a single unit called the Department of Education and the Workforce. The explanation for this change is the need to meet needs of American students and workers from education...(read more)

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

    Created: 6/22/2018 7:20:32 AM
  • Posted To: MBS Commentary

    When a single, clearly-delineated event was responsible for 30bps of movement in 10yr yields in the matter of a few days, it's hard to get too worked up about 10bps of movement over the same time frame. It's even harder when that 10bps has occurred well-inside that 30 bps AND when any individual day has been limited to about 6bps. The above is in reference to the 3.10% to 2.80% drop (and subsequent rebound) in yields surrounding the Italian drama of a few weeks ago. Since then, bonds have been pretty indecisive and paralyzed . Without any significant data or events on the calendar, and with this being a Friday during a time of year when traders are more wont to eye the exits early, there is a high bar in place for any of today's market movement to be classified as "meaningful...(read more)

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

    Created: 6/22/2018 6:20:37 AM
  • Posted To: Pipeline Press

    Don't have the time, or money, to take a trip to Scottsdale, Ariz., to see Frank Lloyd Wright's winter home and studio, Taliesin West? Well, that issue will no longer limit would-be visitors. Thanks to the latest immersive online virtual experience visitors can explore the architectural site and its grounds online in 3D. Show that to your builder clients! Conventional Conforming Tweaks Continue No politician can snap their fingers and make something happen, right? We’ll see. Politico published a Trump administration plan to reorganize the federal government by combining several existing departments and a proposal to privatize Fannie Mae and Freddie Mac, eliminate their statutory charter, and subject them to competition. Not so fast. The GSE plan is merely an outline and requires congressional...(read more)

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

    Created: 6/22/2018 6:00:13 AM
  • Posted To: Mortgage Rate Watch

    Mortgage rates were microscopically higher today, which is paradoxical on two levels. The first paradox has to do with today's bond market improvements. Bonds underlie rates and bond market improvements coincide with rates moving lower--usually! In some cases, the day-to-day change in the bonds that underlie mortgage rates can be quite a bit smaller than the change in US Treasuries (the core of the US bond market). That was part of the problem today. The other part had to do with weakness yesterday afternoon. That weakness meant today's improvements merely got mortgage-backed bonds back to yesterday morning's levels despite being in stronger territory compared to yesterday afternoon's latest levels. The second paradox has to do with the most prevalent mortgage rate headline out in the world...(read more)

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

    Created: 6/21/2018 2:35:00 PM
  • Posted To: MBS Commentary

    Grandparents will always have at least a few stories about "the way things used to be." Those old ways may seem inefficient, strange, wonderful , or all of the above to the younger generation. For market watchers, the generational divides aren't measured in 2-3 decades but rather 2-3 years (and sometimes 2-3 days!). With that in mind, our market-watching forebears have stories of this stuff called "economic data" that was released on a set schedule. When the data was released, bond would often react predictably . For example, data that suggested economic weakness would help bonds and vice versa. It turns out economic data is still a thing! It just hasn't been on the current generation's radar, apart from a few key exceptions like Nonfarm Payrolls and CPI. But...(read more)

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

    Created: 6/21/2018 2:31:07 PM
  • Posted To: MND NewsWire

    There has been a lot of hand-wringing for going on two years or so about the incredible shrinking inventory of homes for sale . This week CoreLogic analyst Molly Boesel joins the chorus with another analysis of the problem. Boesel says the inventory of existing homes is at its lowest level in more than 18 years and continues to decrease (although the National Association of Realtors now reports two consecutive months of increasing listings,) and new home construction isn't helping. This has resulted in an inventory shortage "at a time when demographic and economic indicators are moving upward for the housing market." A "month's supply" measure is used in most inventory reports. This indicates how many months it would take to sell the available inventory at the current sales pace and if no other...(read more)

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

    Created: 6/21/2018 7:26:14 AM
  • Posted To: MBS Commentary

    By now, it's no great secret that pundits, analysts, and financial firm principals are pontificating on the next economic downturn. Guesses vary, but 95% of them are within the next 2 years. Perhaps as many as half of them are targeting a time frame of 12 months or less. Certainly, trade war potential combined with central bank normalization underpin much of this general thesis, but there's also the simple matter of "economic cycles" combined with the fact that the current expansion has been record-breaking in many regards. Given that the Great Recession was record-breaking in its own right (i.e. it was "really bad"), it's not really surprising that the bounce back could last longer and achieve greater successes than previous recoveries. As such, markets have...(read more)

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

    Created: 6/21/2018 6:50:15 AM
  • Posted To: MND NewsWire

    There was another 0.1 percent increase in the Federal Housing Finance Agency's (FHFA's) House Price Index (HPI) in April. The index, which is calculated using home sales prices from mortgages sold to or guaranteed by the government sponsored enterprises (GSEs) Fannie Mac and Freddie Mac, was up 6.4 percent compared to April 2017. The April report also revised the 0.1 percent increase reported earlier for March up to 0.2 percent. Price changes in the nine census divisions tracked by FHFA from March to April ranged from a downturn of 0.5 percent in the West South Central Division (Oklahoma, Arkansas, Texas, Louisiana) to an 0.6 percent gain in the East North Central division which encompasses Michigan, Wisconsin, Illinois, Indiana, and Ohio. Year-over-year changes were all positive , ranging...(read more)

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

    Created: 6/21/2018 6:46:09 AM
  • Posted To: Pipeline Press

    Huh? Rumors again that FHLB Atlanta is exiting the HFLB Xtra mortgage program effective at the end of this year? Who can keep track of all the rumored, and actual, changes in the biz? (Keeping with the Atlanta theme… no establishments from that locale made the latest list from Travel and Leisure of “The Best BBQ in the U.S.” .) More credit and underwriting guideline changes below. Credit and Underwriting Changes, Shifts in Approval Guidelines Back on April 16th, credit-reporting agencies dropped all information on tax liens and court-ordered debts from consumer credit reports and ratings. Underwriters and LOs noticed the difference, as about 17% of consumers saw their credit scores rise. Some bankers say the change is unfortunate because the mere existence of a tax lien speaks...(read more)

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

    Created: 6/21/2018 6:07:27 AM
  • Posted To: MND NewsWire

    Loans for home purchasing continue to dominate mortgage originations and Ellie Mae says they may now represent the largest share of loans since the recession. The company's May Origination Insight Report put the purchasing share at 70 percent, the largest percentage at least since they started tracking the figure in 2011. Purchase loans made up had 66 percent of closed conventional loans, 75 percent of VA loans, and 80 percent of those backed by FHA. The 30-year interest rate for loans closed during the month was also the highest in Ellie Mae's history , up 5 basis points from April to 4.84 percent. The distribution of loans across loan types was unchanged for conventional and FHA loans at 66 percent and 28 percent respectively while VA loans upped its share from 9 to 10 percent. The percentage...(read more)

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

    Created: 6/21/2018 5:04:04 AM
  • Posted To: MBS Commentary

    Before the Italy drama picked up at the end of May, bonds were very much on the bad side of the fence. Italy quickly punted rates to the other side of the proverbial fence , but the good times didn't last long. As we moved toward last week's central bank announcements, rates/bonds did what they had to in order to keep in line with the 21-day moving average (the center of the popular Bollinger Band technical study--middle line below). Central bankers were generally bond-friendly (or at least not 'unfriendly'). Combined with Monday's trade war headlines, this helped bonds begin to creep back down toward the friendly side of the fence. But even as early as yesterday morning, it looked like the trade war motivation had given all it could give and that we might be headed back...(read more)

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

    Created: 6/20/2018 4:04:15 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved modestly higher today after holding in roughly the same territory for the past 3 days. This brings them back in line with last Thursday's levels. In general, trade tensions helped the bond market earlier this week (stronger bonds = lower rates), but the bonds that underlie mortgages didn't benefit nearly as much as US Treasuries. Additionally, mortgage lenders have had to play it safer than normal amid a rising rate environment and recently higher volatility. The net effect of these factors is that mortgage rates have often not been able to participate too much during the good days, but have still had to take their lumps on the bad days. The caveat to all of the above is that the day-to-day moves have been very small in the grand scheme of things. For instance, today's...(read more)

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

    Created: 6/20/2018 1:48:00 PM
  • Posted To: MND NewsWire

    Analysts were expecting existing home sales to rebound in May after they fell behind year-ago levels in April. However, the National Association of Realtors® (NAR) reported a second straight monthly loss , with the Northeast the only region where sales improved. Sales of existing single-family homes, townhomes, condos, and cooperative apartments were at a seasonally adjusted annual rate of 5.43 million in May, a 0.4 percent decrease from April and down 3.0 percent from May 2017. It was the third straight year-over-year decline. April sales were also downgraded from 5.46 million to 5.45 million. The May results came in below the lowest of analysts' expectations as reported to Econoday. Those predictions ranged from 5.44 million to 5.65 million with a consensus of 5.50 million. Single-family...(read more)

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

    Created: 6/20/2018 7:55:42 AM
  • Posted To: MBS Commentary

    I talk quite a bit about the " long-term trend " or the "longer-term trend" these days. It most frequently comes up in some iteration of the following: "until the long-term trend has been clearly defeated," etc. But what exactly are we talking about? The following chart has several iterations. TOP: This is the most relevant of the 3 for the lock/float outlook. It leaves some room for corrections that take rates back to the lower boundary, but there's no guarantee we'll hit the lower end before we return to the upper end. MIDDLE: This is what I would consider to be the general counterattack leading back from the all-time lows in 2012. Yes, yields did move a bit lower (to new all-time lows) in 2016, but I tend to view that as a temporary divergence due to...(read more)

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

    Created: 6/20/2018 7:06:14 AM
  • Posted To: Pipeline Press

    onight/tomorrow morning is the summer solstice. I am in Minneapolis at an ACUMA workshop and where the sun will set tonight at 9:03. (I suppose ACUMA could have held its event in Anchorage, where the sun sets at 11:42 tonight, which would be cool.) I mention credit unions because a) their market share is growing, and b) the talk is how President Trump is trying to reshape the National Credit Union Administration board by nominating former NCUA vice-chair Rodney Hood to fill an expired seat on the three member board. Fannie and Freddie Changes Those rascally, friendly competitors just don’t stop to take a breath and seem to be busy trademarking every phrase and new product. (Watch out for a little “TM” or an “R” with a circle around it in promotional stuff.) On...(read more)

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

    Created: 6/20/2018 5:59:56 AM
  • Posted To: MND NewsWire

    Mortgage interest rates waffled, moving in different directions depending on the product last week, but the volume of mortgage applications increased rather decisively . The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of that volume, surged by 5.1 percent during the week ended June 15. It was the largest increase in total mortgage volume since the week ended January 5, 2018. On an unadjusted basis the volume was up 3 percent. Applications for both refinancing and home purchases increased compared to the week ended June 8. The Refinance Index gained 6 percent and the refinancing share of applications grew from 35.6 percent to 36.8 percent. The seasonally adjusted Purchase Index increased by 4.0 percent from one week earlier and the unadjusted Purchase Index...(read more)

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

    Created: 6/20/2018 5:16:58 AM
  • Posted To: MBS Commentary

    June began with yields plateauing after rising from the Italy-inspired lows of late May. 10yr yields managed to avoid breaking above 3% until last week's much-anticipated Fed Day. Even then, the Fed and the ECB ultimately gave way to the slow, steady rally that's persisted into the current week. Until today, that rally was nice, but forgettable, as it merely got us back in line with the lowest levels of the narrow range seen so far this month. Today's rally is arguably forgettable as well. It hasn't marked a meaningful departure from the pace of the past few sessions. In fact, the domestic trading hours were just as boring as yesterday's. The only difference today is that we started with a bit of a lead thanks to overnight trade war headlines. As soon as Chinese equities...(read more)

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

    Created: 6/19/2018 1:15:58 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates didn't move much today, despite a somewhat decent improvement in bond markets. Overnight, trade war brinksmanship between the US and China had investors seeking the safe haven of bond markets. Excess demand for bonds pushes rates lower, all other things being equal. As is often the case with safe haven trades, US Treasuries saw more of the benefit than the bonds that underlie mortgage rates. The net effect is a move back in line with last Friday's levels for the average mortgage lender. Loan Originator Perspective Bond markets rallied as trade war fears grew today. Tariffs hurt economic growth, and boost bonds. I'm not sure rate sheets reflect the improvements yet, will float today's loans overnight and hope gains get passed along. - Ted Rood Talks of a Trade War continue to...(read more)

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

    Created: 6/19/2018 12:19:00 PM
  • Posted To: MND NewsWire

    The White House announced on Monday the nomination of Kathy Kraninger as head of the Consumer Financial Protection Bureau (CFPB) to replace acting director Mick Mulvaney. The appointment caught many in Washington by surprise as Kraninger is not widely known and has not previously been active in the consumer arena according to many reports. Kraninger has been an associate director at the Office of Management and Budget (OMB), which Mulvaney also serves as director, for about a year. At OMB she oversees $250 billion in funding for seven cabinet departments and 30 agencies, including the Department of Homeland Security. Her previous role was as a staff member of the Senate Appropriations Subcommittee on Homeland Security. She has also worked for the Department of Transportation. Looking beyond...(read more)

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

    Created: 6/19/2018 8:27:38 AM
  • Posted To: MND NewsWire

    Residential construction data was mixed for May as reported on Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development. Housing starts recovered strongly from their April loss while permits continued lower. Housing starts were at a seasonally adjusted annual rate of 1,350,000, a 5.0 percent improvement from April's revised, (from 1,287,000) 1,286,000 units. The May number was up 20.3 percent from the estimate reported for last May of 1,122,000 housing starts. Starts were right at the top of the estimates provided by analysts to Econoday . They were looking for results in the range of 1,270,000 to 1,350,000 with a consensus of 1,320,000. Construction was begun on a seasonally adjusted 936,000 single family houses, a 3.9 percent month-over-month gain and up 18.3...(read more)

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

    Created: 6/19/2018 6:59:03 AM
  • Posted To: Pipeline Press

    When I grow up I want to live in a ranch style… shipping container? If you have a builder complaining about lumber costs or labor to frame a house, there’s always metal. “From rooftop decks to custom wood floors, these repurposed shipping containers are anything but boring.” Air conditioning is a must, and the Hapag-Lloyd sign on the side might add character. In other housing news, we have this headline from Florida: “Freedom Mortgage CEO drops $20M on Ocean Ridge Estate.” Nice digs! Upcoming Training and Events Freddie Mac is offering up a, “Discover the Possibilities with Home Possible Mortgages” webinar on June 20th. (Home Possible and Home Possible Advantage are Freddie Mac’s low down payment offerings.) “Join us for this free...(read more)

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

    Created: 6/19/2018 5:59:41 AM
  • Posted To: MBS Commentary

    You're welcome! I knew if I lamented the slow and boring nature of the week ahead yesterday that I could trick the bond market into doing something exciting. Sure, it was a 50/50 chance that my little ploy could backfire, but at least there would be something exciting to talk about. And now here we are with 10yr yields staring the day down more than 4bps. Fake superstitions aside , bonds have quickly found some inspiration on what began as a dud of a week. As Asian markets returned from yesterday's holiday absence, the blossoming trade tensions between the US and China took a toll on equities markets and helped bond yields move lower. With the help of a bigger jump during the very first hours of overnight trading in Asia (during which, Treasuries are not trading on the cash market)...(read more)

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

    Created: 6/19/2018 5:57:01 AM