Mortgage News Daily

  • Posted To: Pipeline Press

    Under the heading, “What’ll they think of next?”, especially for aging Boomers, comes stairs that store energy and help the next person walk up them! State-Level Changes When lenders complain about federal regulation and oversight, at least, in theory, it originally came from one source and is uniform across the 50 states. But when a multi-state lender must contend with all 50 states doing different things, things become complicated, and expensive, in a hurry. Michigan has amended Act 79 of 1915, concerning the required statement of marital status in written instruments conveying or mortgaging real estate, effective immediately . The Act as amended requires that all written instruments conveying or mortgaging real estate, or any interest in real estate, executed and offered...(read more)

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    Created: 7/21/2017 6:34:54 AM
  • Posted To: MBS Commentary

    One of the hallmarks of classic (read: old school) technical analysis is the role of volume in confirming market movements. For instance, if 10yr yields break through a key technical level, the next question many traders will ask is whether or not it happened with strong volume. While this sounds pretty smart in principle, it's trickier to apply to living, breathing markets. There are so many variables in play that it makes more sense to temper our enthusiasm for high volume moves a bit. Some of the curveballs are as follows: A high volume move could be due to a snowball of trading positions being forced through "stops" (stop-loss levels--automatic triggers to buy or sell based on certain conditions). For instance, if there are 10 buyers and sellers in an entire market for fidget...(read more)

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    Created: 7/21/2017 6:29:15 AM
  • Posted To: MBS Commentary

    Talk about your anticlimactic conclusions! It's not that the European Central Bank (ECB) was likely to make any meaningful changes in its policy stance today, but it nonetheless served as an important opportunity to confirm or deny the notion that Draghi's late June comments were a step in the direction of a tapering announcement--perhaps later this year. Draghi essentially denied it--saying they hadn't even discussed the September meeting as a tapering announcement target, nor had they discussed it at all. That may or may not be factual. Certainly, we've seen newswires that suggest quite the opposite, such as this one from July 13th that did noticeable damage to bond markets: ECB COULD ANNOUNCE PLANS TO WIND DOWN QE AT ITS SEPT. 7 POLICY MEETING--ECB OFFICIALS Technically though...(read more)

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    Created: 7/20/2017 4:06:58 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates held relatively steady today, keeping them in line with the lowest levels in more than 3 weeks. There was relatively little market movement in response to the policy announcement from the European Central Bank (ECB). That's a good thing considering much of the recent gains in rates can be attributed to traders growing more optimistic about the ECB's stance. To put all this in plain English , the ECB buys bonds. This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit). There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds. While that day will likely come eventually, today's announcement assures markets that it hasn't been discussed yet. The relatively...(read more)

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    Created: 7/20/2017 2:59:00 PM
  • Posted To: MND NewsWire

    The single agency security toward which the GSEs, Fannie Mae and Freddie Mac and their regulator, the Federal Housing Finance Agency (FHFA), have been working for several years, is not yet operative, but it just got a round of applause. Linda Goodman, Codirector of the Urban Institute's (UI's) Housing Finance Policy Center, and associates Bing Bai and Jim Parrot, writing in UI's Housing Wire blog say the new security will save taxpayers millions of dollars while making the market more responsive to borrowers and lenders. The GSE's have each issued their own mortgage-backed security for more than four decades but the securities issued by Freddie Mac have historically traded at a lower price than those issued by Fannie Mae. A subsidy was often required to equalize pricing so originators would...(read more)

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    Created: 7/20/2017 12:39:09 PM
  • Posted To: Pipeline Press

    This morning we’ve had the usual Thursday initial jobless claims economic release. At the other end of the teeter totter, here’s an amazing stat to talk about at Happy Hour tonight. It is estimated that 50% of net business formation in the United States since the recession has happened in about half of 1% of U.S. counties. That’s 20 of the 3,100 U.S. counties . Vendor News No one has definitively proven that a lender's use of vendors has decreased the cost to produce a loan. Conversely no one has proven that they aren't affective in helping produce loans in compliant, efficient, cost-effective ways. It is good to see what they are up to and see what's new out there. Wells Fargo is already testing and preparing its own digital mortgage solution by 2018 . Small lenders are already...(read more)

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    Created: 7/20/2017 6:34:54 AM
  • Posted To: MND NewsWire

    Refinancing held its ground in June, with that share of the mortgage market remaining at 32 percent. While that is a significant decline from the 47 percent share the first month of the year, it is little changed from the June 2016 share of 34 percent. Logically, purchase loans remained at prior levels as well, a 68 percent share. The June Origination Insight Report from Ellie Mae notes a shift between refinance and purchase shares within loan types. the percentage of both VA and Conventional purchase loans increased 2 percentage points from the previous month, to 75 percent and 63 percent respectively. FHA purchase loans decreased slightly to 81 percent. The distribution of all loans across lenders was largely unchanged as well. Ten percent of originations were VA loans , the same percentage...(read more)

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    Created: 7/20/2017 6:28:35 AM
  • Posted To: MND NewsWire

    Black Knight Financial Services said on Thursday that continued low interest rates fostered another increase in prepayments . The national prepayment rate, considered a sign of refinance activity , rose 5.3 percent in June on top of a 23 percent jump in May. It now stands at 1.12 percent. Despite these gains, it still lags the rate last year by more than 22 percent. The company released the prepayment information as part of its "first look" at June loan performance data. More detailed analysis will be presented in its next issue of Mortgage Monitor which will be available on August 7. Black Knight said the national mortgage delinquency rate resisted typical seasonal pressures, held steady at 3.8 percent in June. Early delinquencies increased, pushing the non-current rate up by 3.0 percent,...(read more)

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    Created: 7/20/2017 6:15:37 AM
  • Posted To: MBS Commentary

    Mario Draghi is the President of the European Central Bank (ECB). That's the EU's version of the Fed. Like the Fed in the past, the ECB is still adding new bond purchases to its balance sheet (the Fed tapered those new purchases beginning in Dec 2013 and markets went through the "taper tantrum" in the 6 months leading up to that). The ECB is understandably not interested in causing a European taper tantrum, but they also would like to extricate themselves from the role of world's biggest bond buyer. On June 27th, Draghi made comments that made investors think the ECB was gearing up for taper talk. The scheduled buying program runs through December of this year (an extension of a program originally scheduled to end in March). Investors figured the ECB was at least considering...(read more)

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    Created: 7/20/2017 5:33:07 AM
  • Posted To: MBS Commentary

    Much has been made of tomorrow's European Central Bank (ECB) Announcement, mainly because of its proximity to ECB President Draghi's comments on June 27th. That's when Draghi said deflation was being replaced by reflation and that economic growth in the Eurozone has more upside risk than downside. Those are the words of a central banker who is sending up trial balloons for tapering. Bernanke sent up similar balloons in March 2013, but they were ignored due to an abrupt shift in economic data in April (and then suddenly recalled in alarming fashion when that data was heavily revised in May). Markets are much more alert about ECB tapering risks and they've reckoned it's not happening in any sort of sweeping fashion just yet. Draghi's late June comments threw traders for...(read more)

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    Created: 7/19/2017 2:56:21 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved lower today, despite slightly weaker underlying bond markets. This has been an ongoing phenomenon in recent days. Bonds improve, implying lower mortgage rates, but lenders wait to drop rates until bond market improvement is vetted. In the current case, yesterday's market gains remained relatively intact despite today's market losses, thus giving lenders the green light to pass the gains through to mortgage rate sheets. Although today's rates aren't appreciably lower than yesterday's, they're technically the best we've seen since June 28th. More lenders are quoting top tier conventional 30yr fixed rates of 4.0% instead of 4.125%, and some of the aggressive lenders are back down to 3.875%. If there's been an underlying reason for the hesitation on the part of lenders, the...(read more)

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    Created: 7/19/2017 1:56:00 PM
  • Posted To: Pipeline Press

    In a broad generalization, when people have money to invest they usually think about stocks, bonds, or real estate. (Yes, I know there are other assets, like precious metals, restaurants, your sister-in-law’s nail salon…) Looking at real estate, if a home builder is going to spend large sums on land, labor, and permits, they want to be able to charge a lot. Sure enough, even though there's been a slight push back to entry level, builders are still focusing on higher priced homes . "In 2009, 19 companies of the 200 companies on the BUILDER 100 reported that 50% or more of their closings came in the affordable sector. By last year, that number had fallen to just two." Lenders Reacting to Disasters On 7/14/2017, FEMA announced NR-51 , amending DR-4317 and providing individual assistance...(read more)

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    Created: 7/19/2017 6:50:00 AM
  • Posted To: MND NewsWire

    Housing permits and starts both reversed their respective two-month slides in June, and both did so convincingly , far outpacing analysts' expectations. Activity was especially strong in the Midwest. The U.S. Census Bureau and the Department of Housing and Urban Development said building permits were issued at a seasonally adjusted annual rate of 1,254,000 units. This is a 7.4 percent jump from the May rate of 1,168,000. June permits were issued at a 5.1 percent higher pace than a year earlier. The permitting number left analysts in the dust. Those polled by Econoday had expected the number to come in between 1.170 million and 1.225 million, with a consensus of 1.206 million. Single family permits were issued at a rate of 811,000, a 4.1 percent month-over-month gain from the May estimate of...(read more)

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    Created: 7/19/2017 6:48:26 AM
  • Posted To: MBS Commentary

    This commentary will begin it's life as the "day ahead" entry for July 19th, 2017, but it may as well be a "knowledge base" entry for the validity of technical analysis. There are already several knowledge base articles designed to help people understand technical analysis on MBS Live. These include: Basic Concepts of Technical Analysis (And Some Jargon Definitions) Technical Analysis 101, Trends and Trend-Lines Max Support/Resistance Pivot Points (inflection points, floors, ceilings, etc.) Today's addition has to do with how much faith we should put in any given technical study. Are some studies better than others? When multiple studies are saying the same thing, should we put more stock in the conclusion? If the technicals can be reconciled with fundamental developments...(read more)

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    Created: 7/19/2017 6:41:04 AM
  • Posted To: MND NewsWire

    Mortgage application volume bounced back during the week ended July 14, following a sharp downturn a week earlier. That week had been shortened by the Independence Day holiday. The Mortgage Bankers Association said its Market Composite Index, a measure of that volume, rose 6.3 percent on a seasonally adjusted basis compared to the prior week, and was up 33 percent on an unadjusted basis. The previous week's numbers were adjusted to account for the holiday. The Refinance Index increased 13 percent from the previous week, the same percentage by which it declined the week before. The refinance share of activity rose to 44.7 percent from 42.1 percent. The seasonally adjusted Purchase Index gained 1 percent week-over-week and was up 27 percent on an unadjusted basis. The unadjusted version was 7...(read more)

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    Created: 7/19/2017 5:24:01 AM
  • Posted To: MBS Commentary

    If there is one thematic event at the heart of the past 4 weeks, it was a series of comments from European Central Bank (ECB) President Mario Draghi back on June 27th, essentially foreshadowing a winding-down of asset purchases. In other words, markets quickly began entertaining the idea of a European taper tantrum. The taper tantrum brought important lessons though--especially for central bankers who might be a bit too eager or forceful when the time came to make a shift. There's no material reason for the ECB to begin tapering immediately or to maintain a fast pace of reductions once it commits. The ECB can learn from the Fed's mistakes and take a much more measured approach. Intentional or not, Draghi's June 27th comments were a trial balloon for the market's mood with respect...(read more)

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    Created: 7/18/2017 1:45:39 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates fell today, but continue lagging behind the movements seen in underlying bond markets. Part of that has to do with the timing of bond market swings over the past few days, but lenders also simply want to see markets pick a theme and stick with it. Simply put: trading levels in bonds ultimately dictate rates, and today's trading levels suggest the lowest rates of the month. Given that today's rates are still generally in line with last Friday's, it would be fair to conclude that we'll see more improvement on lender rate sheets, even if bond markets merely hold flat tomorrow. Although we can't ever know what bond markets will do tomorrow, the fact that mortgage rates are heading into the day with a small advantage is useful knowledge. It means there's comparatively less risk involved...(read more)

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    Created: 7/18/2017 12:45:00 PM
  • Posted To: MND NewsWire

    Our neighbors to the north seem to think the grass is pretty green on this side of the fence. The National Association of Realtors® (NAR) says that foreign investment in the U.S. residential market skyrocketed to a new high during the 12 months that ended in March. Those sales were fueled by a substantial increase from Canadian buyers. NAR released results from its 2017 survey of international residential buyers on Tuesday. It shows buyers from each of the top five home countries increased their activity from 2016, and that nearly half of all foreign sales were in Florida, California and Texas. Between April 2016 and March 2017, foreign buyers and recent immigrants purchased $153.0 billion of residential property. This is 49 percent more than was indicated in the 2016 survey ($102.6 billion...(read more)

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    Created: 7/18/2017 8:43:35 AM
  • Posted To: MND NewsWire

    Home builder confidence continues backing down from its post-crisis peak earlier this year, although the National Association of Realtors (NAHB) calls results of its July survey "solid." The NAHB/Wells Fargo Housing Market Index (HMI) dropped 2 points to 64, its lowest reading since last November . The June composite index was also revised down, from an original reading of 67. NAHB attributes the slippage to concerns over the costs of construction. "Our members are telling us they are growing increasingly concerned over rising material prices, particularly lumber," said NAHB Chairman Granger MacDonald. "This is hurting housing affordability even as consumer interest in the new-home market remains strong." "The HMI measure of current sales conditions has been at 70 or higher for eight straight...(read more)

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    Created: 7/18/2017 7:38:09 AM
  • Posted To: Pipeline Press

    How much would you pay to keep your job, or find a new one? Political analysts forecast that two wealthy contenders for the 2018 Illinois governor spot (yes, that Illinois, with its financial difficulties) will spend more than $300 million trying to be elected. Fiscal intelligence? What's the environment like out there? Jeff Babcock , who heads up STRATMOR's M&A effort, writes, "In conversations with various lenders, I'm detecting a growing degree of pessimism about mortgage origination performance for the full year 2017. It seems that even the best-managed lenders are maintaining volumes at 2016 levels, but with lower margins. The average performers' volume is down 10% to maybe even 20%. While 2nd Quarter production accelerated after a slow 1st Quarter, several executives expressed concern...(read more)

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    Created: 7/18/2017 7:28:00 AM
  • Posted To: MBS Commentary

    It remains the case that Thursday is the focal point of the week, with European Central Bank (ECB) President Mario Draghi set to tell reporters how far away we are from a tapering announcement. Tapering is understandably a highly-charged topic, given how it played out in the US in 2013. Draghi is aware of the damage to financial markets and financial markets are aware that Draghi's aware. As such, they aren't expecting him to carelessly obliterate global bond markets. In fact, they're not expecting him to make much of a firm indication about what's going to happen in the future just yet--at least not in terms of actual dates or dollar (Euro amounts). In other words, he's increasingly seen as threading the needle that keeps tapering on the table, but that causes minimal panic...(read more)

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    Created: 7/18/2017 6:12:22 AM
  • Posted To: Mortgage Rate Watch

    Mortgage rates are largely dictated by movements in bond markets--specifically mortgage-backed securities (MBS). When bonds improve, prices rise and investors are willing to pay more to buy loans. This results in rates moving lower. In other words, bond market improvement = lower rates. With all of that in mind, today is a bit of a paradox as the average lender is quoting slightly higher rates today, despite general improvements in bond markets. Nothing too terribly mysterious is at work here though. The inconsistency has more to do with the timing of Friday's market movements and the generally narrow range over the past four days. Specifically, bonds weakened progressively into Friday afternoon and most lenders never fully adjusted rate sheets to account for that weakness. This left the average...(read more)

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    Created: 7/17/2017 1:59:00 PM
  • Posted To: MBS Commentary

    Today was an exceptionally light day in terms of news, volume, participation, and everything else we normally care about when it comes to market movement. For all intents and purposes, it was another "unofficial 3rd day of the weekend." This happens from time to time during summer months--typically on Mondays and less frequently on Fridays. It wasn't necessarily destined to happen today, but we knew in advance that the week's biggest-ticket events wouldn't hit until Thursday. With that in mind, we might even wonder how big Thursday's European Central Bank announcement can really be, given that insiders peg the September meeting for a more formal comment on tapering. While that's a possibility, there's always a risk that investors are simply hungry for clues...(read more)

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    Created: 7/17/2017 1:57:40 PM
  • Posted To: MND NewsWire

    Applications for mortgages to purchase newly constructed homes posted what was termed a seasonal decline in June. The Mortgage Bankers Association said its Builder Application Survey (BAS), which is conducted among mortgage subsidiaries of home building companies, decreased in June, but remains 10 percent higher than a year earlier. MBA uses application and market coverage data to project sales of newly constructed homes. It estimates that, on a non-adjusted basis, there were 55,000 new home sales in June 2017, a decrease of 3.5 percent from 57,000 new home sales in May. Their seasonally adjusted annual estimate of 628,000 units for June is an increase of 3.8 percent from the May pace of 605,000 units and is up 18 percent year-over-year. "We are at the part of the season where housing market...(read more)

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    Created: 7/17/2017 10:02:50 AM
  • Posted To: MND NewsWire

    Fannie Mae said it is sticking with its forecast for 2.0 percent economic growth in 2017, a projection it first made in February. The estimate of 2.1 percent growth in the first half of the year is expected by the company's economists to slow to 1.9 percent in the second half. Further, they say while housing won't drag on the economy this year, it won't make a huge contribution either, as inventories remain a problem. The global outlook has improved and this helped to move Treasury yields higher; the 10-year rose about 25 basis points during the first few weeks of July. Improving growth abroad along with the 4 percent decline in the dollar so far this year, should help improve U.S. manufacturing and exports. Fannie Mae's economic staff says the June Federal Reserve Open Market Committee (FOMC...(read more)

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    Created: 7/17/2017 10:01:21 AM