Mortgage News Daily

  • Posted To: MBS Commentary

    Bond traders are increasingly saying "enough already! " when it comes to reacting to every little push and pull in the tug-o-war over the tax bill. After headlines suggested Rubio may be pulling his "yes" vote yesterday, today's news was different. Concessions were made and the GOP once again had enough votes to move forward. Stocks and bonds moved lower together with yesterday's Rubio headlines and higher with today's. Granted, this was a much bigger deal for stocks, but bonds were taking part nonetheless. That is, until this afternoon when bonds decided enough was enough and proceeded to rally back toward 'unchanged.' Was it really as simple as bond traders getting fed up with all the political horse-trading? No, not even remotely. Bond traders have...(read more)

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    Created: 12/15/2017 4:32:24 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved slightly lower today, despite movement in bond markets that would have suggested otherwise. The paradoxical strength is likely due to the fact that bonds improved faster yesterday without mortgage lenders adjusting rate sheets accordingly. In other words, we began the day with an advantage thanks to lenders being overly cautious yesterday. From here we could even see a few lenders adjust rate sheets for the better as bonds have managed to find their footing at the end of the day. To put this talk of "improved rates" in context, many prospective borrowers would not see any difference between today's loan quotes and yesterday's. Some lenders didn't make any changes. Others merely offered modest reductions in upfront costs. It's only when we look at the average lender and...(read more)

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    Created: 12/15/2017 12:34:00 PM
  • Posted To: MND NewsWire

    There has been a flurry of news about the two GSEs, Fannie Mae and Freddie Mac, in the last few weeks. The House Financial Services Committee recently advanced H.R. 4560, the GSE Jumpstart Reauthorization Act of 2017 to the full house for consideration. The proposed bill extends the GSE Jumpstart Act through January 1, 2019, and was approved 33-27. The Jumpstart Act prohibits the sale of the GSE preferred shares owned by the Treasury Department without congressional approval . The bill also permits the GSEs to suspend their payments into the Housing Trust Fund for any period when it is unable to make its full dividend payment to Treasury. We take that to mean the bill will not be a precursor to allowing the GSEs to retain any part of their net profits which are currently swept in their entirety...(read more)

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    Created: 12/15/2017 8:22:32 AM
  • Posted To: Pipeline Press

    Originators, who work with plenty of renters who want to be owners, should know that the Harvard Joint Center tells us that, “We’re finally seeing the record growth in renters slow down, but while the market has responded to rental housing needs for higher-income households, there are alarming trends that suggest a growing inability to supply housing that is affordable for middle- and working-class renters, let alone those with very low incomes.” Here’s the American Rental Housing report. Company News Will Wells Fargo ever catch a break? Now it is being sued by the Navajo Nation over its "predatory sales practices." Randolph Bancorp, based in Stoughton, Massachusetts, is "aligning its mortgage banking headcount with current origination volumes." And thus layoffs. Isn...(read more)

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    Created: 12/15/2017 6:20:34 AM
  • Posted To: MBS Commentary

    From time to time, a discussion will start up among MBS Live community members regarding certain habits for certain months of the year. Some popular observations have been "bonds always sell-off in October" and "there's always volatility in March." Of course nothing in financial markets will ever "always" do the same thing (because anything that can be known with certainty is already priced in to current trading levels), but some general trends do seem to emerge more often than others. Whether or not this is mere coincidence is hard to say. We can almost always identify underlying reasons for the movement seen. Still, for the past several years, and indeed in more than half the cases since the Financial Crisis, bonds have done something substantially similar...(read more)

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    Created: 12/15/2017 6:15:40 AM
  • Posted To: MBS Commentary

    Bonds began the day in weaker territory partly due to a correction from yesterday's strong run in the afternoon, and partly due to stronger economic data in Europe. Domestic economic data was stronger too, with Retail Sales coming in at 0.8 versus a median forecast of 0.3. The previous reading was also revised up to 0.5 from 0.2. In the past, bonds might have cared more about that sort of data, but at present, there are bigger fish to fry. After yesterday's scheduled detour for inflation and the Fed (2 things that were expected to move markets despite NOT being "the tax bill"), it was back to focusing on the tax bill today. Senators Lee and Rubio threatened to vote "no" on the tax bill unless certain changes were made regarding child tax credit refunds. The release...(read more)

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    Created: 12/14/2017 1:55:47 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates held on to yesterday's gains in most cases. Some lenders were even in slightly better shape today, but not enough to have an effect on anything beyond the upfront costs associated with any given rate quote. Rates themselves would be right in line with yesterday's. That's not a bad thing considering yesterday afternoon brought effective rates near their lowest levels of the month. In this case, lower "effective rates" refer to lower upfront closing costs (or higher lender credits) for the prevailing top tier conventional 30yr fixed rates of 4.0%. Bond markets (which underlie interest rate movement) continued to pay more attention to policy developments than the economic data that traditionally has an impact. In today's case, it was news that a few Republican senators may not vote...(read more)

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    Created: 12/14/2017 12:51:00 PM
  • Posted To: MND NewsWire

    The use of Automated Valuation Models (AVM) is expected to expand following the announced plans of the Fannie Mae and Freddie Mac to waive the requirement for a professional appraisal on qualified purchase loans where the loan-to-value (LTV) ratio is at or below 80 percent. Fannie Mae had previously allowed this waiver only for refinancing, while Freddie will now allow automated evaluation tools for both purchase and refinancing loans when working with its Loan Advisor Suite. CoreLogic's Principal Economists Yanling Mayer, writing in the company's Insights Blog, says these changes come as the industry is hearing of shortages of certified and licensed appraisers, especially in rural areas. But there is still controversy. The Appraisal Institute has raised safety and soundness concerns over eliminating...(read more)

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    Created: 12/14/2017 8:17:53 AM
  • Posted To: MND NewsWire

    Homebuyers ponied up the highest downpayments on record to purchase homes in the third quarter of 2017. ATTOM Data Solutions' (formerly RealtyTrac) Residential Property Loan Origination Report says that the median down payment for a single-family home or condo purchased with financing during the quarter rose to $20,000 from $18,162 in the second quarter of this year. In the third quarter of last year the median was $14,400. The most recent number is the highest in ATTOMs records which date back to 2000. The $20,000 downpayment represents 7.6 percent of the median sales price during the quarter of $263,000. The percentage amount was also a recent high, up from 7.1 percent the previous quarter and 6.1 percent in the third quarter of 2016. It was the highest downpayment percentage since the third...(read more)

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    Created: 12/14/2017 6:23:02 AM
  • Posted To: Pipeline Press

    There’s a lot of airport travel coming up. It is best to stay cool, calm, and collected . Unfortunately, something else that is cool, and calm, is the entry level market for homes. Thousands of housing stats are spit out every year, and here's another one: Zillow finds about 270,000 fewer homes are sold each year compared to 2006, owing to the rentals. Put another way, the number of single-family homes that are rented out grew by 5 million between 2006 and early 2017. (For perspective, Michigan has 4.6 million units total.) Jumbo, Non-conforming, and High Balance Updates Plaza has a Solutions Program that offers a solution for your borrowers with DTI > 43% , self-employed borrowers with difficult income to document, or for transactions that do not fit standard Agency or Jumbo guidelines...(read more)

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    Created: 12/14/2017 6:15:31 AM
  • Posted To: MBS Commentary

    Volume swelled during the first 3 days of the week, culminating in yesterday's CPI/Fed combo and a fairly large move lower in rates. That's what we can observe about the short -term. If we're looking at longer -term trends, however, yesterday's big directional move was all about keeping things sideways. The yields seen just before the CPI data were right in line with the highest since late October. The upper boundary of the consolidation trend was clearly being pushed and the rally that followed the data and the Fed clearly pushed back. As the chart suggests, this makes the sideways momentum even stronger . At this point it's bordering on uncanny. If something other than "time" or the tax bill will challenge this sideways range, it has yet to present itself. Today...(read more)

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    Created: 12/14/2017 5:29:51 AM
  • Posted To: MBS Commentary

    Heading into the day, we knew we were looking at 2 key market movers in the form of the CPI data and the afternoon's Fed festivities (which include an announcement, economic projections, and a Yellen press conference). The morning's inflation data got the party started with Core annual CPI coming in at 1.7 again. This was notable it had just ticked up to 1.8 for the first time in 6 months when it was last reported a month ago. The move up to 1.8 looked like the start of a bounce back toward 2%. Today's regression reminds markets of inflation's intractability. Bonds looked ready for the inflation data to tell a different story as rates were pushing against their recent ceiling. The weaker data led to an immediate surge back into the safety of the prevailing range. From there...(read more)

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    Created: 12/13/2017 2:59:57 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates fell fairly quickly this afternoon following the Federal Reserves updated economic projections. While it is indeed true that the Fed "raised rates" this afternoon, there are two reasons that doesn't matter. First of all, the rate the Fed adjusts (aptly named, the Fed Funds Rate), governs only the shortest-time frames (overnight loans among big banks). Although its effects radiate to longer-term debt like mortgages, the two are far from joined at the hip. Short term rates often move one direction while long term rates move another . More importantly, EVERYONE responsible for trading the bonds that govern interest rates (and I do mean every last person without a single exception) was well aware that the Fed would be hiking rates today. No Fed rate hike has been better telegraphed...(read more)

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    Created: 12/13/2017 1:57:00 PM
  • Posted To: MBS Commentary

    Information received since the Federal Open Market Committee met in SeptemberNovember indicates that the labor market has continued to strengthen and that economic activity has been rising at a solid rate despiterate. Averaging through hurricane-related disruptions. Although the hurricanes caused a drop in payroll employment in September,fluctuations, job gains have been solid, and the unemployment rate declined further. Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters. Gasoline prices rose in the aftermath of the hurricanes, boostingOn a 12-month basis, both overall inflation in September; however,and inflation for items other than food and energy remained soft. On a 12-month basis, both inflation measures have...(read more)

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    Created: 12/13/2017 11:02:24 AM
  • Posted To: MND NewsWire

    Realtors are expressing concern over three measures that exist in either the House or the Senate versions of the Republican tax cut bill and have sent a letter to Orrin Hatch (R-UT) and Kevin Brady (R-TX), chairs of the Senate Banking and House Ways and Means Committees respectively, about these issues. The letter was sent as a conference committee is about to begin discussions of changes to the bills that will allow passage of a single version by both side of the Congress. Signed by, current National Association of Realtors (NAR) President Elizabeth Mendenhall, the letter stresses the important of homeownership to the U.S. economy and says the Congress needs to keep in mind where their decisions "can create a tremendously better outcome, not only for current and prospective homeowners, but...(read more)

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    Created: 12/13/2017 10:04:02 AM
  • Posted To: MND NewsWire

    Both Freddie Mac and Fannie Mae announced this week that evictions from foreclosed single-family and two-to-four-unit properties owned by the GSEs will be suspended during the holiday season. The moratorium will begin on December 18 and extend through January 2 of next year. The two companies said that legal and administrative proceedings for evictions can continue during the period as well as other foreclosure-related activities. Families, however, must be allowed to continue living in the homes. "We're taking steps to support families and to extend the timeline of help for struggling borrowers during the holidays," said Jacob Williamson, Vice President of Single-Family Distressed Assets at Fannie Mae. "We also encourage homeowners who may be struggling with their mortgage to reach out to...(read more)

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    Created: 12/13/2017 6:49:33 AM
  • Posted To: Pipeline Press

    Word on the street has House and Senate negotiators agreeing to scale back the mortgage interest deduction in the latest version of the GOP tax bill. The move means homeowners will now be able to deduct interest on the first $750,000 of a new mortgage, down from the current limit of $1 million. Legislation has been introduced in Congress recommending that the CFPB employee pay structure be aligned with the rest of the government. In the meantime, in other government related news besides Alabama’s vote, Movement Mortgage must pony up $1.1 million for California mortgage servicing violations. “Overcharged borrowers and serviced loans without a state license” – not a long-term recipe for success. Fire and Disaster Updates One should always start with the FEMA website for...(read more)

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    Created: 12/13/2017 6:16:22 AM
  • Posted To: MND NewsWire

    Applications for mortgages, both for home purchases and refinancing, declined during the week ended December 8. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of loan application volume, was down 2.3 percent on a seasonally adjusted basis compared to the volume a week earlier. On an unadjusted basis, the Index decreased 4 percent. Applications for purchases decreased 1 percent on a seasonally adjusted basis from the week ended December 1, and the unadjusted version of the Purchase Index was down 6 percent. The unadjusted index remained 10 percent higher than during the same week in 2016. The Refinance Index was 3 percent lower than the prior week, but the share of applications that were for refinancing increased to 52.4 percent from 51.6 percent. It was the...(read more)

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    Created: 12/13/2017 5:30:00 AM
  • Posted To: MBS Commentary

    Today brings 2 key developments in the form of the 8:30am CPI data and the afternoon's Fed announcement. CPI--the Consumer Price Index--was one of the top inflation metrics in terms of market movement. Like other inflation metrics, it faded into obscurity for post of the decade following the financial crisis. Markets simply didn't care about inflation data because the general notion of inflation was so far off the radar. The Nov 2016 presidential election seemed to mark a sharp turning point for inflation hawks. With Trump seen as highly likely to increase deficit spending and perhaps even aggregate demand (via promises of stimulus and tax cuts), there was a legitimate reason to fear an uptick in inflation. But even before that, the Fed had begun to warn that inflation was inexplicably...(read more)

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    Created: 12/13/2017 5:26:52 AM
  • Posted To: MBS Commentary

    It was a pretty straightforward day for bond markets, which CONTINUE to operate in an exceptionally narrow, sideways range. That's been the case for close to 3 months now. As such, with yields approaching the ceiling today, a breakout would have been big news, and we haven't quite gotten to the headlines and events that constitute "big news." All that to say that bonds didn't do anything too surprising by maintaining the range today. Still, to see it happen in real time, it looked like our salvation depended upon the 30yr bond auction. Heading into the auction 10yr yields were pushing the key technical ceilings near 2.42%. After stronger auction results were released, bonds immediately found their footing, and managed to avoid returning to the higher levels. On the other...(read more)

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    Created: 12/12/2017 1:59:32 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved modestly higher for the 4th straight business day today. Last Wednesday saw the best levels in a month with some lenders in the best shape since early September. The recent move higher brings rates back into the higher part of the prevailing range. If that all sounds somewhat dramatic, it's not . The "prevailing range" is so narrow that it barely bears mentioning. In fact, quite a few loan scenarios would be quoted the same "note rate" on any day in the past several months. Why, then, are we talking about rates "moving?" Technically, it's the "effective rate" that's moving because lenders use upfront costs to make finer adjustments to the cost of financing. In other words, if two people are quoted 4.0%, and everything about the quotes is the same except for a $200 difference...(read more)

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    Created: 12/12/2017 1:30:00 PM
  • Posted To: MND NewsWire

    The Mortgage Bankers Association (MBA) projects a decrease in new home sales in November compared to the previous month, but still sees those sales running well ahead of last year . MBA's Builder Applications Survey (BAS), conducted among mortgage subsidiaries of home construction companies, indicates that sales during the month were down 6 percent from October, but were a healthy 12.2 percent higher than in November 2016. MBA estimates this puts the number of sales during the month at a seasonally adjusted annual rate of 663,000 units compared to 659,000 units in October. On an unadjusted basis, there was an apparent decline month-over-month of 11.3 percent, from 53,000 to 47,000 new homes. The sales estimate is derived using mortgage application information from the BAS, as well as assumptions...(read more)

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    Created: 12/12/2017 7:59:03 AM
  • Posted To: MND NewsWire

    Loans performed well in September , continuing to erase most of the last vestiges of the market's Great Recession distress. The CoreLogic Performance Insights Report for the month says the national delinquency rate is now 5.0 percent. This ties September with August as the lowest rate since 2007. With the rate so low, measures of improvement are becoming slim. The September rate represents only an 0.2 percent year-over-year decline. Early-stage delinquencies, loans that are 30 to 59 days past due, rose 0.3 percent from a year earlier to 2.4 percent. CoreLogic's chief economist Frank Nothaft said this increase, the largest since June 2009, was not an indication of any deterioration in credit but reflected the impact of the late summer hurricanes on Texas, Florida, and Puerto Rico. "September...(read more)

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    Created: 12/12/2017 6:58:20 AM
  • Posted To: Pipeline Press

    Today I find myself in Florida spending time with American Bancshares. Did you know the area code for Cape Canaveral is 321…as in a countdown? 2017 is counting down. No one has a crystal ball, but the MBA thinks that residential volumes will be down 5% in 2018. Others think that is optimistic. Think you have a lot of planning to do for 2018, and the future? Same thing with gasoline companies: In a world of driverless cars, how are they going to attract the car to their gas station, while the owner will want the least expensive petrol? Upcoming Events For Fannie the new Demographic Information Addendum to the 1003 loan application will be required on all loan applications effective January 1, 2018. This change affects brokers, non-delegated correspondents and correspondent lenders. The...(read more)

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    Created: 12/12/2017 6:16:58 AM
  • Posted To: MBS Commentary

    I wish I could tell you that today was destined to be an exciting opportunity for bonds to embark on some sort of epic journey (or at least to definitively break outside the range that's been containing all movement for months). But alas, the "stuff" that MIGHT be relevant enough to elicit a breakout is at least another day away. That's assuming that the Fed Announcement and CPI data are "relevant enough" tomorrow. In the meantime, we have only Producer Prices on the econ data front today--a far less consequential report than tomorrow's Consumer Price Index. Of potentially more importance to near term trading is the conclusion of this week's accelerated Treasury auction cycle with 30yr bonds at 1pm. If yesterday's 10yr auction was any indication as to...(read more)

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    Created: 12/12/2017 5:37:19 AM