Mortgage News Daily

  • Posted To: MBS Commentary

    In the Day Ahead, we discussed bond traders' probable goals regarding keeping things as calm as possible. This depended on unexpected headlines and movements in external markets. Either of those were capable of throwing curveballs , and both threw a few today! Out of the gate, bonds were flat, but once equities trading picked up, Treasuries improved in line with a morning stock sell-off. At the time, it looked like stocks were set for a death-spiral well-into the lowest levels in more than a month. While most averages were indeed lower on the day, the losses were moderate. In fact, stocks were briefly positive due to mid-day Trump-related drama. This installment featured Bannon's departure from the White House team. I don't have any political views on this development, but markets...(read more)

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    Created: 8/18/2017 5:20:11 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates moved lower again. Drama surrounding the Trump administration was also present. But this time around, the political theater wasn't responsible for the move lower in rates. In fact, it resulted in multiple lenders adjusting rate sheets higher in the middle of the day. Fortunately, rates fell enough in the morning that the net result was still positive. The average lender is at new lows for 2017 (lowest since just after the November 2016 election, in fact). 3.875% is now the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios, although quite a few lenders remain at 4.00%. Next week brings the normally-hotly-anticipated Jackson Hole symposium, but with monetary policy for both the Fed and the European Central Bank essentially an open book of late, market...(read more)

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    Created: 8/18/2017 4:54:00 PM
  • Posted To: MND NewsWire

    Freddie Mac announced today that, going forward, not every application for a purchase mortgage will necessarily trigger an appraisal . A new automated alternative to traditional appraisals, which the company introduced for refinances in June, will soon be available for purchase mortgages. It may save borrowers in some instances as much as $500, and reduce their wait to close a loan by seven to ten days. Freddie Mac's automated collateral evaluation (ACE) uses a proprietary model to assesses the need for an appraisal by using data from multiple listing services, public records, and information on historical home values to determine collateral risks. Lenders must submit loan data through Freddie Mac's Loan Product Advisor to determine if a property is eligible for ACE. ACE will be available for...(read more)

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    Created: 8/18/2017 7:33:47 AM
  • Posted To: MND NewsWire

    As investors flooded into the housing market after it collapses, they brought cash with them. At one point, 35 percent of home sale transactions were closed without a mortgage, i.e. were all-cash sales. Home prices are up, the bargains are gone, but cash sales remain significantly elevated compared to historic levels. In the August edition of Freddie Mac's Outlook , the company's economists reference recent data from the National Association of Realtors® (NAR) indicating that 18 percent of homes sold in June were all-cash transactions. Historically, about 10 percent of home sales are for cash. The economists say that most people do not like to invest a lot of cash into real estate because it is illiquid and has high transaction costs . However, given the current low inventories, the housing...(read more)

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    Created: 8/18/2017 7:24:48 AM
  • Posted To: Pipeline Press

    Brad Pitt - a wannabe architect? In 2007, Pitt founded the Make It Right Foundation to build homes for families whose original residences had been washed away in Hurricane Katrina. Here's one - the "Tiny House" - very cool . Mr. Pitt's accountants know a thing or two about dealing with the IRS (yes, I know, a weak segue), and for anyone in lending working with 4506-Ts know that the IRS is conducting maintenance beginning last night until 6AM ET on 8/21. During this time, 4506-T services will be unavailable. You are still able to submit orders during the maintenance period and all requests received during that time will be submitted to the IRS once their system is back up. Lock Nesk News and Trends A while back I heard someone joke about, "The lock desk monster," and no, they weren't in Scotland...(read more)

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    Created: 8/18/2017 5:50:33 AM
  • Posted To: MBS Commentary

    A maritime analogy for bond trading in the Summertime... In the summer months especially, there's a boat-friendly baseline weather pattern offshore. Lest you think that's a generality that doesn't merit your full confidence, check out the following shots of wave height at the moment. Blue is calm, and pink/red/crimson indicates big waves. You will likely notice a distinct difference between Northern and Southern hemispheres. As you recall from your earth sciences class in grade school, it's Winter in the southern hemisphere right now. You don't really want to do much boating off the coast of Australia. If you do, you know that you'll need to expect severe sea conditions. It's much the opposite in the Northern hemisphere. Here, there's a certain baseline of calm...(read more)

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    Created: 8/18/2017 4:34:54 AM
  • Posted To: MBS Commentary

    What do you get when bond markets embark on a snowball rally due to headlines concerning Trump's Economic Advisor Gary Cohn? A delicious "Snow Cohn," of course (my team of writers assured me that was worth what I paid). In all seriousness, there were some serious tweets earlier today concerning Cohn's potential resignation and there was certainly a snowball rally that followed. Interestingly enough, even when the tweets were debunked (he's not really resigning) there wasn't a profound bounce back in the initial market movement. While some might suspect the terror attacks in Spain were the reason for that, we probably would have seen a bigger reaction in $/Yen and European equities futures were that the exclusive case. Spain may have contributed to the overall demand...(read more)

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    Created: 8/17/2017 3:01:23 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates fell yesterday in response to a tweet about Trump disbanding his councils of CEOs. Twitter was in play again today . This time around it was Gary Cohn, Trump's economic advisor. Rather, it was rumors of Cohn's departure that sent financial markets into a tail-spin. Terror attacks in Spain may have played a supporting role. The net effect was heavy losses for stocks and solid gains for bonds. When bonds improve, rates fall . Mortgage lenders continue to be slow to pass along the gains in bond markets in general, but they're certainly passing them along. Multiple lenders issued positive reprices in the afternoon as bond markets rallied. Conventional 30yr fixed rates are increasingly being quoted at 3.875% as opposed to 4.0% on top tier scenarios. On average, rates are the lowest...(read more)

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    Created: 8/17/2017 2:17:00 PM
  • Posted To: Community Commentary

    As a mortgage loan officer, I typically work with home buyers who are moving up, buying their first house, or buying a vacation or investment house. My refinances are often rate and term – (lowering the client’s payment) or cash-out for a specific purpose like paying down credit card debt. Working with separating and divorcing clients is a particular area of my expertise. One or both parties often need to buy a new home, sell their current home, or refinance their partner off the mortgage if retaining their home. Rules regarding divorce or separation status vary from state to state , including community property state specific laws. Working with a knowledgeable attorney and lender will help you and your client move forward in their lives. Because I specialize in assisting Virginia...(read more)

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    Created: 8/17/2017 1:25:52 PM
  • Posted To: MND NewsWire

    Although home affordability is high, relative to pre-crisis levels, the rate at which their prices are increasing is cause for concern. Andrew LePage, CoreLogic Professional in Research Analysis, says the role of rising interest rates should not be overlooked; they can affect affordability more than home price appreciation. Household incomes have not been keeping up with rising home prices, but the persistently low interest rates have mitigated some of the impact . But LePage asks, what will happen now that rates are trending higher again? One way to measure how inflation, interest rates, and home prices impact affordability is "the typical mortgage payment." This is an interest rate-adjusted monthly payment derived each month using the median national home sale price and the Freddie Mac average...(read more)

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    Created: 8/17/2017 12:33:27 PM
  • Posted To: MBS Commentary

    With this morning's econ data already out and having no effect on bond markets, the only other report for the week is tomorrow morning's Consumer Sentiment--admittedly not the biggest market mover in the world. The backdrop for any potential volatility is the recent, decidedly narrow trading range. It's allowed volatility to occur within its boundaries, but hasn't allowed a confirmed break all month (technically, we entered the range on 8/1). Yesterday's inspiration for yields to run the range from top to bottom was the unexpected news that Trump was disbanding his councils of CEOs (or the rumors that the disbanding was imminent as CEOs had been resigning following the Charlottesville press conference). Unlike the North Korean nuclear drama, this unexpected headline didn't...(read more)

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    Created: 8/17/2017 7:22:45 AM
  • Posted To: MND NewsWire

    There is still life left in refinancing. While at nowhere near the levels of a few years ago, Ellie Mae's Origination Insight Report for July reported that the percentage of loans that were for refinancing increased by three points to 35 percent . That gain followed two months of decline. The refi share was up 2 to 3 percentage points across all loan types. The increase in refinancing was due of course to the recent lowering of interest rates . On average, the 30-year note rate on closed loans dropped to 4.25 percent, down from 4.41 percent in April and the lowest level since January. The share of all originations remained unchanged for each loan type, with Conventional loans garnering 64 percent, FHA 22 percent, and VA 10 percent. The share of adjustable rate mortgages dropped to 5.7 percent...(read more)

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    Created: 8/17/2017 7:04:14 AM
  • Posted To: Pipeline Press

    What will buildable land in Las Vegas set you back? The math is pretty easy: Toll Brothers has acquired 10 acres of vacant land at a once-bankrupt Summerlin condo complex for $10.3 million. But that is just the start of expenses, right? In neighboring California, more stringent building-code requirements add roughly $47,000 to a typical 1,400-square-foot home, and building impact fees account for 20% of costs . And we want housing for first-time home buyers? In California, the percentage of home buyers who can afford to buy a median priced home stands at 29%. TRID & closing table requirements How much do closing table surprises hurt the lender? Back in the pre-TRID days, borrowers often walked into their closing with unclear expectations. While TRID has improved communications with borrowers...(read more)

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    Created: 8/17/2017 6:38:47 AM
  • Posted To: MBS Commentary

    Today looked like it would be all about waiting for the Fed Minutes to see if there were any surprises. That plan began in fairly good shape, with only a mild rally following weaker residential construction data. By mid-day, bonds were staging near their stronger levels from yesterday's domestic session. Then the weird stuff started happening. Big trades (purchases) slammed into the bond complex--far too big to be accounted for by anything random. At the same time, movement in stocks and $/Yen told us that something was going on, but it took a few minutes before any likely suspects were found at the scene. The first (and ultimately, the "only" ) suspect popped up several minutes after the initial move. It came in the form of a tweet from Trump, saying that he was disbanding his...(read more)

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    Created: 8/16/2017 2:28:56 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates dropped today after news broke (first rumors, then confirmation via Twitter) that President Trump was disbanding his councils of CEOs. The move apparently came in response to attrition among several CEOs following Trump's press conference on recent events in Charlottesville, VA. In not so many words, Trump disbanded the councils before any more CEOs had a chance to quit. Political turmoil-- especially that which appears "anti-business" in any way--always runs the risk of hurting stocks and helping bonds. That's exactly what happened today. "Helping bonds" in this context means higher demand for bonds among investors. Excess demand for bonds pushes rates lower. The market reaction to the Trump news overshadowed what was set to be the day's big-ticket event up to that point--the...(read more)

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    Created: 8/16/2017 2:05:00 PM
  • Posted To: MND NewsWire

    Headstrong is a rather interesting word, but the National Association of Realtors® (NAR) chose it to describe the continuing imbalance between supply and demand in the housing market. NAR blames this imbalance for slightly tempering home sales as well as pushing continued robust price growth in the second quarter of 2017. NAR says the national median existing single-family home price in the second quarter rose 6.2 percent from the same quarter in 2016, an increase from $240,700 to $255,600. This is a slight moderation from the 6.9 percent year-over-year price growth logged in the first quarter of this year, but the most recent median price still set a new peak , surpassing Q3 2016's median of $241,300. NAR says single-family home prices increased compared to the same quarter of 2016 in...(read more)

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    Created: 8/16/2017 7:57:05 AM
  • Posted To: MND NewsWire

    After posting unexpectedly high numbers in June, all three residential construction indicators lost ground in July , and one, housing starts, is now running below its year-ago rate. While the softening is primarily in the multi-family sector, starts have declined in four of the last five months and permits in three of the last four. The U.S. Census Bureau and the Department of Housing and Urban Development said privately owned housing starts were at a seasonally adjusted annual rate of 1,155,000 units, a 4.8 percent decline from June's estimate of 1,213,000, which was revised down from 1,215,000. July starts were down 5.6 percent from the 1,223,000-unit annual rate in July 2016. Starts failed to meet even the lowest predictions of analysts polled by Econoday . Their estimates ranged from 1...(read more)

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    Created: 8/16/2017 6:54:57 AM
  • Posted To: MBS Commentary

    Today's biggest calendar item is the release of the FOMC Minutes at 2pm. The Minutes provide synopsis of the meeting that took place in the 2 days leading up to the official Fed announcement in late July. That announcement was very little changed from the previous announcement, but the Fed did take the opportunity to telegraph September's widely anticipated launch of the balance sheet normalization program. The normalization program was laid out in detail at the Fed's June meeting ( here it is , if you're interested). In a nutshell, the Fed buys between $20-40 bln/month currently in MBS alone The wide range is a factor of the original MBS prices/coupons. The Fed was always buying MBS, even the higher rate stuff in 2013/2014. Clients with higher rates were more and more likely...(read more)

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    Created: 8/16/2017 6:32:20 AM
  • Posted To: Pipeline Press

    I’ve only been in this business since the mid-80s, and as a capital markets person always find it amusing when an owner says, “If it wasn’t for TBA pair off costs, we would REALLY be making money!” For the antithesis of making money, on this date 10 years ago news broke that First Magnus...well... didn't make money. (And just look at those Fed Fund rates!) Vendor updates Here's the latest from The Mortgage Collaborative, which holds its summer "eclipse" conference in Nashville next week. "The Mortgage Collaborative, the nation's only independent mortgage cooperative, announced a new partnership with national compliance solutions provider, Strategic Compliance Partners. The new relationship with Strategic Compliance Partners adds another best-in-class mortgage compliance...(read more)

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    Created: 8/16/2017 5:33:28 AM
  • Posted To: MND NewsWire

    A decline in applications for home purchases nearly overwhelmed the gain made by refinancing activity during the week ended August 11. The Mortgage Bankers Association reported that its Market Composite Index, a measure of application volume, managed to increase a meager 0.1 percent on a seasonally adjusted basis when compared to the previous week. The unadjusted index fell 1 percent. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier and the unadjusted Purchase Index was down 3 percent. The unadjusted index remained 10 percent higher than the same week in 2016. Refinancing rallied yet again, with the Refinance Index rising 2 percent from the week ended August 4. In addition, the refinancing share of applications increased to 47.8 percent from 46.7 percent a week...(read more)

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    Created: 8/16/2017 5:17:40 AM
  • Posted To: MBS Commentary

    Today was mostly about North Korean de-escalation, and somewhat about stronger economic data. If you haven't heard 43 times already, North Korea graciously decided to hold off on their little plan to nuke Guam (though the little plan of marching up and down the square remains intact for now). Considering that nuking Guam (or more likely, "attempting" to nuke Guam) would have led to Nuclear war or something equally unpleasant, bond markets had some gains to give back. Reason being: bonds benefited from "flight-to-safety" demand as investors shed risk amid last week's nuclear uncertainties. All of the above being the case, most of the day's bond losses were seen in the overnight session (the initial headlines about Guam came out last yesterday). The morning's...(read more)

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    Created: 8/15/2017 1:15:24 PM
  • Posted To: Mortgage Rate Watch

    Mortgage rates continued higher today as markets reacted to news that North Korea would tactically abstain from launching nuclear weapons at Guam because it was having such a good time watching the "foolish and stupid conduct of the Yankees." Perhaps Kim Jong Un is a Sox fan? Someone should tell him that series is over and that the Mets might not put up as much of a fight. Or perhaps "Yankees" referred to America in general. Either way, markets took solace in the absence of global nuclear war by buying stocks and selling bonds. Net selling pressure in bonds pushes rates higher . Strong economic data in the morning only added to bond market weakness. Fortunately, movement in rates continues to be muted by historical standards. Most consumers would still be seeing the same rates quoted today...(read more)

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    Created: 8/15/2017 12:21:00 PM
  • Posted To: MND NewsWire

    One of the many shifts endured by the housing industry during the Great Recession was the entry of institutional investors into the single-family housing market. Hedge funds and other Wall Street types bought up thousands of single family residences (SFRs), largely from lender inventories of foreclosed homes. There were worries in the moment about the competition this presented to potential owner-occupants, and concerns over how disastrous this might be down the road. The difficulties inherent in scattered site property management could threaten neighborhoods, and what might happen once the housing market recovered and investors took their profits and ran, dumping thousands of properties on the market. These fears, to all appearances, have been unrealized . The management issues were overcome...(read more)

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    Created: 8/15/2017 10:04:00 AM
  • Posted To: MND NewsWire

    Builder confidence made a strong comeback this month , surprising analysts and belying some of the gloom expressed by the National Association of Home Builders (NAHB) earlier this week about construction labor problems. NAHB said the NAHB/Wells Fargo Housing Market Index (HMI) rose 4 points from its July reading to 68. "Our members are encouraged by rising demand in the new-home market," said NAHB Chairman Granger MacDonald. "This is due to ongoing job and economic growth, attractive mortgage rates, and growing consumer confidence." The HMI dropped 2 points in July, to its lowest point since last November. At that time NAHB attributed the slippage to concerns over the costs of construction . This week the trade group said labor shortages faced by home builders were, in most occupations, the...(read more)

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    Created: 8/15/2017 7:31:42 AM
  • Posted To: Pipeline Press

    The science of persuasion? Any good salesperson, or LO, can talk someone into buying just about anything using scarcity, reciprocity, commitment, social proof, authority, and liking. Here's a good article to share with your loan officers. A good site to review if you want to go to a conference and your company's travel budget is frozen. Upcoming Events, Conferences, and Training On August 16th, learn how to navigate through Plaza Reverse Mortgages with Mark Reeve, Plaza's Reverse Mortgage National Director. This webinar will review Reverse Mortgage basics including Plaza's reverse loan programs, the origination process, compensation, recent industry changes, and more. Would you like to learn more about how to submit condominium loans and help ensure a smooth process with Wells Fargo Funding...(read more)

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    Created: 8/15/2017 6:17:17 AM