Mortgage Daily News

MBS RECAP: Mismatch Between Headlines and Bonds

Posted To: MBS Commentary

Another day, another chance for market watchers and pundits of all types to make mountains out of Turkish molehills. Yes, the financial crisis in Turkey is important and it's still a thing , but no... it's not the most important market mover for bonds or stocks at the moment. There's only a very small possibility that it's even the biggest risk to the global financial market. Stocks and bonds agreed today, as neither covered any special new ground despite another big drop in the value of Turkish currency. There were also some unsubstantiated headlines that caused a bit of intraday volatility--but that was mostly limited to Turkish markets. 10yr Treasuries, for instance, were unchanged to slightly weaker . Same story for MBS. Had domestic markets been taking any compelling cues...(read more)

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Mortgage Rates Hold Steady at 3-Week Lows

Posted To: Mortgage Rate Watch

Mortgage rates stayed steady at the lowest levels in more than 3 weeks as financial markets are still accounting for additional risks relating to Turkey. Simply put, Turkey is in the midst of a debt/currency/banking crisis and investors are worried about some sort of domino effect among banks that are heavily invested in Turkish banks. All this is worth a bit of "safe-haven" demand for US Treasuries, which offer essentially risk-free returns and a liquid place to park money temporarily. When investors buy more bonds--all other things being equal--it causes bond prices to rise . When bond prices rise, investors are technically willing to accept lower interest payments, and it's that part of the equation that speaks to lower interest rates on US Treasuries and mortgage rates. Bottom line: drama...(read more)

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MBS Week Ahead: Drama's Diminishing Returns

Posted To: MBS Commentary

Did anyone else have to sit through the drug addiction video (or was it a book?) in grade school (or was it middle school?) where the main character kept returning to this amazing fantasy of driving an exotic sports car. Each time, he had to drive farther and faster to get the same enjoyment. You get the idea. Same story for bond markets when it comes to overseas economic/political/debt drama. We need more and more in order to fuel an ongoing rally. As of this morning, we just took a hit of the same drug that made us high on Friday, and... ...nothing happened. Perhaps, if the Turkish drama spirals out of control in a bigger way, bonds will be more willing to entertain a break below that white dotted line. Until then, we're left to wonder if this little diversion has run its course. There...(read more)

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Subservicing, Non-QM Products; Agencies Active in Capital Markets

Posted To: Pipeline Press

Don’t think that correct mortgage documentation is important? Think again, or ask Citigroup. The Federal Reserve said Friday it had fined Citigroup $8.6 million over poor quality mortgage documentation practices at its CitiFinancial subsidiary in 2015. The Fed Citi mishandled customer files as it was preparing to wind down its mortgage servicing business, doing so in 2017. But there is good news! The Fed said that the problem was corrected, and the Fed is terminating a separate 2011 enforcement action against Citigroup on a separate residential mortgage loan servicing matter, citing sustainable improvements by the bank. Dot those i’s and cross those t’s! Capital Markets The various high-ranking officials within the Federal Reserve know just as much about the direction of the...(read more)

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MBS RECAP: The T-Word

Posted To: MBS Commentary

Tired of hearing about Turkey yet? This is what happens when fairly quiet markets are interrupted by a thunderous roar from an unexpected place. Newscasters, analysts, and armchair economists you'll talk to over the weekend are all happy to finally have SOMETHING to discuss other than Elon Musk, Apple being a trillion dollar company, or whether or not Keke loves them. Long story short, there's nothing too meaningful going on in the world of interest rates this week, and the Turkey thing would be worth discussing even during busier times of year. As such, it's going to feel like the only thing anyone is talking about for a while yet. Unfortunately, it's pretty simple: it takes a LOT of drama out of Turkey to generate a merely moderate response in US bond markets. Moreover, when...(read more)

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Mortgage Rates Noticeably Lower on Global Market Drama

Posted To: Mortgage Rate Watch

Mortgage rates , and indeed most interest rates, are tied to movement in the bond market. In turn, bonds tend to benefit when big, scary stuff is shaking global economic confidence. In today's case, the debt crisis in Turkey did just that. Investors sought safe haven in bonds, and rates moved to the lowest levels since July 20th. Lest you think that Turkey is a constant arrow in the quiver of potential market movers for rates, understand that things have had to get pretty bad for US markets to unequivocally respond. This has been a festering for several days (even months, depending upon how nervous or clairvoyant you might be by nature). Today was really the first day that where there's no doubt that Turkey is in the drivers' seat for global financial markets. See how weird that sounded? You...(read more)

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Aging Housing Stock; Problem and Opportunity

Posted To: MND NewsWire

An aging housing stock is usually thought of as a problem. Older homes can be more expensive to maintain and easily fall into enough disrepair to be a health or safety hazard or completely uninhabitable. Construction since the housing crisis has not kept pace with the homes that age out or are otherwise removed from the housing stock and this means that the overall age of the U.S. housing stock is gradually aging. Na Zhao, writing in the National Association of Home Builders' (NAHB's) Eye on Housing blog says data from the 2016 American Community Survey (ACS) puts the median age of owner-occupied homes at 37 years compared to a median age of 31 years in 2005. The aging trend, as the figure below shows, accelerated during the Great Recession. Na Zhao, while not denying that the increasing age...(read more)

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MBS Day Ahead: Let's Talk Turkey

Posted To: MBS Commentary

Turkey (the country, not the lunch meat) is the 17th biggest economy in the world in terms of GDP. That's roughly 20% bigger than the next closest country, Saudi Arabia, and 4 times bigger than Greece. All that to say, Turkey isn't a completely insignificant piece of the global economy. So the fact that they're having a rather epic debt crisis is making the news. I discussed this a bit yesterday, and at the time, we weren't seeing enough correlation spill over from the plummeting Lira to US markets. Not only that, but by far and away, yesterday's biggest domestic market movements were completely independent. Bonds big move lower in yield followed the Producer Price Index. At that time, Lira were doing nothing. And it was the same story with the quick stock sell-off at 3...(read more)

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Correspondent Product; Corp. Structure Changes - A Wealth of M&A

Posted To: Pipeline Press

This week in Salt Lake City, mPower hosted an event at the Lenders One Summer Conference, drawing nearly 400 people. The executive panel, led by MBA's Tricia Migliazzo, presented challenges and solutions in today's workplace and shared insights for what it takes to lead in the mortgage industry. The session marks the 13 th in-person mPower programming event for 2018. mPower, MBA Promoting Opportunities for Women to Extend their Reach, is MBA’s networking and professional development platform for women in real estate finance. Corporate Changes and M&A Corporate changes continue, whether it is at small lenders across the nation, National MI, or last week’s news from Wells Fargo for its warehouse clients. “The Mortgage Banker Finance Group (MBFG), Wells Fargo Securities'...(read more)

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Affordability at 10-Year Low, Tariffs and Rate Hikes Made It Worse

Posted To: MND NewsWire

We now have an unfortunate sign that the recovery is complete. The National Association of Homebuilders (NAHB) says housing affordability is the lowest level since just before the housing crisis hit. The NAHB says the Wells Fargo Housing Opportunity Index (HOI) shows that a combination of rising home prices and higher mortgage rates now means that only 57.1 percent of new and existing homes sold during the second quarter of 2017 were affordable to families earning the U.S. median income of $71,900. This is down from the 61.6 percent of homes sold in the first quarter that were affordable to median-income earners and is the lowest reading since mid-2008. The index reflects the increase in the national median home price to $265,000 in the second quarter, the highest median price ever recorded...(read more)

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MBS RECAP: Good Day For Bonds as PPI Stokes CPI Bets

Posted To: MBS Commentary

Have you heard the one about the Turkish debt crisis? Things are pretty bad for Turkey and the currency is indeed in freefall, but until the charts do something different, they're not yet making a compelling case for a "risk-off" connection to the US bond market. Rather, today's action was centered on this morning's Producer Price Index (PPI). PPI isn't typically a big market mover, but the stakes are a bit higher at the moment. Reason being: tomorrow brings the more important CPI data (consumer price index). The most widely-followed part of the CPI data--"core" year-over-year--has poked and prodded a ceiling of 2.3% during the recovery from the Great Recession, but it has yet to break through. With last month's reading right on the 2.3% line, a downturn...(read more)

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Lowest Mortgage Rates in Several Weeks

Posted To: Mortgage Rate Watch

Mortgage rates finally did what they were supposed to do today. Specifically, they fell in response to bond market improvement. That's the way it should be, but over the past two days the typical relationship between bonds and mortgage lenders' rates has been a bit inconsistent due to the timing of market movement throughout the day. On Tuesday, bonds weakened throughout the day. This would normally coincide with rates moving higher, but the bond market weakness didn't happen quickly enough for most lenders to take action. As such, they were left to make the adjustment the following morning. Then on Wednesday, bonds improved, but not quickly enough for most lenders to bring rates lower. That left us with a bit of an advantage to start the day today. Before most lenders published their first...(read more)

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Fannie Mae Announces Wildfire Policies

Posted To: MND NewsWire

Fannie Mae has informed us that they too have activated their disaster response policies for homeowners , this time for those affected by the California wildfires. Homeowners impacted are eligible to stop making mortgage payments for up to 12 months during which time they will not incur late fees or have delinquencies reported to the credit bureaus. While homeowners are advised to contact their mortgage servicers as soon as possible those servicers are also authorized to suspend or reduce a homeowner's mortgage payments immediately for up to 90 days if they believe a homeowner has been affected, even without homeowner contact. Any eligibility for up to 12 months forbearance will not be affected. Servicers must suspend foreclosure and other legal proceedings if it believes there is a disaster...(read more)

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MBA Says New Home Purchase Apps Reflect Housing Start Surge

Posted To: MND NewsWire

The Mortgage Bankers Association (MBA) says that responses to its recent Mortgage Builder Applications Survey indicates an increase of 3.6 percent in applications for financing newly constructed homes in July compared to the same month in 2017. That is an 0.2 percent uptick from June. Based on the survey results, which are not seasonally adjusted, and other assumptions about factors that include market coverage, MBA estimates that new single-family home sales were running at a seasonally adjusted annual rate of 637,000 in July. This is an 8.5 percent increase from MBA's June estimate of 587,000 units. On an unadjusted basis, MBA estimates that there were 53,000 new home sales during the month, the same number as in June. Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting...(read more)

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MBS Day Ahead: Bonds Look Like They Might Try Again

Posted To: MBS Commentary

In the short-term (past few weeks), the trend has not been our friend. After breaking above a narrow, sideways range, yields had been pushing higher and even crested 3% on the first 2 days of the month. Over the past week, however, they've been trying to change their evil ways- -trying and mostly failing. The benchmark for these efforts depends on your perspective, but the pivot point (a level that has tended to result in more bounces than breaks when approached from either direction) of 2.95% is well-situated to cast some judgment . Also nearby is the middle bollinger band (a 21-day exponential moving average that often serves as the dividing line between positive and negative momentum. Then there are the momentum studies themselves. These involve somewhat more complex math, but all seek...(read more)

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Lender Resources; More Zillow/MLOA Q&A; Rates Treading Water

Posted To: Pipeline Press

Lots of originators are fascinated by demographics. Every year, about 27,000 people move from New York City to Philadelphia , making that specific move one of the largest region-to-region migration flows in the United States. New York in general is often the first stop for immigrants coming to the U.S., and Philly is appealing to both young families trying to get a lower cost of living as well as immigrant populations seeking a long-term community after arrival - and the chance to spend the summer at a beach house with all your next-door neighbors from back in Philly! The number of Philadelphia residents born abroad has increased by 69 percent since 2000. Zillow I keep being asked, “Will Zillow Mortgage/MLOA use Zestimate as a home’s value?” (On a serious note, what happens...(read more)

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MBS RECAP: Well-Receive Treasury Auction: Chicken or Egg?

Posted To: MBS Commentary

This week continued in the fine tradition of of ultra-light summertime volume and liquidity, but today's contribution was a bit more worthwhile than the previous 2 entries. Today, at least, had the 10yr Treasury auction--the heretofore most important event of the week for bond markets. This was the biggest 10yr auction in history--not in terms of importance, but in terms of the outright amount being auctioned. How would markets digest this glut of issuance on an illiquid summer trading week that was already seeing a bigger-than-expected surge in corporate bond issuance? As fate would have it, markets coped pretty darn well. There was no meaningful sell-off ahead of the auction, and the stats were definitely on the strong side. Despite that, we didn't have any meaningful relief rally...(read more)

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Mortgage Rates Edge Higher Despite Market Improvement

Posted To: Mortgage Rate Watch

Mortgage rates were modestly higher today. Much like yesterday, there's a catch! Yesterday's catch was that underlying bond markets had weakened enough during the day that today's rates were more likely start out higher. That was indeed the case. Therefore, today's "opposite" catch is that bond markets strengthened enough during the day that it implies slightly lower rates tomorrow morning, all things being equal. In other words, bond markets didn't improve quite quickly enough for most lenders to adjust mortgage rate sheets in the middle of the day today, but they did improve enough for rates to be just a bit better if nothing changes between now and tomorrow morning. All of the above requires a fairly familiar caveat: we continue talking about "movement" in mortgage rates when, in fact, there...(read more)

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Freddie Mac Announces Wildfire Forbearance Policy

Posted To: MND NewsWire

Some are saying that 2018 may be the worst year in history for wildfires in California and other states are threatened by blazes as well so Freddie Mac is reaffirming its disaster relief policies. The policies apply to borrowers with homes in Federal Emergency Management Agency (FEMA)-declared disaster areas where individual assistance programs have been made available to affected individuals and households. The options include suspending foreclosures by providing forbearance for up to 12 months and waiving penalties or late fees for borrowers with disaster damaged homes. Areas with FEMA programs are listed on FEMA's website. Where those FEMA programs are not available, Freddie Mac servicers are empowered to use Freddie Mac's forbearance programs to provide mortgage relief to borrowers affected...(read more)

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Existing Home Sales "Cooled" in Q2, Prices Did Not

Posted To: MND NewsWire

The National Association of Realtors® (NAR) said existing home sales cooled during the second quarter amidst what it called "staggeringly low" inventories and steadily appreciating prices. The median national price of an existing single-family home in the second quarter was $269,000, which is up 5.3 percent from the second quarter of 2017 ($255,400) and surpasses that number as the new peak. The median sales price during this year's first quarter rose 5.7 percent on an annual basis. NAR's quarterly existing home sales report focuses on major metropolitan markets, and the second quarter edition says that single-family home prices increased during the period in 90 percent of measured markets. Sales prices gained year-over-year in 161 out of 178 metropolitan statistical areas (MSAs) tracked...(read more)

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