Mortgage News Daily

Posted To: MND NewsWire

Like Fannie Mae, Freddie Mac's economists are viewing the disruptions from the recent hurricanes as short-lived . The 33,000-job loss in September, for example, was largely attributable to a steep month-over-month drop in hiring in the leisure and hospitality industry, almost certainly an effect of the storms. The already tight supply of homes was exacerbated by the hurricanes, with total home sales for August at a weak 5.9 million units. Freddie Mac's economists devote most of this month's Outlook to looking at the potential impact in the shorter and longer terms. Moody's Analytics' preliminarily puts the economic losses in Texas and Florida from Harvey and Irma at almost $168 billion. Roughly $51 to $56 billion worth of residential real estate was affected by Hurricane Harvey and $30 to ...(read more)

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10/23/2017 4:02:15 PM

Posted To: MND NewsWire

It has been a tumultuous and unpredictable year. That was how David H. Stevens, President and CEO of the Mortgage Bankers Association framed his remarks to the MBA's 2017 Annual Convention and Expo in Denver. Stevens, who announced at last year's Expo that he was suffering from cancer, said he was speaking both about his personal battle (while announcing he is in full remission) and of the political winds that have been blowing. He warned members to guard against a false sense of security given the many changes that loom. Stevens recounted MBA's efforts over the past year to build relationships with the new administration. Meetings have been held with Housing and Urban Development (HUD) Secretary Ben Carson, and new teams at the U.S. Treasury and the White House. These meetings and other MBA...(read more)

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10/23/2017 3:57:32 PM

Posted To: MBS Commentary

I refer to some Mondays as unofficial 3rd days of the weekend, and today's example qualifies. There were no significant economic reports, no substantive headlines, and no major movement in bond markets. Add to that a general absence of volume (one of the lightest days in more than a month) and we have an ample case for an inconsequential trading day that may as well have been an extension of the weekend. Bigger decisions are ahead for bonds. That's the sense we were left with as 10yr yields hurtled toward 2.40% last Friday and the reality we were reminded of when today's only interesting tidbit crossed the wires: Trump is "very very close" to naming the next Fed Chair. It doesn't sounds like Yellen is in the running, which leaves the frontrunners as Powell and Taylor...(read more)

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10/23/2017 3:42:43 PM

Posted To: Mortgage Rate Watch

Mortgage rates were generally unchanged today despite slight improvements in underlying bond markets. As of last Friday, the average lender was quoting rates at or near the highest levels in more than 2 months, meaning today earns the same dubious distinction. The saving grace is that in relative terms, the past 2-3 months have been historically less volatile than normal, and conventional 30yr fixed rates at 4% (or just under) are still widely available for top tier scenarios. Today was light in terms of economic data and political events to inspire movement in rates, but that could change at any moment . President Trump told reporters that he is "very very close" to selecting the next Chair of the Federal Reserve (Yellen does not seem to be in the running based on his choice of words). Markets...(read more)

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10/23/2017 1:50:00 PM

Posted To: Pipeline Press

The undisputed hit of the conference so far in Denver? The MBA’s mPower event on Saturday. Yes, it eliminated "a Saturday off" for over 300 women, but the "MBA Promoting Opportunities for Women to Extend their Reach" has been heralded as a success. No "Think about smiling when you talk" advice was given. Led by Marcia Davies and her crew, it was filled with information on goals, leadership, information, networking, and support for women. Most excellent. Disaster Updates FEMA announced that federal disaster aid with individual assistance has been made available to Sonoma and Napa county in California to supplement individual, state, and local recovery efforts in the areas affected by California Wildfires during the period of October 08, 2017 and continuing. M&T Bank published the following...(read more)

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10/23/2017 7:26:14 AM

Posted To: MBS Commentary

While there are certainly some weeks with far fewer economic reports on tap, the week ahead is still on the light side when it comes to the data that has been moving markets of late. A few of the reports (like GDP and Durable Goods, for instance) have historical street cred, but they're not in the same league as the key inflation metrics at the moment. It was the Consumer Price Index (CPI) that served as the last major market mover in terms of economic data (Friday before last). That instance of CPI is still important to the current theme, because it gave bonds an opportunity to more forcefully shift into a more positive stance, yet the entirety of the following week (last week) was spent moving into weaker territory. That first 4 days of last week could have been seen as a sign that bonds...(read more)

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10/23/2017 6:56:07 AM

Posted To: MBS Commentary

There's a good video in the news stream with Austan Goolsbee going on a bit of rant about how the Senate's procedural vote on a budget resolution late last night was totally expected. Someone should have told financial markets ahead of time. Traders speak with dollars and their words were clear in response to the budget bill. Either it really was a surprise, or they were simply holding out for confirmation that the Senate could actually get the 51 votes needed. Indeed, Rand Paul's dissension made it a close call. Confused yet? The bottom line is that this procedural budget resolution contained language that will allow the Senate to pass tax legislation with 51 votes instead of 60. The fact that the Senate was able to get 51 votes together for this effort suggests to some that they...(read more)

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10/20/2017 4:53:22 PM

Posted To: Mortgage Rate Watch

Mortgage rates moved higher today as financial markets grew more optimistic about the potential for tax reform. Late last night, the Senate passed a resolution that included language designed to make tax reform legislation easier to pass. In a nutshell, it means the Senate only needs 51 votes as opposed to 60 when it comes time to consider a tax bill. Stocks like tax reform. They moved quickly higher in futures trading. Bonds (which dictate rates) aren't too thrilled with the idea for several reasons. They moved quickly lower in price, which equates to upward movement in terms of rates. Despite a fairly abrupt move in underlying trading levels, lenders' rate sheets weren't apocalyptically damaged . The average lender continues to quote rates that are roughly similar to those seen on October...(read more)

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10/20/2017 4:26:00 PM

Posted To: MND NewsWire

While it sometimes seems as though Americans live online, there is still apparently one area where they still value human contact. A recent survey conducted by Fannie Mae found borrowers continue to put a lot of trust in their real estate agent and their mortgage lender. The survey, conducted with borrowers who had purchase mortgages originated in 2016 in the Fannie Mae book of business, found that homebuyers relied on a variety of information sources when shopping for a mortgage. These included friends and family, financial planners, government agencies, mass media and non-profit housing counselors. However, when asked which were the most influential, borrowers most often cited, in fact at nearly double the rate of the next closest response, were mortgage lenders at 32 percent, with real estate...(read more)

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10/20/2017 10:49:43 AM

Posted To: MND NewsWire

It was only a small gain , albeit larger than analysts expected, but after three straight months of sliding sales, the existing home sales report for September is still good news. The National Association of Realtors® (NAR), said the month saw closed transactions for the purchase of single-family houses, townhouses, condos and cooperative apartments rise to a seasonally adjusted annual rate of 5.39 million. This is an increase of 0.7 percent from the August rate of 5.35 million. NAR noted that "Ongoing supply shortages and recent hurricanes muted overall activity." This meant that even as sales were higher compared to August, they were down 1.5 percent year-over-year and were the second slowest of the year, trailing only those in August. Analysts polled by Econoday were looking for sales...(read more)

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10/20/2017 8:53:46 AM

Posted To: MND NewsWire

Refinancing increased its share of total originations in September, rising 3 percentage points from August to 38 percent of all closed loans. Ellie Mae, in its Originations Insight report says the refinance share was the highest since February and set forth two possible reasons. First, interest rates on closed loans during the month dipped to the lowest of the year, 4.21 percent. Second, the time to close a refinance fell to 40 days, the shortest timeline since February 2015. After remaining steady for several months, the distribution of loans shifted slightly. The conventional loan share picked up 2 points to 66 percent at the expense of FHA l oans which dropped 2 points to 20 percent. The VA share remained at 10 percent as it has all year. While refinancing loans closed faster, purchase loans...(read more)

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10/20/2017 7:39:46 AM

Posted To: Pipeline Press

Not only are houses becoming smaller, but the lots are smaller also. Trulia tells us that houses built since 2015 occupy, on average, 25 percent of the land they were built on. That figure was only 13.9 percent in 1975. And according to Capital Economics Ltd. , the size of an American home has decreased for the first time in 30 years to 2,420 sq. ft. after peaking in 2015 at 2,520 sq. ft. This is attributed to the shrinking of homebuilder margins due to a shortage of labor and land. And lastly, my guess is that the huge rental companies are chomping at the bit over this news: Houston is seeing homes sold for 40 cents on the $1 after the flood. An estimated 1.8mm homes suffered uninsured losses, according to CoreLogic Inc. New Products From Lenders and Vendors This week, Informative Research...(read more)

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10/20/2017 7:38:46 AM

Posted To: MBS Commentary

It's a crappy day. Sorry to use such an esoteric analytical term, but it's the most accurate way to describe the outlook. So what changed? Long story short, we'd been in a narrow, consolidative range since late September. That range had a chance to be a straight up correction back toward lower rates, but bonds weren't able to maintain momentum after last Friday's strong post-CPI rally. Resistance kicked in at a well-traveled technical level of 2.28%, thus setting up the lower boundary of the consolidative range. Until yesterday, we HAD a series of "lower highs" in rates to offset the series of "higher lows." In short, yields were converging, and it was anyone's game. This morning, the upper consolidation line (both in teal in the following chart)...(read more)

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10/20/2017 7:38:02 AM

Posted To: MBS Commentary

It was a pretty interesting session for how narrow the range continues to be in bond markets--interesting both for bonds themselves and for the analysts scrambling to make sense of the movement. Apart from last Friday's CPI data, there hasn't been an unequivocal market mover for bonds. There hasn't been an obvious theme with a predictable reaction. That resulted in the collective Western analytical mindset concluding that it must be something Western behind the movement. The leading Western candidates for drama included Catalonian independence with Brexit headlines being a distant second. I was pretty dismissive about Catalonia as a market mover until this morning, because the overnight surge in bonds (and massive drop in stocks) lined up perfectly with the 4am ET deadline for Catalonia...(read more)

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10/19/2017 3:11:42 PM

Posted To: Mortgage Rate Watch

Mortgage rates were unchanged to slightly lower today. Political drama in Europe pushed stocks lower overnight and sent investors toward safer haven assets like bonds. Higher demand for bonds pushes rates lower, all things being equal. All of the above meant a stronger start for bond markets and slightly lower mortgage rates this morning. Still, the average improvement was so small that it was barely noticeable, largely because bonds had weakened yesterday afternoon, implying that lenders would have started today at a disadvantage were it not for the overnight improvement. Still with me there? In a nutshell , bond market weakness yesterday never made it onto lender rate sheets and this morning's bond market strength was just barely enough to counteract that weakness. We're splitting hairs in...(read more)

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10/19/2017 2:10:00 PM

Posted To: MND NewsWire

Home remodeling activity reported by builders increased in the third quarter and remains above the benchmark 50 level for the 18 th consecutive quarter. The National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) rose 2 points to 57 as more builders reported increased market activity compared to the previous period than reported it as lower. NAHB's survey asks remodelers to report current activity overall, and in three areas , major additions and alterations, minor additions and alterations and home maintenance and repairs. The measure of overall activity increased 1 point to 56; the major additions component dipped 1 point to 53, minor additions rose 3 points to 56, and the maintenance and repair category was up 1 point to 58. The survey also looks at future conditions...(read more)

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10/19/2017 12:59:28 PM

Posted To: MND NewsWire

A new Bulletin from Freddie Mac makes several changes to its Seller Guide . The most impactful changes relate to the way sellers can calculate student loan debt for inclusion in the monthly payment debt-to-income ratio. Under the current policy, when a seller cannot provide the monthly payment required on a student debt from information on the borrower's credit report, it must obtain other documentation with that information to include in the monthly DTI ratio. The new guideline allows the seller to use credit report information where available, but lacking that, to assume the monthly payment is 0.5 percent of either the original loan balance or the current balance, whichever is greater. Freddie Mac says traditional student loan repayment plans provided for fully amortizing monthly payments...(read more)

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10/19/2017 7:42:46 AM

Posted To: Pipeline Press

Yesterday I had some interesting geographic involving the United States that prompted Tony H. to send a few more items. The closest state to Africa? It’s Maine! (Quoddy Head. The largest U.S. city closest to Africa is Boston.) And if one flew directly south from their home in Hickory, NC, one would miss the entire South American mainland – the continent is that far to the east. Vendor Products and Denver Conference Exhibitions "Fundingshield, the leader in loan level wire account settlement party verification, issued an alert of an increased expectation of wire fraud this holiday season based on firm analytics, trends over the past 10 years of data, and the current rise in cyber related system breaches. "The data, clearly points to the fact that the holiday season adds to the opportunity...(read more)

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10/19/2017 7:26:51 AM

Posted To: MBS Commentary

The past 3 days were disconcerting for bond markets--especially yesterday, which saw yields move higher at their quickest pace in two weeks. This threatened to reverse the positive trend that looked like it was confirmed by last Friday's CPI-driven rally. But as we discussed in the recap yesterday , 2 simple levels would need to be broken before it was anything other than a consolidative pain trade. What we're left with--for now--is a classic little pain trade for bond bulls; a push back against the obvious technical implications of last week's gains. Until and unless 10yr yields break above key technical ceilings at 2.37% and 2.40%, this is still just a consolidative move, but admittedly a more uncomfortable one than it was 24 hours ago. With the benefit of a few more hours of...(read more)

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10/19/2017 6:34:18 AM

Posted To: MBS Commentary

Everything seemed so simple last Friday when bonds were surging past technical barriers in strong volume--ostensibly ringing the dinner bell for more bond buying. The fact that everything seemed so simple was also the biggest risk. Perhaps it was "too simple." Perhaps the technical conclusions were too obvious. The weakness so far this week shows us why. The weakness was easier to brush off as a modest consolidation of last week's strength yesterday. At that time, none of the losses were so severe as to suggest we question the reversal leading back from the high yields seen in early October. If that didn't change today, it became a much closer call. 10yr yields rose more than 4bps and Fannie 3.5 MBS fell a quarter of a point . The selling transpired with precious little justification...(read more)

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10/18/2017 2:58:22 PM