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Mortgage Related News

MBS RECAP: After Green Binge, Bonds Take "Sick" Day

Posted To: MBS Commentary

For the bond market St Paddy's day was a 2 week celebration of "green" (as in the color of price gains or falling yields on trading terminals) beginning on March 4th. Eight of those 10 business days saw yields move lower with last Friday marking the 2nd lowest closing levels in well over a year. It's only natural for bonds to need a bit of a break after all that partying. They joined plenty of other revelers who may have had too much green recently in taking the day off today. Granted, there wasn't any sort of official market closure, but it would have been hard to notice if there was! Volume was in line with the lowest levels of the year for a full business day and volatility was nowhere to be found. The absence of volatility is a victory of sorts, considering yields...(read more)

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Mortgage Rates Hold 14-Month Lows

Posted To: Mortgage Rate Watch

Mortgage rates didn't budge today--a logical result with no signs of life in underlying bond markets. In the current case, this is just fine with us considering the bond market has gone silent while remaining at the best levels in 14 months. Specifically, mortgage-backed-securities (MBS, the most important ingredient in determining mortgage rates) are at 14 month highs. When MBS are higher, rates are lower (14-month lows in this case). 10yr Treasury yields, on the other hand, spent a few hours at stronger levels on January 3rd, 2019. The only reason I bring up the modest discrepancy between Treasuries and MBS is to illustrate a point that we should keep in mind this week. Treasuries are capable of moving much more quickly than mortgage rates. That's why Treasuries made it to lower rates in...(read more)

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Builder Confidence Holds Steady After Recovering From 2018 Lows

Posted To: MND NewsWire

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) held steady in March , after partially recovering from substantial loses at the end of 2018. The Index, a measure of new-home builders' confidence in the market for newly constructed homes was unchanged at 62 on a 100-point scale. The index finished 2018 at 56, a more than three-year low, after dropping an aggregate of 12 points in November and December. NAHB says affordability still remains a key concern for builders. The skilled worker shortage, lack of buildable lots and stiff zoning restrictions in many major metro markets are among the challenges builders face as they strive to construct homes that can sell at affordable price points. Derived from a monthly survey that NAHB has been conducting for 30...(read more)

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MBS Week Ahead: Both Sides of Market Getting Excited For The Fed

Posted To: MBS Commentary

This week's economic calendar is exceptionally light, with no true top-tier reports. Even the 2nd-tier data is limited with Philly Fed on Thursday and Existing Home Sales on Friday. That leaves all the more focus on what was always destined to be this week's main event. Since the end of January, when bonds began making a case for a consolidation in the new, lower rate range, I've been harping on "mid-March" as the first real opportunity for a big break higher or lower in rates. The reasons for this were simple and twofold. First, the government shutdown cast uncertainty onto economic data at least through mid-March. Second: the Fed would be out with a scheduled policy announcement, press conference, and updated economic projections on March 20th. While the Fed has arguably...(read more)

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LO Jobs; Warehouse Products; 1099 Comp - Brokers and MBA Weigh In

Posted To: Pipeline Press

I hope that I never get to the point of writing things down on my “to do” list even after I’ve done them, just so I can cross them off the list. Or enjoying combining multiple “to do” lists into a master list, although (maybe) I’m already there. Many people in our industry wish the CFPB, or someone, would add “clear up mortgage loan officer compensation issues” on their list. We don’t want borrowers steered, but is there a loophole being exploited? If a broker has a set comp plan with Wholesaler A at 1.75% and Wholesaler B at .75%, and steers less sophisticated borrowers to Wholesaler A, is that legal? Kosher? Is the CFPB looking at whether or not a broker has standardized comp across all wholesalers? Lots more below. Lender Products and...(read more)

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MBS RECAP: Bonds Squeezed to Best Levels in Months Ahead of Fed

Posted To: MBS Commentary

Uncertainty has reigned supreme for much of 2019 as traders weigh shifting economic data, potential data inconsistencies (due the shutdown), trade policy, and Brexit-driven uncertainty against central banks' collective response. Everyone seems to be pretty confident that the Fed's response will include some new news on the topic of its balance sheet at next week's meeting. That uncertainty combined with the prospects for the friendly Fed news took bonds to their best levels in months as of Tuesday. From there, it looked like we were circling the wagons in preparation for next week's Fed, and that bonds were respecting a resistance boundary around 2.60%, or even 2.612% based on yesterday's domestic session lows. Traders set stop loss levels in line with 2.612%, but other...(read more)

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Rates Stay Low; Bigger Risks/Rewards Next Week

Posted To: Mortgage Rate Watch

Mortgage rates remained at recent lows today, as underlying bond markets strengthened. For US Treasuries, this brought rates to new multi-month lows. Mortgage-backed bonds, on the other hand, simply returned in line with the best levels of the week. That allowed mortgage lenders to continue offering the best rates of the week (also the best rates in more than year!). For most of 2019, rates have remained locked in a narrow range . The past few days have done more than any others to challenge that range, but it will likely take friendly words from the Fed next Wednesday to fuel any further improvement. With that in mind, I'd say that much of the recent strength in rates is based on hopes for friendly central bank policies . There's always a risk that the Fed isn't quite ready to say what markets...(read more)

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Aging Americans, Aging Housing Stock Driving Remodel Boom

Posted To: MND NewsWire

Nearly 80 percent of America's housing stock is at least 20 years old and twice that share of homes were built 50 or more years ago. With new construction still well behind its pre-recession levels Americans have been remodeling these older homes in huge numbers. The Joint Center on Housing Studies says there was $425 billion spent nationally on maintenance and improvement, a 10 percent increase from 2015 and more than a 50 percent gain from the 2010 low. In fact, that spending, by both owner occupants and landlords, has been the dominant share of residential investment in the years since the recession and generated 2.2 percent of total economic activity in 2017. Spending for improvements on rental properties are a larger share of spending than the historic average of 25 percent. A surge in...(read more)

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MBS Day Ahead: Not Another Ides of March Headline

Posted To: MBS Commentary

People who write articles every day love holidays and other dates that offer some reprieve from the need to be creative when it comes to writing headlines. On February 14th, they can incorporate love. On Halloween, it's a good bet that you'll see plenty of tricks, treats, and various iterations of "spooky." And on March 15th, "Beware The Ides of March" is king. I asked myself if we had anything to be wary of, and I got nothing--well... nothing I haven't already mentioned. For the record, the only negative risk at the moment is that bonds choose to bounce in the low 2.6% range ahead of next week's Fed Announcement for some reason. So far this morning, that doesn't look like a threat. In fact, both sides of the market (stocks and bonds) have generally been...(read more)

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Broker Products; UK says no to "no deal"; Shall We Call UMBS "Unis?"

Posted To: Pipeline Press

I didn’t know that America has a “most hated” type of home loan until Bloomberg “informed” me that reverse mortgages are… hated. Hated? Couldn’t the author have focused on the positives? Did you know that 87% of properties across the country are in an area eligible for 1 or more home ownership programs? Apparently . Lender Products and Services For a limited time only, NewRez Wholesale is offering free appraisals for Smart Series loan products (up to $650) and for FHA loan products (up to $550) through the month of March. This offer is available for new submissions only and loans must be locked by March 31st. Contact your AE today to learn more about how you can get an appraisal fee credit at your borrower’s loan closing. Some exclusions and...(read more)

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MBA has a More Upbeat View on New Home Sales

Posted To: MND NewsWire

Even though the January Census Bureau report on new home sales published on Thursday wasn't all that encouraging for the spring market, the Mortgage Bankers Association (MBA) is predicting more upbeat news for February. The Association's Builder Application Survey (BAS) shows a 6 percent increase in new home purchase applications from the previous month and a 3-point gain from February 2018. Those numbers are not seasonally adjusted. MBA estimates new single-family home sales were running at a seasonally adjusted annual rate of 690,000 units in February 2019, based on its survey data and assumptions regarding market coverage and other factors. This is down 3.2 percent from the January pace of 713,000 units. On an unadjusted basis, the estimate is for 59,000 new home sales in February 2019,...(read more)

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MBS RECAP: Small Scale Volatility Lost in Big Picture Shuffle

Posted To: MBS Commentary

In the bigger picture, we'll look back at today's intraday trading range and it will be completely meaningless--among the narrower days of 1st quarter of 2019. That's because, like yesterday, nothing interesting happened to motivate any meaningful movement. If that's all the more you'd like to know about today, feel free to go about your business and check back in tomorrow. You won't be missing much. For those of you that noticed the intraday mini-spike in bond yields, I'm afraid I don't have much more for you. We discussed this in detail in MBS Live and I spent most of the Huddle video time discussing it as well. Ultimately, there was no good case to be made for correlation with British markets, news, data, events, or the stock market (even though I saw several...(read more)

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Mortgage Rates Lowest in More Than a Year

Posted To: Mortgage Rate Watch

Mortgage rates held steady today, despite moderate weakness in underlying bond markets. This occurred for two reasons. First, yesterday saw bond markets improve, but not by enough for lenders to adjust rates lower in the middle of the day. Second, today's bond market weakness happened gradually throughout the day and was thus not big enough to prompt a mid-day rate change from lenders. The implication is that rates would likely be very slightly higher tomorrow if bond markets were to hold steady overnight. By remaining in current territory, rates are also remaining at the lowest levels since January 2018 . The average lender can now offer conventional 30ry fixed rates of 4.375% on top tier scenarios. FHA rates are a quarter point lower (or more, depending on the lender), but they carry mandatory...(read more)

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Surge of New Home Sales in West Salvage January Numbers

Posted To: MND NewsWire

It seems like only yesterday that we were looking at the December new home sale numbers - well actually it was 6 days ago. Now we have the January sales numbers as the Census Bureau and the Department of Housing and Urban Development continue to catch up from the shutdown's data drought. However, while December sales surprised everyone with a 16.9 percent increase to 621,000 units (now revised to 652,000) January took back a lot of those gains. Sales were at a seasonally adjusted rate of 607,000 units, a 6.9 percent reversal. This puts sales down 4.1 percent year-over-year. That the January numbers were not worse was solely due to a surge in sales in the West. They fell by double digit percentages in the other three regions. The January estimate was still solidly within the 590,000 to 640,000...(read more)

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MBS Day Ahead: How Much Do We Really Care About Brexit?

Posted To: MBS Commentary

Top line, bottom line: Brexit is a big deal. Without the Brexit referendum in mid-2016, US bond yields never would have revisited all-time lows. It's important to remember that London is big player in financial market history. The London Stock Exchange was founded in 1571 or 1698, depending on how you look at it, and it became the first regulated exchange in history in 1801. With that date roughly coinciding with the proliferation of the telegraph, this was arguably the birthplace of modern financial markets. To this day, London is ranked as the 2nd biggest financial center behind New York. It's importance is only amplified due to the closer relationships between the two cities. The UK has long been the English-speaking base camp for US-based traders who participate in European markets...(read more)

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Digital Products; Loan Package for Sale; Fee and Pricing Changes

Posted To: Pipeline Press

Happy pi day, 3.14… Did you hear about the three statisticians that went out hunting? They spotted a rabbit. The first shot too high. The second shot too low. The third cried out, “We got it!” Statistics are tricky things (are sales of new homes down because of high prices or lack of inventory?), and real estate agents love stats for their neighborhoods. Their role is certainly changing, however, as spelled out in this report . Lender Products and Services Galton Funding has made it easier than ever to qualify your Prime Credit self-employed borrowers . In addition to recent pricing enhancements, Galton has made major upgrades to its 12- and 24-month bank statement programs. Galton now allows the use of a P&L Statement along with the business bank statements to determine...(read more)

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Housing Market OK to Weather an Economic Downturn

Posted To: MND NewsWire

Folks who follow real estate might be getting a little nervous. Since that category includes almost everyone who owns a home, wants to own a home, or makes money buying, selling, building, or furnishing a home, that could be a lot of edgy people. And not without reason. Ralph Mclaughlin points out in CoreLogic's Insights blog that is seems lately as though the roof of the housing market might cave in. There has been a lot of volatility as of late. He cites as examples, a seven straight month decline in the S&P CoreLogic Case-Shiller Home Price Index , a whopping 12 percent plunge in new home at the end of last year, and rising inventories of available homes. Plus, the country is only six month's short of the longest economic expansion in history. So, he says, "It is understandable why some...(read more)

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MBS RECAP: Bonds Resilient Streak Under Threat

Posted To: MBS Commentary

For the most part, today was marked by the same sort of resilience seen on several recent occasions where bond yields have either held steady or fallen despite decent-to-strong economic data. In today's case, it was a fairly healthy (depending whom you ask) improvement in durable goods (cap-ex +0.8 vs +0.1 forecast). The caveat is that was January data (government shutdown month), and thus taken with a grain of salt. Producer prices were weaker than expected, and because that was a February report, may have been worth some bond market resilience in the morning. Either way, bonds were weaker to start the day, but didn't weaken further after the early data. Additional resilience came into play after the 1pm 30yr bond auction. The auction was weaker than expected, but bonds didn't...(read more)

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Mortgage Rates Technically Lower, But Risk Rising Tomorrow

Posted To: Mortgage Rate Watch

Mortgage rates were officially lower today, despite some weakness in the bond market. In general, bond market weakness coincides with rates moving higher. This time around, the weakness was minimal, and mortgage lenders had a bit of catching up to do with respect to yesterday's bond market gains. The changes were very small for the average lender, but they technically result in yet another long-term low (best rates since January 2018). Clouds began to roll in by the end of the day in response to a glut of news out of the UK. As expected, British politicians voted to avoid exiting the EU without some sort of deal. On a somewhat unexpected note, there seems to be a quickly growing consensus that a different brexit compromise deal has enough support to pass, or at least to come much closer than...(read more)

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Lender Survey: Easing Standards, Increased Demand, and More Profit

Posted To: MND NewsWire

While still far from buoyant, mortgage lenders were a little more upbeat about their expected profit margins and the demand outlook for both purchase and refinance mortgages when responding to Fannie Mae's first quarter Mortgage Lender Sentiment Survey. The net share of lenders reporting that demand had increased for purchase mortgages over the prior three months fell to a new survey low, however the net responses reflecting more positive expectations for the upcoming three months rose compared to one year ago. The responses were consistent across all loan types. While more lenders continued to report weaker demand for refinancing over the previous three months than reported rising demand, the net share of positive responses increased significantly; rising to the highest level in two years...(read more)

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Private and Public Construction Spending Increased

Posted To: MND NewsWire

Construction spending in ticked up in January to a seasonally adjusted annual rate of $1.280 trillion according to data released by the Census Bureau on Wednesday. The rate was 1.3 percent higher than the December estimate of $1.263 million and 0.3 percent higher than the pace in January 2018. On a non-adjusted basis, the amount spent by both private and public entities was $88.086 billion compared to $95.191 billion in December and $88.504 billion the prior January, an annual decline of 0.5 percent. Expenditures on construction throughout 2018 totaled $1.293 trillion compared to $1.246 trillion for all of 2017. This was an increase of 3.8 percent. The largest single non-residential expenditure during the year was for construction related to power, $100.180 billion. Privately funded construction...(read more)

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MBS Day Ahead: Risky Rate Floor Still Has Ceiling Potential, But It's a Long Shot

Posted To: MBS Commentary

Yesterday saw bonds tag their best levels since early January (Jan 3rd was the only day in over a year where yields closed any lower) on a combination of several events. Those events included weaker inflation data in the morning, a strong 10yr Treasury auction, and some back-and-forth headlines surrounding Brexit. We came into today expecting to see a bigger reaction in this morning's Durable Goods data, but that has quickly proven to be a non-starter. Perhaps we can rationalize this by observing Cap-Ex (the core component of the Durable Goods data that strips out defense and aircraft spending) remaining at lower levels than it was 2 months ago, despite bouncing back somewhat in the most recent report. Rather than rationalize an absence of reaction to today's data, we can also simply...(read more)

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Recruiting, Sales, and Compliance Products; Training and Events; What to Call UMBS?

Posted To: Pipeline Press

Builders, appraisers, & real estate agents love to talk about square feet. Houses are becoming larger as households have become smaller. Right now, the average square footage for an American home is about 2,600 square feet, but the average American family has decreased from 3.67 people in 1948 to 2.55 people in 2012. This means that the square footage per person increased from 507 in 1973 to 971 square feet per person today. Those empty nester Baby Boomers just aren’t moving! Lender Products and Services Nations Direct Mortgage is excited to introduce two new Jumbo products: Premier Jumbo Direct and Jumbo Direct. “We are seeing increasing demand for these expansive jumbo products , both of which will be an excellent complement to our wildly successful Non-QM products”...(read more)

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Purchase Applications Resume Upward Climb

Posted To: MND NewsWire

Overall mortgage application activity resumed an upward trend last week, with another strong showing for purchase volume. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 2.3 percent on a seasonally adjusted basis during the week ended March 8. On an unadjusted basis, the Index was up 3 percent compared with the previous week. The seasonally adjusted Purchase Index gained 4 percent from the prior week and was 6 percent higher unadjusted. Purchase applications were 2 percent higher than during the same week in 2018. The Refinance Index dipped 0.2 percent and refinance applications dropped to 38.6 percent of the total from 40.0 percent the prior week. It was the lowest share for refinancing since the week ended November 23, 2018...(read more)

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MBS RECAP: Bonds Go 3 For 3 on Friendly Developments

Posted To: MBS Commentary

There were three salient market movers for the bond market today with one of them being a 2-parter. First up was Brexit news in the overnight session. This began with a compromise deal looking more possible early on. The result was a move toward higher yields early in the overnight session (compromise + deal = soothing to market uncertainties = bad for bonds). By the time the sun was up in New York, the British Attorney General had thrown cold water on the deal and bonds were starting to recover . The recovery was bigger in Europe vs the US and most noticeable in British currency. US bonds were able to catch up with the rally after weaker-than-expected inflation data (CPI) at 8:30am ET. This took bonds easily into positive territory where they remained for the rest of the day. After fairly...(read more)

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Joe Sanchez
Terra Linda Realty
Ph: 909-931-1307Fax:909-803-9840
400 North Mountain Ave., Suite 223
Upland, CA 91786 US
BRE License # 01201910
www.terralindarealty.com
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