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Mortgage Related News

MBS Day Ahead: What's a Pivot Point? Which One to Watch?

Posted To: MBS Commentary

We have a dedicated primer on pivot points here . But let's look at a timely example with the pivot points we've been tracking in recent weeks. Actually, only one of the two has been actively discussed, the other is both newer and older (it was in play several months ago, took a break, and is now back in play due to last week's gains). The pivot points in question are 10yr yield levels of 2.215 and 2.182% (read the primer on why we look at 10yr yields on an MBS site here , if you like). Taking these levels out to the thousandths place isn't really necessary, so you're welcome to think about them as 2.21-2.22 and 2.18-ish. Yes, I would love it if things were more concrete and tidy, but they never will be when it comes to markets. There's nothing too mysterious about pivot...(read more)

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Home Price Gains Slow on FHFA Index

Posted To: MND NewsWire

The Federal Housing Finance Agency (FHFA) reported on Tuesday that home prices were up in 48 states and the District of Columbia during the second quarter of 2017. The agency said that its Housing Price Index appreciated 1.6 percent compared to the first quarter of the year. Year-over-year prices, expressed as an increase from the second quarter of 2016, was 6.6 percent. On a monthly basis, prices in June were 0.1 percent higher than in May. All of FHFA's national numbers marked deceleration from earlier reports . The year-over-year figure in May was 6.6 percent and May's prices rose 0.4 percent when compared with April. The slowing of increases surprised analysts polled by Econoday. There were looking for even stronger monthly gains than in May, from 0.3 to 0.6 percent, with a consensus of...(read more)

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Power of Attorney Changes by State; Tweak LIBOR Rather Than Eliminate?

Posted To: Pipeline Press

From LOs to investors, no matter the real estate market, the story is the same: “Loosen up the credit guidelines all you want, but if there’s no inventory of houses for sale or being built, then I’ll merely have 20 prequals on my desk instead of the 10 I have now.” State-Level Power of Attorney News Yes, California has 20 million people more living in it than New York. The Census Bureau reports the top 10 largest states in population in 2016 are: CA (39.2mm), TX (27.9mm), FL (20.6mm), NY (19.8mm), IL (12.8mm), PA (12.8mm), OH (11.6mm), GA (10.3mm) and NC (10.2mm). All told, this group of states represents 51% of the US population. What does California have in store for housing? Due up soon: "The package of housing bills , the statement said, will include ongoing funding...(read more)

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MBS RECAP: Was the Eclipse a Market Mover?

Posted To: MBS Commentary

It's a good thing financial media outlets aren't too shy about covering topics outside the financial sphere because without the eclipse, there would have been nothing to talk about today. Volume and volatility dropped off a cliff, abruptly. In fact, the difference in tone was big enough that I wouldn't mind chalking up some of the ABSENCE of trading as a symptom of the eclipse. In other words, it wasn't necessarily a market mover as much as a market inhibitor. All that having been said, it would be hard to sort out just how much of the market's quietude was attributable to eclipse as opposed to the simple nature of the Summertime trading environment. Mondays tend to struggle for relevance in August regardless of astronomical events. If the eclipse possibly didn't matter...(read more)

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Mortgage Rates Steady at 2017 Lows

Posted To: Mortgage Rate Watch

Mortgage rates held steady to start the new week. This keeps them in line with the best levels since November 2016. There were no interesting developments in financial markets or in terms of economic data today. Most news coverage was focused on the solar eclipse. It's a good thing the eclipse happened, because it's not entirely clear what financial media outlets could have possibly discussed otherwise. But again, with rates at the lowest levels of the year, "boring" and "sideways" are only terms that inconvenience someone trying to write about market movements whereas they're a relative boon to consumers who are buying a new home or refinancing an existing mortgage. 3.875% remains the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios, although quite a few lenders...(read more)

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Residential Investment Weighed Down Q2 GDP

Posted To: MND NewsWire

Real residential investment subtracted from GDP in the second quarter of the year to the greatest extent since the third quarter of 2010. Fannie Mae's August Economic Developments notes a 6.8 percent annualized decline, but the company's economists expect that sector's contribution to rebound in the third quarter. Residential investment was only part of the GDP story with the first half of the year now complete. Fannie Mae had forecast growth of 2.1 percent on an annualized basis in its previous forecast, but midyear saw growth of only 1.9 percent. There should be a slight improvement in the second half of the year, the economists but are holding to their earlier whole year forecast of 2.0 percent. Risks to their forecast are called roughly balanced. On the upside, consumer spending may not...(read more)

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MBS Day Ahead: Nothing to do With The Eclipse

Posted To: MBS Commentary

Welcome! Here is a safe haven from all of the eclipse talk. It won't be mentioned at all in this article. Never mind that it's in the title and the first 3 sentences, because we're about to move on. Bond markets begin another "summertime" week where "summertime" refers not only to atmospheric seasonality but also to changes in market environment. We've talked about this ad nauseum recently--largely because it's summer and the seasonality is one of the more interesting features of bond trading at the moment. And yes, that's like saying that the most interesting thing about a sloth is how slow it moves. If you're interested in getting caught up on some of this "summertime" stuff, Friday's Day Ahead went into greater detail. Thursday's...(read more)

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Freddie, Fannie, and Lender Shifts in Appraisal and Inspection Policies

Posted To: Pipeline Press

What does $980k buy in the SF suburb of Vallejo, CA? A property designed by Julia Morgan (think Hearst Castle) with floating stairways, over-sized eves, massive beams, decks, and the use of exquisite wood wainscoting. The photos are sure impressive . Freddie and Fannie News, Lender Changes For wholesale and non-delegated clients, Parkside Lending, LLC , a national wholesale and correspondent lender, is pleased to announce that it has adopted the new Fannie Mae DU enhancement that will allow Property Inspection Waivers (PIW) for purchase transactions . DU will compare the address for the subject property to the property address found in Collateral Underwriter (CU). When a match is found, DU will then use the information to determine if the loan is eligible for a PIW. Effective with loan casefiles...(read more)

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MBS RECAP: Bonds Manage to Close 'Unchanged' Despite Some Volatility

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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More 2017 Lows for Rates; More Trump Drama

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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Freddie Mac to Automate Appraisals for Some Purchase Mortgages

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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Freddie Mac Puts Price on All-Cash Transactions

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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Appraisal News; Lock Process Changes; HARP, CRT

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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MBS Day Ahead: Most Traders Thinking "Don't Rock The Boat"

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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MBS RECAP: Introducing The "Snow Cohn"

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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Trump Administration Drama Pushing Rates Even Lower

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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Doís and Donítís For Divorce Attorneys (and Their Clients Owning Real Estate)

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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CoreLogic - Don't Overlook Rates in Affordability Discussions

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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MBS Day Ahead: Trader Ghost Town Greases Skids For Volatility

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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Refis Enjoy Nice Bounce Thanks to Lowered Rates

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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State-Level Licensing Law Changes; TRID-Related Process Changes

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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MBS RECAP: Bonds Rallied on Trump Tweet Before it Ever Came Out

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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Mortgage Rates Back to 2017 Lows on Trump Tweet

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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Pitiful Housing Supply Slighted Dampened Q2 Home Sales

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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Construction Indicators Slide, Housing Starts Suffer

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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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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