A Poem to Sum Up the Year in Mortgage Lending

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Posted To: Pipeline Press

You may remember this scene in Fast Times at Ridgemont High, where Spicoli has a pizza delivered to class. Mr. Hand: "Am I hallucinating here? Just what in the hell do you think you're doing?" Jeff Spicoli: "Learning about Cuba, and having some food." Mr. Hand: "Mr. Spicoli, you're on dangerous ground here. You're causing a major disturbance on my time." Jeff Spicoli: "I've been thinking about this, Mr. Hand. If I'm here and you're here, doesn't that make it our time ? And certainly there's nothing wrong with a little feast on our time?" Mr. Hand: "You're absolutely right, Mr. Spicoli. It is our time - yours, mine, and everyone else's in this room." As our time together in 2010 comes to a close, many in mortgage banking, real estate, and MBS trading wonder what 2011 will hold - just like every...(read more)

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Positional Support Keeps Rates Rally Intact. Benchmarks Teetering on Breakdown

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Posted To: MBS Commentary

10s have largely been able to elude the brunt of three bond bearish data sets this morning thanks to month-end index extension needs and previously placed positions, but we're not seeing much follow through or intent to extend yesterdays rally either. We're actually teetering on a breaking point at the moment. One that needs to hold. 10yr futures are currently testing the base of yesterday's rally, where volume accumulated as new long positions were added and rates really dipped. Now those traders are attempting to defend that position. If this support level fails we could see 10s jump back to the high 3.40s. Zooming out a bit...3.40% is a highly trafficked pivot in cash 10s. We targeted 3.31% into the new year, but after seeing how fast profits were booked when 10s crossed through the 3.36...(read more)

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Robo-Signers aren't exactly experts

Who are the robo-signers we are hearing so much about?  Well, they certainly aren't real estate experts!  It seems that most of the robo signers are previous hair dressers,  wal-mart employees, http://bit.ly/dU1A3W

Mortgage Rates: Two Days of Volatility Jammed Into One

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Posted To: Mortgage Rate Watch

Tuesday was a sensory overload for rate watchers. Lenders repriced for the worse. Then they repriced for the worse again. And again. One lender recalled rate sheets five times! I am not kidding. 5 TIMES!! That is a lot of repricing for the worse. Repricing for the worse = higher mortgage rates. Wednesday was a sensory overload for rate watchers. Lenders repriced for the better. Then they repriced for the better again. And again. One lender recalled rate sheets five times! I am not kidding. 5 TIMES!! That is a lot of repricing for the better. Repricing for the better = lower mortgage rates. Oh you know it's coming... Today was a sensory overload for rate watchers. Lenders repriced for the worse. Lenders repriced for the better. In the end, mortgage rates were UNCHANGED ON THE DAY!!! HAHA. I...(read more)

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Foreclosure Freeze

Fannie & Freddie play Santa Claus and put a foreclosure freeze in effect...http://bit.ly/hYbKCi

The Day Ahead: Jobless Claims, Chicago PMI, Pending Home Sales

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Posted To: MBS Commentary

Bonds are backing up a bit while and equity futures point modestly lower on the last full trading trading day of the year. Seventy minutes before the opening bell, S&P 500 futures are 1.50 point lower at 1,254.25 and Dow futures are 8 points lower at 11,524. The 10 year Treasury note is -7/32 at 93-21 yielding 3.386%. The 2s/10s curve is 1bp steeper at 273bps wide. The FNCL 4.5 MBS coupon is -1/32 at 102-04. Yield spreads are tighter on the open. The equity market is poised to finish 2010 on a positive note. Yesterday, before a last-hour sell-off, the Dow touched the 11,600 level for the first time since September 2008. Meantime, the S&P has climbed 6.71% since Dec. 1 and 12.97% since the start of the year. Just ahead of today’s new data, economists at Deutsche Bank released a...(read more)

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Mortgage Rates: Multiple Reprices for Better Reported. Borrowing Costs Down

Hot news from AZ Home Help:

Posted To: Mortgage Rate Watch

Yesterday was a sensory overload for rate watchers. Lenders repriced for the worse. Then they repriced for the worse again. And again. One lender recalled rate sheets five times! I am not kidding. 5 TIMES!! That is a lot of repricing for the worse. Repricing for the worse = higher mortgage rates. Today was a sensory overload for rate watchers. Lenders repriced for the better. Then they repriced for the better again. And again. One lender recalled rate sheets five times! I am not kidding. 5 TIMES!! That is a lot of repricing for the better. Repricing for the better = lower mortgage rates. The culprit behind yesterday's sell off was a weak Treasury auction. The culprit behind today's rally was a strong Treasury auction (although we witnessed bargain buying before the auction). Sorry for repeating...(read more)

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Mortgage Rates: Multiple Reprices for Worse Reported. Borrowing Costs Up

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Posted To: Mortgage Rate Watch

If 4.75 was really on the table yesterday, it's not still there today. A thinly attended Treasury auction is cited as the culprit behind rising mortgage rates today.The worst damage hit the tape in the early afternoon hours. And we never came up for air again. Reprices for the worse were reported. More than one lender repriced for the worse x 2. When a lender "reprices for the worse", their mortgage rates rise. Rates rose regardless of two weak economic reports. This reaction is counterintuitive to how one would expect the bond market to behave following a disappointing economic update. It does however remind us of the impact seasonal trading influences can have on loan pricing. This is what we said yesterday on the subject.... The final week of the year is historically slow on Wall Street...(read more)

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MBS End Day at Session Lows. Treasury Yields Chop Higher

Hot news from AZ Home Help:

Posted To: MBS Commentary

Today was not great for MBS. 4.50 MBS coupons lost nearly a point, going out -25/32 at 101-10. Losses of that magnitude are not common, though you've seen your fair share lately. But when certain factors coincide, the risk of such steep declines grows. Here's a short run down of factors working against bonds today: Low Volume. You'll hear this come up again and again as it exagerates price movements, makes them happen more quickly, and in wider ranges Yesterday saw a "decent" auction lead to good gains. But we weren't sure if the gains were justified by the auction based on the buyer make-up metrics. Today reminded us why. Today's auction was considered as bad as yesterday's auction was considered good Econ data was taken with a "pass/fail" sort of assessment, so even though Case Shiller and...(read more)

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The Day Ahead: Case-Shiller HPI, Consumer Confidence, $35 Billion 5s Offered

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Posted To: MBS Commentary

Benchmark interest rates are holding onto yesterday's post-auction bond market rally even as equity futures rally toward new two-year highs. This comes ahead of home price and consumer confidence data later this morning. Seventy minutes before the opening bell, the 10yr TSY note is -1/32 at 94-03 yielding 3.331% while the Fannie Mae 4.5 MBS coupon is -2/32 at 102-00. S&P 500 futures are 2.00 points up at 1,255.25. The market was mixed yesterday amid light trading ― according to CNN, it was the lightest trading day of the year. Today should be more of the same unless the two data reports bring in unexpected news. Since Dec. 1, the S&P has climbed 6.52%. Commodity prices are also rising this morning with light crude oil trading 0.42% higher at $91.38 per barrel and gold prices 1.52% up...(read more)

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Bonds Recover After 2-Year Note Auction. Market in Autopilot Mode

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Posted To: MBS Commentary

There's low volume and there's low volume. Add in snowstorms, a lack of data, and a holiday environment....and volume was barely noticeable. What was noticeable was the somewhat mechanical structure that emerged on the charts by the end of the day though. Indicating either an expected "auto-pilot-mode" in the absence of personel, or algorythm types taking advantage of cheapness created by AM losses (just whiting for that profit to be booked) The chart below illustrates orderly technical movements within a trend channel followed by a rapid breakdown of that trend channel. But if we zoom out to a longer term perspective, we notice the broader trend channel being navigated today Net effect in MBS was a stable and moderately paced rally that took FNCL 4.5's just over 102-00 4.0's also touched their...(read more)

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Mortgage Crisis Growing

Short sales not being approved by the lenders are compounding the mortgage crises and we're certainly hoping the lenders begin to make some changes or else will soon suffer the fate of hundreds of lenders who have already imploded...http://bit.ly/fF3Zv9

Mortgage Rates Hold Steady. 4.875% Still Best Execution

Hot news from AZ Home Help:

Posted To: Mortgage Rate Watch

Although our directional guidance givers, benchmark Treasury yields, moved higher today, mortgage rates ended the session in a slightly lower position than yesterday. Unfortunately these modest improvements were not much help in lowering the best execution 30 year fixed mortgage rate. The best execution conventional 30-year fixed mortgage rate is still 4.875% and the best execution FHA 30 year fixed is still 4.75%. Important Mortgage Rate Disclaimer: Loan originators will only be able to offer these rates on agency conforming loan amounts to very well qualified borrowers who are have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based...(read more)

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Private Mortgage Insurance Tax Deductions Extended; ARM Disclosures Updated; Calyx Bundles LOS Services; Wells Comments on Compensation

Hot news from AZ Home Help:

Posted To: Pipeline Press

Rates are still decent, and ARM loans don't immediately jump to mind in this kind of environment for loan agents when a borrower saunters through the door. (In fact, ARM loans have accounted for about 5% of production in recent months.) The Federal Reserve, however, approved an interim rule that will require mortgage lenders to disclose examples of how a mortgage loan's interest rate and monthly payment may change . The Fed has given us plenty of lead time: beginning on October 1, 2011 , banks and lenders must alert borrowers to the risk of payment increases before they agree to take out mortgage loans with variable rates or terms, otherwise known as adjustable-rate mortgages. "They will be required to include a payment summary in the form of a table, including the initial rate, maximum rate...(read more)

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Home prices slashed again!

Home prices were slashed again, it's like we're Walmart & just rolling back prices all over the country...short sales approvals aren't moving fast enough and the prices of homes for sale just keeps dropping...http://bit.ly/gUMbg7

Federal Reserve Tweaks ARM & Construction Loan Disclosure Regs

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Posted To: MND NewsWire

The Federal Reserve has issued an interim rule containing modifications to the September 2010 interim rule which implemented changes in the Truth in Lending Act (TILA) and Regulation Z. This interim rule revises the Board’s interim rule published on September 24, 2010, which implemented certain requirements of the Mortgage Disclosure Improvement Act of 2008. The September 2010 interim rule requires creditors who extend consumer credit secured by real property or a dwelling to disclose summary information about interest rates and payment changes in a tabular format. The Board is issuing this interim rule to clarify certain provisions of the September 2010 interim rule. The September Interim Rules require lenders to provide disclosures in tabular form of the contract interest rate and corresponding...(read more)

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New Home Sales Up 5.5% in November. Median Prices Improve

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Posted To: MND NewsWire

The U.S. Census Bureau and the Department of Housing and Urban Development have jointly released NEW RESIDENTIAL SALES for November 2010. The survey is primarily based on a sample of houses selected from building permits. Since a "sale" is defined as a deposit taken or sales agreement signed, this can occur prior to a permit being issued. Changes in sales price data reflect changes in the distribution of houses by region, size, etc., as well as changes in the prices of houses with identical characteristics. It takes four months to establish a trend of new home purchases. New Home Sales rose to an annualized rate of 290,000. This is better than the previous month (275,000) but a bit short of the consensus of 300,000. Still... Not outside a reasonable deviation. Geographical discrepancies were...(read more)

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Excessive Housing Inventory at 11 months supply

There is an excess of housing inventory across the US as there are more homes for sale than are actually selling.  The current inventory sits at about 3.86 million homes which equates to about an 11 month supply.  http://bit.ly/fkbRda

Bond Market Prepares for Debt Supply. Bargain Hunters Await NFP Revisions

Hot news from AZ Home Help:

Posted To: MBS Commentary

Blah blah blah rates higher blah blah blah outside the range blah blah blah Treasury supply blah blah blah tactical considerations blah blah blah holiday distractions blah blah blah low volume blah blah blah exaggerated price action blah blah blah lack of strategic bargain buyers blah blah blah waiting for January 7, 2011 blah blah blah. Plain and Simple: benchmark 10s have crept outside the confines of the recent trading range. This is playing out ahead of Treasury auctions next week and is seen as a tactical ploy to profit from the day trading sentiment of a holiday distracted marketplace where low volumes tend to distort reality and create chopatility. We have noticed a clear lack of demand from strategic bargain buyers who appear to be waiting for confirmation that the November Employment...(read more)

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FHFA Reports on Enterprise Foreclosure Prevention Activity

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Posted To: MND NewsWire

The Federal Housing Financing agency reported there have now been over a quarter million permanent mortgage loan modifications for Freddie Mac and Fannie Mae mortgages arranged under the Home Affordable Modification Program. While it was substantially below the 88,600 permanent modifications achieved during Quarter II, 35,400 trial modifications were converted to permanent status in the third quarter, bringing the total to 260,000 over the 18 months since the program began. FHFA's Third Quarter 2010 Foreclosure Prevention and Refinance Report issued on Monday includes information on all of the foreclosure prevention efforts undertaken by the two government sponsored enterprises (Enterprises) Freddie Mac and Fannie Mae, including HAMP, the Home Affordable Refinance Program (HARP,) and other...(read more)

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Shadow Inventory - What is it and why is it important?

Shadow Inventory is the number of homes that are bank owned or are on the verge of being bank owned properties but aren't currently listed as homes for sale.

This number does not include short sales but the total estimated number of shadow inventory is staggering -- approximately seven million...http://bit.ly/gyb0Zv

MBS Touch Lows of Day. Benchmarks Test Support. Watching for Breakout

Hot news from AZ Home Help:

Posted To: MBS Commentary

Let us have no illusions about the market on this holiday-shortened week. As expected, trading conditions are becoming progressively thinner and volume progressively lower. The Fed is done buying for the week, and next week brings the task of taking down another round of 2, 5, and 7 year auctions. Given that low level of participation, it does not strain credulity to think that rates are under a bit of pressure to to back up into an ideal tactical position from which to strike at next week's auctions. Or maybe instead of saying "under a bit of pressure to back up" we should say "not getting much support from sidelined buyers". Real$ bid wanted. It's really that simple. There's not much driving the markets, and whatever movements we do see are not representative enough of broader biases for...(read more)

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Moderate Morning MBS Losses Turn Into Healthy Afternoon Gains

Hot news from AZ Home Help:

Posted To: MBS Commentary

Another data-less day has passed and we've seen another day of chopatility led by technical inflection levels surrounding the Fed's open market operations. Yesterday it was "morning session good, PM session bad," and today it was "morning session bad, PM session good". MBS and Treasuries alike languished until 2pm. But the downtick was fairly measured and well contained by technical support, although things did get choppier as the afternoon pre-POMO (2nd operation of the day) trade coincided with lighter and lighter volumes. Here is a recap of 5pm marks... For mortgages, the end result was a Fannie 4.0 that gained half a point trough to peak and closed at the highs, better than mid-range versus yesterday's prices. Those FN 4.0s sure do love a bull flattener into decling vol! Treasuries did...(read more)

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Bond Market Makes Directional Move After Fed POMO. Reprices Possible

Hot news from AZ Home Help:

Posted To: MBS Commentary

As has been the case since liquidity began to dry up in earnest two weeks ago...the bond market has made a directional move after the Fed completed their latest QEII open market operation . Profit takers and short sellers are making their presence known following the Fed's latest POMO in the long end of the yield curve. Flows have gone negative in a hurry and the 2s.10s curve has steepened aggressively. Again, trading volumes are very low and this behavior is exaggerated by a lack of liquidity, unfortunately that offers little concession to lenders. Rate sheet influential MBS prices are falling...and fast. The benchmark 10 year TSY note yield is now -9/32 at 93-24 yielding 3.373%. This is almost 8bps above the morning yield lows, most of which hit screens in one sharp spike over the past few...(read more)

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