Mortgage Rates Modestly Lower as Risks Increase

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Posted To: Mortgage Rate Watch

Mortgage rates had their 2nd straight day of improvements today--something that's been uncommon since the beginning of May. Additionally, the slight drop in rates was belied by the market movement. The bond markets that inform lenders rate sheets actually pointed to higher rates by the end of the day. That means the improvements were more to do with the overhang from yesterday's strength. In other words, yesterday's underlying market conditions were so strong, and so abrupt, that lenders couldn't fully price them into rate sheets. That left some additional room to lower rates today despite the counter-arguments being made in bond markets. The most prevalently-quoted conventional 30yr fixed rate for top tier scenarios remains at 4.125%. A few lenders are on either side of that by an eighth of...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/483599.aspx

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Pending Home Sales Hit 9-Year Highs

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Posted To: MND NewsWire

Pending home sales hit their highest level in over nine years in May, indicating that the strong existing and new home sales announced last week are likely to be repeated again for June and maybe even July activity. The National Association of Realtors® (NAR) said that its Pending Home Sales Index (PHSI) rose 0.9 percent from April's level of 11.6 to 112.6 in May. The report came in ahead of one survey's expectations of a 0.6 percent increase, but behind the Reuters poll of 1.2 percent. The rise in the PHSI put it 10.4 percent higher than in May 2014 and marked its ninth straight year-over-year gain. It is now at its highest point since April 2006 when it hit 113.7. It was also the fifth straight month-over-month increase and NAR's chief economist Lawrence Yun said this increases the likelihood...(read more)

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Source: http://www.mortgagenewsdaily.com/06292015_pending_home_sales.asp

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Mortgage Rates Erase One Day of Losses. More Volatility Ahead

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Posted To: Mortgage Rate Watch

Mortgage rates spiked to the highest levels of the year on Friday after hovering close to them for several days. But news out of Europe over the weekend caused major movement in financial markets at the start of the day. One of the biggest beneficiaries was the US bond market where Treasuries yields and mortgage rates fell appreciably. Interestingly enough, today's appreciable improvement perfectly counteracted Friday's appreciable weakness, leaving the average lender right in line with Thursday's latest rate sheet offerings. This brings the most prevalently-quoted conventional 30yr fixed rate back to 4.125% for top tier scenarios, though a few lenders are .125% higher or lower. Coming into this week, we knew it would be volatile, and the volatility likely isn't over . Any time there is a such...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/483239.aspx

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FHLB & Warehouse Lines; U.S. Rates Drop; CFPB to Audit Executive Pay

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Posted To: Pipeline Press

I doubt the average U.S. household is sitting around worrying about interest rates. It's probably more like earthquake preparedness than anything; California residents have been told the "big one" is coming for dozens of years, that it's a statistical certainty in the long run. However, I believe very few homes in that state have anything more than a box with a few expired soup cans in it as a survival stash. In a similar vein Wells Fargo asks the question, Are Households Prepared for Higher Interest Rates? By "prepared," in essence, they ask the question whether or not home owners have over-leveraged themselves into sensitivity. "Healthy household balance sheets, critical to growth in consumer spending, should be poised to absorb rate increases due to stronger underlying fundamentals and a...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06292015-cfpb-executive-pay.aspx

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Jumbo & State news; Disparate Impact Ruling Clears Things Up, Kind of; New UDAAP?

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Posted To: Pipeline Press

Yesterday the Supreme Court weighed in on disparate impact in what was viewed as a win for housing advocates & the CFPB and a setback for the banking industry. The Court upheld the use of "disparate impact" in a Texas case alleging housing-related discrimination. Remember that disparate impact says lenders and other defendants can be found liable for racial discrimination even if it was unintended, is recognized under the Fair Housing Act. Many CEOs and lenders say that disparate impact unfairly victimizes financial institutions that are not aware that their credit policies may have a disproportionate effect on minority neighborhoods. Groups on both sides are figuring what it means, and how it will be applied. Certainly no lender wants it to turn into a UDAAP situation - viewed as a catch...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06262015-disparate-impact.aspx

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National Banks Report Improving Loan Performance

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Posted To: MND NewsWire

Another measure of returning normalcy came on Thursday with a report from the Office of Comptroller of the Currency (OCC) on mortgage loan performance. The regulator said that 94.2 percent of the first mortgages serviced by eight large national banks it regulates were current and performing in the first quarter of 2015. This is an increase from 93.1 percent in the first quarter of 2014. The mortgages in this portfolio comprise 43.9 percent of all residential mortgages outstanding in the United States-22.7 million loans totaling $3.8 trillion in principal balances. Loans in early stage delinquency - 30 to 59 days past due - represented 1.9 percent of the total, a 7 percent decrease from a year earlier. There was a more substantial year-over-year improvement in the percentage of loans that were...(read more)

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Source: http://www.mortgagenewsdaily.com/06262015_occ_loan_performance.asp

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MBS RECAP: Bond Markets Brace for Impact; US Worse Than Europe

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Posted To: MBS Commentary

Paradoxically, US bond markets sold off (read: rates went higher) much more sharply than European bond markets today. That will certainly make no sense to everyone who is blaming every move on Greece-related headlines. If it was all about Greece , we'd see German yields taking the biggest hit when the Greek outlook improves because German debt has been the biggest safe-haven hedge against Greece-related risk. It's all so much to keep track of! Suffice it to say that the big picture continues to be more of a factor than the near-term brushstrokes. Greece is a near-term brush stroke no matter how much media attention it gets or how much it looks like Greek headlines are driving markets. When we look back at today's trading, we see a fairly linear effort to move toward higher yields...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/482827.aspx

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Mortgage Rates Hit New 2015 Highs

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Posted To: Mortgage Rate Watch

Mortgage rates were already hovering near 2015 highs as of yesterday. Today's spike sent them easily above the previous annual high , set on June 10th. Normally, day to day market movement isn't big enough to cause a change in the actual contract rates being quoted. In other words, it's usually the upfront costs (or rebate) that's changing for any given rate. Today's movement was enough to make a new contract rate more prevalent when it comes to conventional 30yr fixed loans for top tier scenarios. While there still are plenty of quotes going out for lower rates, 4.25% now takes over as the most common. But wait... Didn't Freddie Mac just yesterday announce it's weekly rate survey showing 4.02%?! Indeed they did, and there's no reason to doubt the long term accuracy of those numbers, but there...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/482830.aspx

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Increasing Mortgage Debt will need a Home

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Posted To: MND NewsWire

Even as homeownership rates remain at historic lows the mortgage debt on single family homes is increasing, ending seven years of decline. Freddie Mac's Office of Chief Economist, in its June U.S. Economic and Housing Market Outlook , looked at how, as the housing market is "pivoting toward normalcy," this new debt will be managed; "who will hold it, at what price, and in what form?" The report says it is tempting to think that the improving outlook for the economy and jobs will mean an increase in homeownership but the economists say "housing demand is unlikely to trump demographics for several years." While new households are forming they are also tending to rent and that patterns is likely to continue for several years. The declining mortgage debt outstanding (MDO) and low interest rates...(read more)

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Source: http://www.mortgagenewsdaily.com/06242015_freddie_mac_outlook.asp

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Rates Continue Hovering Near 2015 Highs

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Posted To: Mortgage Rate Watch

Mortgage rates remained near recent highs for a 2nd straight day after rising quickly on the first two days of the week. With the exception of only one other day, the past 3 days have been worst of 2015. Lenders continue quoting conventional 30yr fixed rates of 4.125% on top tier scenarios. On a positive note, today's market movement suggested more weakness than we actually saw on rate sheets. That said, yesterday was the opposite. The conclusion is that lenders are defensive and are leaving themselves a cushion on rate sheets to absorb the volatility and weakness that has quickly become the rule vs the exception. The scary thing is that the past 3 days have actually been very well contained in terms of market movement. Historically, that's not the kind of thing you want to see when rates are...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/482514.aspx

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Millennials - Rent, Jobs, & Diversity; Yes, Free DU, But There Are Compliance Tangles

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Posted To: Pipeline Press

Free DU? You bet - Fannie couldn't let Freddie offer LP at no charge and not respond. "Beginning June 1, Fannie Mae will align DU and Desktop Originator (DO) to the no-fee approach allowing more lenders and loan originators to access the value of DU and DO in their underwriting processes... press release . But the herd is spooked. The June DU bills won't reflect this change, obviously, and should be paid to Fannie just like always. July's will reflect the change - but what about DU fees on loans prior to the announcement where the borrower paid for it? Is it a "changed circumstance" with unintended consequences? It sure would have been easier to set the change date in the future. Under RESPA, underwriting fees are a zero tolerance item - do lenders break out the DU fee or not? Lenders have...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06242015-price-of-du.aspx

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Mortgage Rates Sideways Despite Market Improvements

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Posted To: Mortgage Rate Watch

Mortgage rates barely budged in most cases today. Some lenders were just slightly better. Others were worse. The average rate quote is unchanged vs yesterday with most lenders still offering conventional 30yr fixed rates of 4.125% on top tier scenarios. The lack of movement on rate sheets belies the fact that underlying market conditions improved . Specifically, MBS Prices (the mortgage-backed-securities that most directly affect the rates lenders can offer) were higher. This typically corresponds to lenders offering lower rates. In fairness, several lenders did adjust rates lower in the middle of the day as markets improved, but that merely brought the average lender back to unchanged levels. This is part of the phenomenon discussed in yesterday's headline where mortgage rates have taken the...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/482165.aspx

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MBS RECAP: Negative Long-Term Trend Continues

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Posted To: MBS Commentary

Bond markets continued pushing back toward recent long-term high yields today, and without any overt motivation. The overnight session saw European bonds paradoxically move lower in yield despite stronger economic data and generally positive Greece-related headlines. That's the sort of paradox we can live with, but Treasuries weren't buying it (literally). 10yr yields did allow themselves a bit of a rally with Europe, but a 6bp gain in German 10yrs was only good for a 3bp gain in US 10's. After Germany bounced, so did Treasuries. US markets then took over as the pacesetter for the day. The morning economic data was twice shunned . First up, weaker Durable Goods provided no benefit for the selling momentum. Then stronger New Home Sales data did no damage when bond markets were recovering...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/481798.aspx

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Mortgage Rates Caught in 'Elevator Up, Stairs Down' Cycle

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Posted To: Mortgage Rate Watch

Mortgage rates , true to recent form, can't catch a break . Just when we think we might be seeing a glimmer of hope, we're treated to several days of painfully higher rates. Of course, all of this is playing out over a fairly narrow range. Indeed, today's movement is better measured in closing costs as opposed to actual contract rates. Lenders continue quoting conventional 30yr fixed rates of 4.125% for top tier scenarios, but today's closing costs would be higher than yesterday's. Some lenders moved back up to 4.25% today. Despite the narrow range and the fact that "low 4's" are historically low rates, consumers seeking mortgages are not amused . Even when the only day-over-day change is in closing costs, a move like today's can mean that a borrower seeking a $300k loan is now looking at another...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/481750.aspx

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MBS Day Ahead: The Big Risk

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Posted To: MBS Commentary

When I think back to 2012--the last time that global financial markets were battling back from European systemic risk drama--I remember feeling less anxious about the whole thing because our own Fed had not yet broached the subject of pulling back on asset purchases or accommodative policy. Just when it looked like Treasuries had perhaps put in their all time low yields after July, the Fed announced QE3 in September, ushering in the lowest-ever mortgage rates. Some chilling realities remain from 2012 though--at least for the US. With 10yr yields bouncing in the 1.6's this year vs 1.3's back then, we've put in a long term 'higher low.' The big risk has been and continues to be that we've turned the long term corner and will continue to put in long term higher lows. Compounding...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/481550.aspx

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Mortgage Rates Spike, Erasing 4 Days of Gains

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Posted To: Mortgage Rate Watch

Mortgage rates had been walking a slow, steady path of improvement since hitting 8 month highs on June 10th. From then on, there were only 2 days where rates did NOT improve. As of last Friday, the average conventional 30yr fixed rate quote for top tier scenarios was as close to 4% as it has been since the beginning of the month. Today's spike brings the average solidly back in favor of 4.125%. There are several ways to view and understand this weakness. First of all, 2015 is simply a more volatile time for interest rates, and that's not expected to change any time soon. More specifically, Friday marked 3-week lows. That's a pretty good run for a high-volatility environment that's mainly seen rising rates for 2 months, and it's the reason I noted on Friday that rates were still technically...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/481485.aspx

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Home Buying Season in Full Swing -Ellie Mae

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Posted To: MND NewsWire

Ellie Mae said on Thursday that its latest Origination Insight Report "Reflects a home buying season in full swing ." The May data shows purchase volume taking a 58 percent share of all mortgage originations, up from 52 percent in April. The report noted that the average 30-year rate on all closed loans fell slightly for the first time since February, from 4.062% to 4.013%. Jonathan Corr, president and CEO of Ellie Mae said that the May share of purchase mortgages did fall below the 66 percent share in May 2014 because the lower mortgage rates last month gave some help to refinancing volumes and share. The FHA share of loan originations in May was unchanged from April at 24 percent while Conventional originations dipped by 1 percentage point and VA originations increased by that same amount...(read more)

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Source: http://www.mortgagenewsdaily.com/06182015_ellie_mae_loan_metrics.asp

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MBS MID-DAY: Bonds Looking for Support After Modestly Weaker Morning

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Posted To: MBS Commentary

Following yesterday's FOMC events, bond markets rallied back in line with recent low yields. With the rally taking place in the afternoon, Asian and Europe markets didn't get their chance to react until this morning. The initial reaction was positive, with bonds following through to the best levels since early June, but after 10yr yields hit 2.26, they were unwilling to go any lower. By the time they'd bounced there a 3rd time, there was a clear case for technical resistance. European bond markets bounced at the same time, and at a similar inflection point relative to their recent range. In other words, the trading levels that had acted as a general ceiling for rates in May have now been acting more like a floor in June. There's no specific yield to watch when we're talking...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/480765.aspx

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MBS Day Ahead: Absence of Data Leaves Bonds to Consider Their Fate

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Posted To: MBS Commentary

Good old 2015. January was quite nice for fans of low rates. The hotly anticipated ruling from the European Court of Justice on QE was about to be handed down and tradeflows were already benefiting from new position-taking in the new year. Phrased another way, Treasuries had been more resistant to European influences into the end of 2014 and rushed to catch up as 2015 began. This meant that US rates fell at an aggressive pace heading into February. Treasuries led the first attempt to bounce in 2015 following January's jobs data (released at the beginning of February), but European bond markets held steady. QE buying hadn't even started yet, after all. When it did, there was an unexpected rush of liquidity and an unexpectedly lopsided buyer-to-seller ratio in European government bonds...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/480993.aspx

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Safest Places to Live; Note from Dave Stevens on the Current State of the Biz

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Posted To: Pipeline Press

The Census Bureau reports that as of Q1, the percentage of Americans who own their homes fell to the lowest level in 20Ys (to 63.8%). Tighter lending requirements, prior foreclosures and other factors are likely reasons for the decline. In a similar vein, and yet another ranking I didn't do well in, WalletHub conducted an in-depth analysis on the safest states to live in for 2015 by analyzing data to include the number of assaults per 100,000 residents, the number of fatal occupational injuries per 100,000 employees and the percentage of the population lacking health insurance. Massachusetts ranked the safest state to live in followed by Vermont, Minnesota, New Hampshire and Hawaii. Mississippi was the least safe state to live in, followed by South Carolina, Oklahoma, Tennessee and New Mexico...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06192015-safest-places-to-live.aspx

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Mortgage Rates Near June Lows

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Posted To: Mortgage Rate Watch

Mortgage rates took a few more steps in the right direction today and have now made it back to levels not seen since the beginning of June. Only the first 2 days of the month were any better. That said, the month began with a quick jump to the highest rates in more than 8 months, and they've only been falling gradually since then. Today's improvement was a bit bigger than some recent examples. In many cases, the more aggressive lenders are back to quoting conventional 30yr fixed rates of 4.0% on top tier scenarios, though 4.125% is still slightly more prevalent. It's never a bad idea to lock in gains when rates are near 3-week lows after hitting long term highs. It will always be the case that rates could continue lower. To be fair, they are showing more resilience in this move back from June...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/481158.aspx

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Mortgage Rates Still in Holding Pattern After Fed

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Posted To: Mortgage Rate Watch

Mortgage rates had a far calmer day compared to yesterday's volatility. Morning hours brought stronger economic data. While this did put some pressure on the bond markets that underlie mortgage rate movement, it wasn't enough for most lenders to recall their first rate sheets of the day. After European markets closed, US markets improved enough in the afternoon to prevent any further risk of mid-day reprices from lenders. The most prevalently-quoted conventional 30yr fixed rate for top tier scenarios is still 4.125% but some of the more aggressive lenders are back to 4.0%. While it's nice not to be moving any higher in rate, it would be nicer to see a stronger push toward lower rates in the wake of yesterday's Fed announcement. The lack of progress suggests we should continue to be cautious...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/480911.aspx

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TRID Implementation Delayed; MBA's Stevens Comments

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Posted To: MND NewsWire

Implementation of the Know Before You Owe mortgage disclosure rule has been delayed until October 1 . The rule was originally supposed to be implemented on August 1 although the Consumer Financial Protection Bureau had recently announced that enforcement of the rule and use of the associated TRID disclosure forms would not begin until January 1, 2016 . In announcing the decision to delay CFPB Director Richard Cordray said, "We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will...(read more)

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Source: http://www.mortgagenewsdaily.com/06182015_cfpb_trid.asp

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Mortgage Rates Modestly Lower After Fed-Induced Volatility

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Posted To: Mortgage Rate Watch

Mortgage rates had a wild ride today. Underlying bond markets were significantly weaker leading up to the afternoon's Fed events. During this time, many lenders sent out reprices with higher rates compared to yesterday's latest. After the Fed Announcement was released (along with the updated forecasts from Fed members on where they saw rates over time), bond markets bounced back in a big way. At that point, lenders began repricing in the other direction, ultimately bringing average rates below yesterday's latest levels. By the end of the day, several lenders were quoting 4.0% on top tier conventional 30yr fixed scenarios for the first time since June 4th. That said, the average lender remains at 4.125%, but with lower closing costs than yesterday. The big question is whether this afternoon...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/480563.aspx

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Refi Apps at 5-Month Lows

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Posted To: MND NewsWire

Interest rates increased to the highest levels since last fall and the volume of mortgage applications responded as might be expected, falling across the board. The Mortgage Bankers Association (MBA) said its Market Composite Index dropped 5.5 percent on a seasonally adjusted basis during the week ended June 12 and was down 6 percent unadjusted. Refinancing also decreased from the week before. Its index fell 7 percent and the share of all applications that were for refinancing went down to 48.5 percent from 49 percent. The seasonally adjusted Purchase Index decreased 4 percent and the unadjusted Purchase Index 6 percent compared with the previous week. The unadjusted Purchase Index was 15 percent higher than the same week one year ago. Refinance Index vs 30 Yr Fixed Purchase Index vs 30 Yr...(read more)

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Source: http://www.mortgagenewsdaily.com/06172015_application_volume.asp

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MBS RECAP: Bond Markets Not Making for Easy Pre-Fed Strategy Decisions

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Posted To: MBS Commentary

Nice rally today. 10yr yields hit their lowest levels since June 5th and MBS hit their 'roll-adjusted' highs over the same time frame. Gains were in place from the start of the overnight session, and mid-morning weakness can retrospectively be blamed on Europe . After Europe closed, the rally resumed and we're heading out at the best levels here at the end of the session. There are some caveats though. First of all, it was a low-volume, low-liquidity day. This exaggerates the movement in bond markets. Light volume accomplishes this by creating an environment where an average-sized trade represents a bigger piece of the day's total action. Low liquidity accomplishes this because it forces traders to " take what they can get " in cases where there aren't enough counterparties...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/480259.aspx

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Builder Confidence Surges; Buyers "Serious and Committed"

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Posted To: MND NewsWire

Builder's demonstrated the highest confidence in the market for newly built homes in nearly a year this month as the Housing Market Index (HMI) published by the National Association of Home Builders and Wells Fargo Bank sprung to a five point gain. Two of the HMI's component indices reached the highest levels in nearly a decade . The HMI rose to 59, the highest reading since September 2014 in June as builders, according to NAHB Chairman Tom Woods, reported "more serious and committed buyers at their job sites." This is reflected, Woods said "in recent government data showing that new-home sales and single-family construction are gaining momentum." "The HMI indices measuring current and future sales expectations are at their highest levels since the last quarter of 2005, indicating a growing...(read more)

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Source: http://www.mortgagenewsdaily.com/06152015_nahb_builder_confidence.asp

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Mortgage Rates Little-Changed With Fed Looming

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Posted To: Mortgage Rate Watch

The Fed doesn't set mortgage rates , but changes in Fed policy are more than capable of sending shockwaves through the markets that affect mortgage rates. In all but rare cases, easy monetary policy is good for rates and constrictive policy is bad. There are notable exceptions, but this economic cycle isn't likely to be one of them. That means the a Fed rate hike (or the expectation for a Fed rate hike) will have (or have had) a negative effect on rates (i.e. pushing them higher). The notion of expectations is important though. Markets do their best to already be adjusted to anything that is likely to happen. For instance, if market participants know that strange weather in Florida is damaging the orange crop in general, commodities traders might trade the price higher preemptively (because...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/479988.aspx

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MBS Day Ahead: Built Up To Be Let Down?

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Posted To: MBS Commentary

Yesterday was great! While we could poke holes in motivation for such a big rally by pointing out that it began from the weakest levels in 8 months, among other things, it was still the biggest and best move we've seen since March 18th. To be sure, we will poke some holes, but let's focus on another positive or two, for a moment. The rally completely defied the economic data. Retail Sales and Import/Export data both suggested bond market weakness. Yet we saw only a brief feint higher in yields before improving convincingly. There was an utter absence of any tense moments from there on out. This is VERY out of character for bond markets recently. Even during the moments where we're not taking our lumps, there have still been questionable moments that have increased reprice risk....(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/479370.aspx

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Non-QM Exec Vacates; Legal Explanation of the Importance of Vendor Management

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Posted To: Pipeline Press

Every once in a while someone will ask me about mortgage origination numbers, like does anyone count the number of loans made? Sure - read through the HMDA data - it is a great opportunity to plunge into the data. This from BuckleySandler LLP. Elizabeth McGinn is a partner and Moorari Shah is a counsel in the Washington, DC and LA offices of BuckleySandler LLP. They advise clients on consumer financial services, e-commerce, vendor management and privacy-related issues. MORTGAGE INDUSTRY CONTINUES TO BEAR BRUNT OF CFPB REGULATORY BURDENS In recent years, mortgage industry players have had to quickly adapt to the evolving regulatory environment. The latest scramble for mortgage lenders includes the downstream effects of pending rule changes related to disclosures required in implementing regulations...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06122015-vendor-management.aspx

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MBS MID-DAY: Negative Turn After European Close

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Posted To: MBS Commentary

Bond markets began the day in weaker territory , following a pull-back in European bond markets overnight. The tenor would soon change as the the rush of liquidity at the 930am NYSE open resulted in a full reversal in Europe. Bund yields led the way lower for Treasuries, with each picking up the last vestiges of short-covering for the week (buying from traders who had previously sold bonds short). After Europe closed, US markets were left to their own devices. Treasuries and MBS have been drifting slightly weaker ever since. So to recap: US rates followed EU rates higher, then nicely lower. Then when EU rates closed, US rates returned to equilibrium. It's really that simple . The only catch is that MBS are underperforming Treasuries to some extent due to volatility and inherently shorter...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/479505.aspx

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Negative Equity Worst at Low End, Jamming 'Housing Conveyor Belt"

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Posted To: MND NewsWire

The plight of underwater homeowners is proving to be pesky to resolve if Zillow's latest numbers on negative equity are correct. The company said today that while homeowners with a larger mortgage balance than their homes were worth dropped from 16.9 percent in the fourth quarter of 2014 to 15.4 percent in the first quarter of this year, slowing home value growth means that many could be "trapped in their mortgages for years to come." Of the estimated 7.9 million homeowners who were underwater in the quarter, Zillow says about 4 million owed their lenders 20 percent or more than the market value of their homes. This means it could be several years before those homes appreciate to a point that their owners could hope to break even on a sale. At the peak of the real estate crisis more than 15...(read more)

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Source: http://www.mortgagenewsdaily.com/06122015_negative_equity.asp

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MBS RECAP: US Rates Not Interested Without Europe; Widespread Negative Reprices

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Posted To: MBS Commentary

Due to the timing of today's weakness and the necessity of a few alerts on MBS Live , the mid-day commentary was out later than normal. By the time I wrote it, enough of the day's events had transpired for us to get a sense of what was going on, so there's not much left to discuss. If you didn't catch it, here it is . One thing we could add to that discussion would be to point out when European markets closed, so we can more easily observe the shift in momentum . Next week brings the big FOMC Announcement (with press conference and forecasts). Between that and whatever European can muster, we should have enough info to know if recent highs will hold. The Fed isn't expected to hike rates at this meeting, but it will be Yellen's last press conference before the meeting...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/479551.aspx

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Mortgage Rates Remain Near 2015 Highs as Fed Approaches

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Posted To: Mortgage Rate Watch

Mortgage rates looked like they might come down a bit today. The morning hours were generally positive for bond markets, including mortgage-backed-securities (MBS) which lenders use to set rate sheet levels. Indeed most rate sheets were slightly better than yesterday's and several lenders lowered rates mid-morning. But when European markets closed, US market momentum shifted and the gains evaporated . Lenders sent out mid-day revisions, raising rates back in line with yesterday's levels. The average conventional 30yr fixed rate quote remains in a range between 4.125% and 4.25% , depending on the scenario. More aggressive lenders are quoting lower rates, but those are the exception at the moment. In the context of 2015's market movement, it's no surprise to see Europe having a big effect on...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/479570.aspx

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Mortgage Rates Surge Lower From 8 Month Highs

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Posted To: Mortgage Rate Watch

Mortgage rates were at their highest levels since early October as of yesterday afternoon, and in general, have been in the throes of the most aggressive move higher since the 2013 taper tantrum. Much of the motivation has come from European markets. There is a domino effect, of sorts, leading from extremely large moves in Europe that ends up visibly affecting mortgage rates in the US. As such, it's no surprise to see that benchmark interest rates in Europe were at their long-term highs yesterday as well. It's also no surprise that when the pendulum swung the other way in Europe this morning, US interest rates were able to come along for the ride. As is always the case when Europe is leading a market movement, US rates get a lesser version of the improvements. Fortunately, today was so big...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/479189.aspx

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MBS RECAP: Widespread Positive Reprices as Speculators Get Flushed

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Posted To: MBS Commentary

Given the pace and scope of recent bond market weakness, there are more than a few traders that have open bets on rates moving higher--aka "shorts." This isn't always as simple as a bet on rates in general, but can also come in the form of bets as to the shape of the yield curve. In other words, will 10yr yields get closer or farther away from 2yr yields? Will 30's get closer or farther from 5's, and so on... At a certain point, these bets will be covered if the market moves far enough in the other direction. In other words, if I'm betting on higher rates (aka "selling short") and rates fall a certain amount from their most recent high, I will cover (aka "short-covering") my position by buying. That's exactly what happened in German Bunds during...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/479190.aspx

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Third California Lender Fined for LOC Violations

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Posted To: MND NewsWire

For the third time this month a mortgage company, this one in the process of dissolution , has been charged with violating the Loan Originator Compensation (LOC) Rule. The Consumer Financial Protection Bureau (CFPB) said it has ordered Guarantee Mortgage Corporation, a California Mortgage Bank, to pay a civil penalty of $228,000 for its alleged infractions. According to CFPB, the company, which operated 10 branches in the San Francisco Bay Area, paid loan originators in part based on the interest rates of loans they originated. Branch managers, and in some cases loan originators set up marketing services entities into which Guarantee made compensation payments. According to the consent order the fees were based on the profitability of the associated branch and on the interest rates charged...(read more)

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Source: http://www.mortgagenewsdaily.com/06102015_cfpb_enforcement.asp

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Mortgage Rates Still Pushing 2015 Highs

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Posted To: Mortgage Rate Watch

Mortgage rates continued pressing into new highs for 2015. Most lenders are now quoting conventional 30yr fixed rates 4.25% on top tier scenarios. While this was already the case for many lenders yesterday, today's losses would then be seen in the form of higher closing costs. In terms of the "effective rate" (which factors in the associated upfront costs), today's rate sheets most closely resemble those seen in early October 2014. As for reasons, things remain frustratingly opaque if you're looking for short term cause and effect. The problem we're dealing with is exceptionally broad and long-lasting. Thankfully it's not too complex. Investors gorged on European bonds throughout 2014 and early 2015, bringing rates to all-time lows and causing other rates markets (like ours) to experience some...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/478763.aspx

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Despite Improvements, Foreclosures Still Double Pre-Crisis Pace

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Posted To: MND NewsWire

It continues to be clear that the foreclosure crisis is winding down while ongoing elevated levels of mortgage distress mean it could be a long time before it actually ends. CoreLogic's April 2015 National Foreclosure Report shows dramatic year-over-year declines in both delinquencies and completed foreclosures and a foreclosure inventory that has shrunk to less than a third of its peak level. It also shows these statistics remain at levels far above historic "norms." The company said that there were 40,000 completed foreclosures nationwide in April compared to 50,000 in April 2014, a decline of 19.8 percent year-over-year and down 65.8 percent from the foreclosure peak in September 2010. The rate of completed foreclosures in April was nearly identical to the previous month. Both were reported...(read more)

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Source: http://www.mortgagenewsdaily.com/06092015_corelogic_foreclosures.asp

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Mortgage Rates Right Back to 2015 Highs

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Posted To: Mortgage Rate Watch

Mortgage rates bounced back up to the highest levels of 2015 today. Yet again, it was a frustrating and seemingly serendipitous move, unable to be blamed on any particular event or data. Markets and market-watchers don't like this because it makes it hard to know when and why the next big move will happen. Even so, the phenomenon has been a fairly constant companion in the past 2 months as investors consider the possibility that global interest rates bottomed out in April. With a big-picture consideration like that, trading in bond markets has become less about reacting to "normal stuff." Instead, investors are merely trying to make their way toward higher rates as quickly as possible just in case this move is "the big one." Where this stops, nobody knows . But as we've discussed since the...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/478399.aspx

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REO Sales Share Below One-Third of Peak

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Posted To: MND NewsWire

The percentage of total home sales coming from distressed inventories continues to drop. CoreLogic said on Monday that short sales and sales of owned real estate (REO) fell 3.2 percentage points from March 2014 to March 2015 and were down 1.9 percent from February to March. REO properties accounted for 8.4 percent of home sales in March and short sales made up 3.7 percent for a total distressed property share of 12.1 percent. CoreLogic said that March is typically a month in which distressed sales fall due to seasonal factors, but this March had the lowest share of any March since 2007. At the peak in January 2009 distressed sales totaled 32.4 percent of all sales and REO sales for 27.9 percent. The continuing decrease in REO sales has accounted in part for rising home prices since bank-owned...(read more)

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Source: http://www.mortgagenewsdaily.com/06082015_corelogic_distressed_sales.asp

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Mortgage Rates Fall Slightly from 2015 Highs

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Posted To: Mortgage Rate Watch

Mortgage rates were just slightly lower today, but only erased a small portion of Friday's move to 2015 highs. Friday notwithstanding, today's rates would be the highest since early November 2014. The average lender is still quoting conventional 30yr fixed rates of 4.125% on top tier scenarios. Mortgage rates are closely connected to movements in the bond market, and global bond markets have been a scary place lately. At the center of the fear is the prospect that European interest rates may have already turned a long term corner after bottoming out in April. While European rates don't directly affect US mortgage rates, there is a domino effect, of sorts, that keeps them generally moving in the same direction, by varying degrees. Today wasn't one of the days that saw a strong connection, but...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/478070.aspx

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Mortgage Rates Still Near 2015 Highs. Lots at Stake Tomorrow

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Posted To: Mortgage Rate Watch

Mortgage rates bounced back ever-so-slightly today, ultimately doing very little to erase the damage done so far this week. The most prevalently-quoted conventional 30yr fixed rate remains 4.125% for top tier scenarios. This marks the second day with contract rates at the highest level of the year with improvements from yesterday seen only in the form of modestly lower closing costs. Lenders primarily rely on the prices of mortgage-backed securities (MBS) in determining where to set rates. MBS are essentially bonds comprised of groups of similar loans. They trade during the day like any other financial instrument and today's prices would have suggested a better improvement than we saw. Even so, it's no surprise to see that discrepancy on a day like today. The first reason is volatility . In...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/477405.aspx

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Mortgage Rates Hit New 2015 Highs after Jobs Report

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Posted To: Mortgage Rate Watch

Mortgage rates are officially having a bad June. It's not quite as bad as February, but February began with rates very close to all-time lows, and served as more of a correction to a previously positive trend. June, on the other hand, follows 2 straight months of higher, more volatile rates. Without a shadow of a doubt, it's on pace to be the worst month we've seen in years. Of course that assumes the pace continues to follow the example set by the first 5 days, and that is highly unlikely. Still, if the month were to end right now, we'd have to go all the way back to June 2013 in the throes of the taper tantrum to find anything worse. And yet, rates are just barely up into the 4's. Quite a few lenders moved up to quoting 4.25% today for conventional 30yr fixed loans, but at least an equal...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/477667.aspx

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CFPB Fines Lender over Expense Accounts

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Posted To: MND NewsWire

For the second time this week the Consumer Financial Protection Bureau (CFPB) has filed in federal court against a lender for unfair compensation practices . Today's complaint was levied against RPM Mortgage, Inc. and its CEO, Erwin Robert Hirt, for illegally paying bonuses and higher commissions to loan originators to incentivize them to steer consumers into costlier mortgages. The complaint was accompanied by a proposed order asking the court to require RPM to pay $18 million in redress to consumers and a $1 million civil penalty, and compel an additional $1 million civil penalty payment from Hirt. RPM Mortgage , Inc. is a residential-mortgage lender headquartered in California and operating about sixty branches in six states. CFPB contends that, under a plan originated in April 2011, RPM...(read more)

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Source: http://www.mortgagenewsdaily.com/06042015_cfpb_enforcement.asp

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CFPB Targets LO Comp, Captive Insurance, and Reverse Mortgages; Upcoming Events

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Posted To: Pipeline Press

Huh? National Donut Day? Most donut shops have a few employees, but in 2013 our Census Bureau tells us there were 23 million businesses without paid employees , an increase of 4.4 million since 2003. Non-employer businesses included family-run businesses to home-based commentary writers. Florida had the largest increase in non-employer businesses, especially in the real estate and rental sectors. Nevada outpaced all states in the percentage increase in non-employer establishments, gaining 4.2 percent, with accommodation and food services leading all sectors. Los Angeles County added more non-employer businesses than any other county and Miami, Florida experienced the largest gain in the number of businesses than any other city. No one wants to hear, "Uh, Mr. Johnson, there's a Richard Cordray...(read more)

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Source: http://www.mortgagenewsdaily.com/channels/pipelinepress/06052015-cfpb-and-rpm.aspx

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Beware those Celebrity Studded Reverse Mortgage Ads - CFPB

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Posted To: MND NewsWire

Older Americans are being warned that ads touting reverse mortgages "that seem too good to be true" might be just that. Rather slyly using a tag line from one popular reverse mortgage advertisement, the Consumer Financial Protection Bureau (CFPB) has released results of a focus group study that found many participants were left with misimpressions about the product after viewing ads; perhaps that they are not a loan, are a government benefit, or would ensure they could stay in their homes the rest of their lives. CFPB Director Richard Cordray, in a conference call with reporters regarding the study said, "As older consumers consider reverse mortgage loans to tap into their home equity, they need to be careful of those late night TV ads that seem too good to be true. It is important that advertisements...(read more)

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Source: http://www.mortgagenewsdaily.com/06042015_cfpb_reverse_mortgages.asp

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Mortgage Profits Doubled in Q1

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Posted To: MND NewsWire

Mortgage profits soared in the first quarter of 2015 the Mortgage Bankers Association (MBA) said this week, nearly doubling the per loan net produced in the fourth quarter of 2014. Independent mortgage banks and subsidiaries of chartered banks reported increased refinancing volume and secondary marketing gains allowed them to compensate for increased origination costs. According to MBA's Quarterly Mortgage Bankers Performance Report, banks had a net gain of $1,447 on each loan they originated during the quarter. In the previous period they reported a gain of $744 per loan. "Net production profits among independent mortgage bankers nearly doubled from the fourth quarter of 2014 and secondary marketing gains improved by 31 basis points over the fourth quarter, based largely on the increase in...(read more)

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Source: http://www.mortgagenewsdaily.com/06032015_mba_mortgage_profits.asp

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Mortgage Rates Pummeled. Worst Might Not Be Over

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Posted To: Mortgage Rate Watch

Mortgage rates had an awful day today , and they were among the lucky ones. The true pain emanated from Europe, as has been the case so many times in recent years. In that regard, mortgage rates were innocent bystanders. It's not that mortgage rates are based on European market movements. Rather, the problem is that global markets are interconnected. Major movements in European bonds translate to less major movements in US Treasuries, which in turn translate to movement in the mortgage-backed-securities (MBS) that lenders use to determine mortgage rates. Today's key event was a press conference with the head of the European Central Bank (ECB), Mario Draghi. When the ECB began its bond buying campaign, the only indication on timing was that it was guaranteed to last through Sep 2016. Draghi...(read more)

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Source: http://www.mortgagenewsdaily.com/consumer_rates/477152.aspx

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MBS MID-DAY: Why are Bond Markets Getting Destroyed Today?!

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Posted To: MBS Commentary

This morning's commentary said " things get serious ," and that we could well expect to depart the recent range in a big way . Now, we are. 10yr yields are already up to 2.373--a new high for 2015, and mortgage rates are well into 2015 highs with Fannie 3.0s down a full point today. The week's first big ticket event delivered the drama as Draghi did what everyone hoped he wouldn't do. Speculation mounted earlier this year that the ECB might amend their bond buying timeline. Just a few short weeks ago, he reaffirmed the September 2016 deadline. Now in today's press conference, he said that the ECB could end purchases sooner if conditions allowed. My goodness... they just don't know how to overpromise and overdeliver across the pond! If the Fed pulled this crap ...(read more)

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Source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/477043.aspx

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