MBS Live : MBS Afternoon Market Summary 104-16 Turned out to be an important level for Fannie 3.5′s today. There’s more than the usual amount of content in the ‘alerts and updates’ section below if you’re looking to get caught up on how it played out. Long story short, bond markets held up quite well on a Friday that mostly saw money flowing OUT of both sides of the market (i.e. equities and fixed-income both lower in price today). But even the late day volatility left the 104-16 technical level intact through 4pm. From now until MBS go out for the day, it’s not out of the realm of possibility to see illiquidity take things a bit lower, but whether or not lenders react to that depends on the lender in question. If it were us, we’d call it a week. MBS Pricing Snapshot Pricing shown below is…(read more)

Mortgage News Daily

With so many unprecedented and hefty considerations, markets might enjoy today’s complete absence of scheduled economic data as some sort of chance to seek its own equilibrium. That sentence was actually lifted from an article we wrote in July 2011 when European drama was first beginning to collide with impending Fed policy changes. The first four days of the week contained plenty of events informing both of those heavy hitters and markets attempted to reconcile those versus the decreasingly significant scheduled econ calendar. Back then, we thought that the data-less Friday looked like a decent opportunity for markets to “trade it out,” but as it happened, things didn’t move too much until two weeks later when 10yr yields dropped about 60bps in 5 days in the run up to NFP. Interestingly enough…(read more)

Mortgage News Daily

There were substantial improvements in delinquency rates during the first quarter of 2012 according to the National Delinquency Survey for the period released this morning by the Mortgage Bankers Association. At a conference call for media accompanying the release, Jay Brinkmann, MBA’s Chief Economist and Senior Vice President of Research and Education said that the combined percentage of loans in foreclosure or at least one payment past due was 11.33 percent, a 120 basis point (bp) decrease from last quarter and 98 from one year ago. This was the lowest that this measure has been since 2008. This improvement was driven by a 62bp decrease in the rate of loans that were 30 days or more delinquent. Brinkmann said that the first quarter generally experiences a decline in 30-day delinquencies for…(read more)

Mortgage News Daily

Mortgage Rates paused their recent trend of moderate improvement today to hold steady near all-time lows. Despite an abundance of domestic economic data out this morning, r ates continue to be indirectly fueled by political and economic turmoil in the Euro-zone. After failing to form a new government, Greece today announced it would hold new elections. Investors fear that those left in power will lead Greece to back-out of the austerity pledges required by the EU and IMF for recent bailout monies as well as Greece’s membership in the EU. If Greece stops receiving that money, they’re all but guaranteed to officially default (their recent debt-restructuring was already a default by some standards), and also all but guaranteed to be booted out of the European Union. If those things happen, investors…(read more)

Mortgage News Daily

Housing affordability may be at an all time high according to the quarterly Housing Affordability Index for the first quarter of 2012. The index, issued this morning by the National Association of Realtors® (NAR), hit 205.9, the first time it has broken through 200 since recordkeeping began in 1970. The companion index measuring the ability of first-time buyers to purchase a home also set a record at 135.8. The index gauges the purchasing power of a household given the relationship between median home price, median family income, and the average mortgage interest rate. The higher the index, the greater the household purchasing power. The index assumes, at an interest rate of 4.18 percent, the median income family, earning just under $ 61,000 could afford a home costing $ 325,500 in the first…(read more)

Mortgage News Daily

Don’t expect much — or any positive — movement. Despite record low rates and the lowest historical affordability rates on record, the fundamental issues plaguing new home sales persist . The National Association of Home Builders (NAHB)/Wells Fargo will release its Housing Market Index (HMI) on Tuesday, May 15. The index measures builders’ outlooks for the economy and the housing market over the next six months. Although several metrics, including the HMI, have shown general growth over the past year, first quarter growth has been considerably minimal. Moreover, the HMI actually decreased to 25 in April for the first time in several months, falling to 2007 levels. This decrease is especially noticeable considering that it is now the spring buying period. The HMI may be positively…(read more)

Mortgage News Daily

MBS Live : MBS Morning Market Summary By now it should be reasonably understood that there is no hard and fast rule that says stock prices will always move with bond yields as has been the general historical tendency. The onset of European turmoil has afforded both sides of the domestic market to make gains where they otherwise would demonstrate a bit more push and pull. That said, it’s still fairly common to see the “positive correlation” (Treasury yields tend to move up when stock prices are moving up) even though the “MAGNITUDE” of the correlation has allowed each side of the market to make gains in the longer run. And it’s the same story this morning. Bond prices are higher and stocks are insanely higher. The stock lever has weighed on bonds to some extent, but only inasmuch as it has prevented…(read more)

Mortgage News Daily

In a press briefing held in advance of President Obama’s appearance in Reno, Nevada, Housing and Urban Development (HUD) Secretary Shawn Donovan gave a preview of the home refinancing aspects of the President’s “To Do List” for Congress which he will be discussing further this afternoon. Donovan also provided updates on the results of last fall’s executive refinancing initiatives. Donovan said that last October, the President had included proposals to increase refinancing in the jobs plan he submitted to Congress. Ordinarily, the Secretary said, the economy would be receiving an enormous boost from the record low interest rates so refinancing is a critical step in realizing this. When Congress did not act on the jobs bill the President asked administration officials to identify what could be…(read more)

Mortgage News Daily

Occasionally I remind folks that rates are low . They know that, but to remind them even further, I tell them that if Mr. & Mrs. Smith spend their working lives and save up $ 1 million for retirement, and then, to be safe, want to invest it in a “risk free” 10-yr Treasury note, they’ll earn about 1.8%, or only $ 1,500 per month for the next ten years! To me, a million dollars is a pretty good nest egg, but when put into this context… and as it turns out, even this $ 1 million isn’t likely. According to the latest survey, about 49% of Americans say they aren’t contributing to any retirement plan . “People ages 18 to 34 are the least likely to be saving, with 56% reporting that they are not currently contributing to a retirement plan like an IRA or a 401(k).” I hope that everyone isn’t relying…(read more)

Mortgage News Daily

Mortgage Rates improved moderately today as European turmoil continues to benefit domestic interest rates. Yesterday’s late news of a $ 2 bln trading loss at JP Morgan also contributed to the overnight gains in broader bond markets, but it has been lingering uncertainty about the European situation that allows rates markets to hold steady at lower levels. Many lenders are back in line with some of their lowest rate sheets ever, though none are noticeably better. T he Conventional 30yr Fixed Best-Execution Rate is well-established at 3.875% ( read more about Best-Execution calculations ), and some of the most aggressive lenders in the marketplace may be able to offer competitive scenarios at 3.75% for the most ideally situated borrowers. That said, there will continue to be diminishing returns…(read more)

Mortgage News Daily