MBS RECAP: Bonds Erase Losses as Trade Deal Underwhelms

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MBS RECAP: Bonds Erase Losses as Trade Deal Underwhelms

Posted to: MBS Commentary
Friday, December 13, 2019 5:10 PM

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Bonds were leading off in a slightly friendly direction during the overnight session, largely because we hadn’t really heard from China with respect to yesterday’s trade deal drama. Nonetheless, it seemed like more concrete steps were being taken, so markets were willing to move in a risk-on direction (better for stocks, worse for bonds) in general.

The whole “not hearing from China” thing was validated right out of the gate with headlines suggesting China had concerns about US agricultural purchase requirements. Shortly thereafter, Trump tweeted harsh criticism for a…

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Daily Newsletter: Rates Bounce As Trade Deal Underwhelms; Has Refi Boom Run Out of Steam?

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dailynewsletter.png
30 Year Fixed
3.78% -0.03
15 Year Fixed
3.43% -0.03
10YR Treasury
1.81% -0.0277
FNMA 30YR 3.5
102.69 +0.11
FNMA 15YR 2.5
102.31 +0.11
View Today’s Rates
Friday December 13, 2019
Mortgage Rate Watch – 4:34PM
Mortgage Rates Bounce After Trade Deal Update
Mortgage rates were somewhat distressed , to say the least, after yesterday’s various news stories pertaining to the US/China trade deal. For a variety of reasons, that’s the biggest …
MND NewsWire – 11:57AM
Lender Survey: Has the Refi Boom Run Out of Steam?
Lenders responding to Fannie Mae’s Q4 2019 Mortgage Lender Sentiment Survey ® didn’t have as bright an outlook for their future profit margins as in the previous survey when their …
MBS Commentary – 11:05AM
So Much Trade War Drama, But Bonds in a Range
The litany of updates/alerts listed below effectively serves to frame the launch sequence for today’s trading. If you don’t care to wade through the minutia, just read the most recent …
MND NewsWire – 8:14AM
Only 2 Million U.S. Homes Remain Underwater
According to Dr. Frank Nothaft, chief economist for CoreLogic, “Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity.” This was …

Latest Video


USTR confirms phase one China trade deal, outlines details in statement

US-China reach Phase I trade agreement—Three experts on what it means for markets

Here are China’s concerns about the phase one trade deal on the table

More News from ‘Around the Web’

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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 3.78% -0.03
15 Yr FRM 3.43% -0.03
FHA 30 Year Fixed 3.40% -0.03
Jumbo 30 Year Fixed 3.90% -0.01
5/1 Yr ARM 3.48% -0.02

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 0.00% 0.00 +0.00
30 Yr. Fixed 0.00% 0.00 +0.00
MBA ** hdr_arrow.png
30 Yr. Fixed 3.99% 0.33 -0.04
15 Yr. Fixed 3.40% 0.31 -0.03
30 Yr. Jumbo 3.93% 0.28 -0.05
30 Yr. FHA 3.80% 0.32 -0.05
5/1 ARM 3.51% 0.23 +0.11
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 3.73% 0.70 +0.05
15 Yr. Fixed 3.19% 0.70 +0.05
1 Yr. ARM 2.68% 0.20 +0.01
5/1 Yr. ARM 3.36% 0.40 -0.03

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 101.25 +0.08
30YR FNMA 3.5 102.69 +0.11
30YR GNMA 3.0 102.70 +0.16
30YR GNMA 3.5 103.63 +0.03
15YR FNMA 3.0 102.31 +0.11
15YR FNMA 2.5 100.73 +0.13
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
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2 YR 1.6417% -0.0120
5 YR 1.6711% -0.0148
10 YR 1.8139% -0.0277
30 YR 2.2320% -0.0333
Prices as of: 12/11/2019 12:37PM EST

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This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates and terms are subject to change without notice.
© 2019 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
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Daily Rate Update: Mortgage Rates Bounce After Trade Deal Update

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dailyrateheader.png
30 Year Fixed
3.78% -0.03
15 Year Fixed
3.43% -0.03
10YR Treasury
1.81% -0.0277
FNMA 30YR 3.5
102.69 +0.11
FNMA 15YR 2.5
102.31 +0.11
View Today’s Rates
Mortgage Rates Bounce After Trade Deal Update
December 13, 2019
Mortgage rates were somewhat distressed, to say the least, after yesterday’s various news stories pertaining to the US/China trade deal. For a variety of reasons, that’s the biggest consideration for financial markets at the moment, and interest rates are no exception. Rates were pushed to the upper edge of their recent range as the signing of the first phase of the trade deal looked increasingly likely by the end of the week.

While both sides basically acknowledged the progress on the deal (and even the probability that it will be signed), it was not, in fact, actually signed. Additionally, several details still need to be cleared up before that happens.

The absence of a more concrete trade deal conclusion proved beneficial for rates. As far as underlying bond markets are concerned, much of yesterday’s damage was undone. Mortgage lenders would likely need one more day with bonds holding current levels before getting their rate sheet offerings back to Wednesday’s levels, but they got fairly close by the end of business today.


Loan Originator Perspectives

As I expected, today’s tariff announcement fell short of being an actual agreement, and bond markets regained much of yesterday’s snowball losses. Looks like rate sheets don’t reflect all our gains, I will wait until end of day (or next week) before I lock any new loans. –Ted Rood, Senior Originator

Today’s Most Prevalent Rates For Top Tier Scenarios

  • 30YR FIXED – 3.875%
  • FHA/VA – 3.375% – 3.5%
  • 15 YEAR FIXED – 3.375%
  • 5 YEAR ARMS – 3.25-3.75% depending on the lender


Ongoing Lock/Float Considerations

  • 2019 has been the best year for mortgage rates since 2011. Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections
  • Fed policy and the US/China trade war have been key players. Major updates on either front could cause a volatile reaction in rates
  • The Fed and the bond market (which dictates rates) will be watching economic data closely, both at home and abroad, as well as trade war updates. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will lead to new long-term lows.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders. The rates generally assume little-to-no origination or discount except as noted when applicable. Rates appearing on this page are “effective rates” that take day-to-day changes in upfront costs into consideration.

30 Year Fixed Rate Mortgage
13?w=360
15 Year Fixed Rate Mortgage
13?w=360&p=15YRFRM

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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 3.78% -0.03
15 Yr FRM 3.43% -0.03
FHA 30 Year Fixed 3.40% -0.03
Jumbo 30 Year Fixed 3.90% -0.01
5/1 Yr ARM 3.48% -0.02

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 0.00% 0.00 +0.00
30 Yr. Fixed 0.00% 0.00 +0.00
MBA ** hdr_arrow.png
30 Yr. Fixed 3.99% 0.33 -0.04
15 Yr. Fixed 3.40% 0.31 -0.03
30 Yr. Jumbo 3.93% 0.28 -0.05
30 Yr. FHA 3.80% 0.32 -0.05
5/1 ARM 3.51% 0.23 +0.11
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 3.73% 0.70 +0.05
15 Yr. Fixed 3.19% 0.70 +0.05
1 Yr. ARM 2.68% 0.20 +0.01
5/1 Yr. ARM 3.36% 0.40 -0.03

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 101.25 +0.08
30YR FNMA 3.5 102.69 +0.11
30YR GNMA 3.0 102.70 +0.16
30YR GNMA 3.5 103.63 +0.03
15YR FNMA 3.0 102.31 +0.11
15YR FNMA 2.5 100.73 +0.13
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
2 YR 1.6417% -0.0120
5 YR 1.6711% -0.0148
10 YR 1.8139% -0.0277
30 YR 2.2320% -0.0333
Prices as of: 12/11/2019 12:37PM EST

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About This Report
Mortgage News Daily is a trusted source of mortgage rate market data and analysis, with over 1 million readers each month. Unlike many rate surveys, our survey is conducted on a daily basis and is designed to bring you the most current and accurate rate data available. We use a proprietary formula to calculate averages based on best-execution rates from top lender’s rate sheets, also taking into account feedback from hundreds of mortgage market professionals around the country.
© 2019 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
View this Report in your Web Browser | Forward to a Friend | Subscribe
This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates presented in this report are averages and are subject to change without notice.
You were sent this email because you opted to receive our weekly or daily email reports. Go here to manage your email preferences or here to unsubscribe from all email communications.

Lender Survey: Has the Refi Boom Run Out of Steam?

Lender Survey: Has the Refi Boom Run Out of Steam?

Posted to: MND NewsWire
Friday, December 13, 2019 11:19 AM

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Lenders responding to Fannie Mae’s Q4 2019 Mortgage Lender Sentiment Survey® didn’t have as bright an outlook for their future profit margins as in the previous survey when their expectations were at a high for the survey which dates back to 2014. However, 44 percent of the 188 senior lending executives completing the survey believe their profit margins will remain about the same compared to the prior quarter, while the remainder are almost evenly divided among those who expect profits will fall (28 percent) and those who expect them to rise, 27 percent. Fannie Mae cites the Mortgage Bankers Association’s (MBA’s) recent Quarterly Mortgage Bankers Performance Report which showed lender’s per loan net production income has been on the rise over the first three quarters of 2019.

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So Much Trade War Drama, But Bonds in a Range

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So Much Trade War Drama, But Bonds in a Range

Posted to: MBS Commentary
Friday, December 13, 2019 11:05 AM

Forward this email: Send a copy of this story to someone you know that may want to read it.

The litany of updates/alerts listed below effectively serves to frame the launch sequence for today’s trading. If you don’t care to wade through the minutia, just read the most recent update or simply allow me to paraphrase:

There was some confusion earlier as a Trump tweet apparently pushed back on the WSJ article from yesterday which spelled out changes in US/China tariffs. But it turns out Trump was referencing a more recent WSJ article from this morning. Bonds moved back and forth on those headlines, but ultimately began to lead off in a positive direction simply…

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Correspondent, Processing, Broker Products; Deep Capital Markets Dive

Correspondent, Processing, Broker Products; Deep Capital Markets Dive

Posted to: Pipeline Press
Friday, December 13, 2019 8:39 AM

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While the markets are talking about Boris Johnson’s victory in the U.K. (“get Brexit done”), here’s your trivia of the day: Every month that starts on a Sunday has a Friday the 13th. And did you know that research on humans shows that in the short term, we tend to regret actions more than inactions. But in the long term, we’re more likely to regret the things we didn’t do. For lenders… Didn’t merge? Didn’t add that branch? Didn’t hire that great underwriter? (Psychologists suspect that this is because the consequences of inaction are uncertain and take much longer to make an impact.) I’ve been telling folks for quite some time that I hope they’re happy with rates where they since they’ll probably be here for a while. Yesterday they moved higher giving pause to anyone predicting a recession in 2020 (two straight quarters of negative U.S. GDP). Yes, short term rates will probably stay around these levels for quite some time. But originators should understand what the current state of the U.S. economy, and economies around the world, is. Lots more on what is driving, or stabilizing rates, below.

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Only 2 Million U.S. Homes Remain Underwater

Only 2 Million U.S. Homes Remain Underwater

Posted to: MND NewsWire
Thursday, December 12, 2019 12:42 PM

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According to Dr. Frank Nothaft, chief economist for CoreLogic, “Ten years ago, during the depths of the Great Recession, more than 11 million homeowners had negative equity.” This was a quarter of mortgaged homes, he said. Times have certainly changed. The third quarter report from CoreLogic on the equity in U.S. residential property shows only about 2 million homes to be underwater, with a higher balance on the mortgage or mortgages than the homes’ value. This is 3.7 percent of all mortgaged properties. The national aggregate value of negative equity was approximately $301 billion at the end of the third quarter of 2019. This is down quarter over quarter by approximately $2.4 billion, from $303.4 billion in the second quarter of 2019 and the number of homes affected was 220,000 fewer than a year earlier, a 10 percent decline.

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