BofA Looks to Exit Correspondent, What Next?

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Aug 31, 2011 9:12AM

BofA Looks to Exit Correspondent, What Next?

Mortgage banking and real estate are typically not physically hazardous professions. In case you’re ever tempted to throw down your pen & pencil and pick up a shovel to earn a living, check these out . (I especially like the guy in the pink shirt.) Last night news came through the Wall Street Journal that ” Bank of America Corp. intends to sell its correspondent mortgage business , as the troubled lender looks to narrow its focus and bolster its financial strength…Employees could be notified…

Aug 31, 2011 3:08PM

What’s Causing the Afternoon Weakness in MBS?

Very much a burning question this afternoon, but there are no profoundly alarming answers. Some are short term and ethereal, dealing with things like today’s headlines, month end buying (or lack thereof), after-hours illiquidity, and others. But we already put out a reprice alert for temporary factors (twice), so we’re going to focus on the big picture. In fact, focusing on the big picture is pretty much the only thing that makes much sense right now considering our nearness to historical levels…

Micro News

4:11 PM:

Treasury: Fifty Additional Community Banks Receive $767M To Aid Small Business / Jobs

3:08 PM:

New MBS Commentary Post

3:04 PM:

Fed: Banking Agencies Urge Responsible Lending

2:51 PM:

Bank of America Issues Statement in Response to Media Reports on Mortgage Business

2:30 PM:

Renewed Risks of Reprices for the Worse

1:58 PM:

Volatility Decreasing. MBS Prices Leaking Lower

11:56 AM:

AIA: Urge President, Congress to Adopt Measures to Boost Design / Construction Work

10:41 AM:

MICA: Private Mortgage Insurance Activity Report

Around the Web

Video News

Realty Check: Weekly Mortgage Apps Plunge

ADP Numbers: Employment Up 91,000

Karl Case Says U.S. Housing Market `Dead in the Water’

Today’s Comments

David Zilkha

“Well said Ken. There may have been suboridnation issues early on. But i have not had a problem with any ext sub in the last few years and have done hundreds…”

Ken Crute

“HARP or a HARP like product really needs to be opened to performing non-agency loans, as mentioned. well qualfied borrowers that cannot refinance due to…”

Anonymous

“As long as we’re brainstorming here, let’s make all MI transferrable to a new HARP servicer as an incentive for servicers to actually, well, service…”

Today’s Q&A

Anonymous

“Who can I talk to about a property that has gone back to the…”

Anonymous

“I have a Seperation Agreement form signed by myself and my ex…”

Anonymous

“I am interested in buying a home that was listed a few years…”

<!–

Today’s Forum Discussions

Diego Remolina

“I still wonder, why there has not been a mandate from somebody (maybe even the government) to protect the customer information. During the past few years…”

Davis Fred

“When developing small housing units for the Economically Weaker Sections (EWS), consisting of serviced plots of 300 sq ft and 100 sq ft of concreted plinth…”

Michael Wolff

“i think its a good idea.”

–>

[Mortgage Rate Watch] – Mortgage Rates: Volatility Strikes Back!

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Mortgage Rates: Volatility Strikes Back!

Posted to: Mortgage Rate Watch
Wednesday, August 31, 2011 4:45 PM

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As folks returned from holidays overseas and got their power turned back onafter Irene, participation picked up in the markets and MortgageRates improved yesterday, basically right back to Friday afternoon’slevels.

But our old friend “volatility”brough rates right back up to Monday’s levels!  Arghgh! What to do?!  Fortunately, we toldyou what to do yesterday,when we said the “ongoing guidance from recent posts is back in full effect.”  So hopefully, you’re locked up, and if not,read the “guidance” section below.

CURRENT MARKET*: The BestExecution 30-year fixed mortgage ratehas moved BACK UP to 4.25% and in some cases 4.375%. Several lenders arewilling to offer lower rates, but those quotes carry with them additionalclosing costs.  On FHA/VA 30 year fixed BestExecution moved BACK UPto 4.25%.  Deals can be structured with lower rates, but again, you’ll paymore for those, so make sure you assess the time it takes to break-even on theextra expense.  15 year fixed conventional loans are best priced at3.625%. Five year ARMs are still best priced at 3.250%. ARMs seem to havebottomed out. 

A note on the greater-than-normal variation in rate offerings betweenlenders.  There is an increased amount of variety in what individuallenders are now quoting as their BestExecution rates.  This is afactor of price volatility in the secondary mortgagemarket. Unfortunately when volatility picks up in the secondarymortgage market, the cost of doing business gets more expensive for lenders(hedging costs go up). Those added costs are usually passed down to consumersvia extra margin in rate sheets.  Additionally, the recent rates rallymakes lenders busy enough that some control their inbound volume by raisingrates regardless of the secondary mortgage market in order to discourage newapplications/locks.

GUIDANCE: This has been quite a little 4 day whipsaw of volatilityfor mortgage rates.  Rarely have we movedso rapidly up and down between BestExecution rates.  Last time we were at these levels, we notedthere might be some opportunity for a strategic float, but we felt safer aboutthat at the beginning of the week than we do today with only one more sessionto go before Friday’s NFP.  But that’sthe extent of the warning.  We don’t feeldownright opposed to waiting and seeing what tomorrow holds, just that we’re “lesssure” that tomorrow will see rates bounce back. In general, locking in here still makes lots of sense for lots ofscenarios considering our overall nearness to all-time lows and the fact thatit’s more frustrating to miss out on a refi opportunity in the low 4’saltogether than to miss out on an opportunity in the high 3’s but still lock inthe low 4’s.  Friday remains high risk owing the the EmploymentSituation Report, so if you’re not locked up by Thursday, you’re at thewhim of Friday’s jobs data which could take rates either direction. 

Refi Roadmap: A Locked Rate Isn’t a Closed Loan <–must read

—————————- 

*Best Execution is the most cost efficient combination of noterate offered and points paid at closing. This note rate is determined based onthe time it takes to recover the points you paid at closing (discount) vs. themonthly savings of permanently buying down your mortgage rate by0.125%. When deciding on whether or not to pay points, the borrower musthave an idea of how long they intend to keep their mortgage. For more info, askyou originator to explain the findings of their “breakeven analysis” onyour permanent rate buy down costs.

*Important Mortgage Rate Disclaimer: The Best Execution loan pricingquotes shared above are generally seen as the more aggressive side of theprimary mortgage market. Loan originators will only be able to offer theserates on conforming loan amounts to very well-qualified borrowers who have amiddle FICO score over 740 and enough equity in their home to qualify for arefinance or a large enough savings to cover their down payment and closingcosts. If the terms of your loan trigger any risk-based loan level pricingadjustments (LLPAs), your rate quote will be higher. If you do not fall intothe “perfect borrower” category, make sure you ask your loanoriginator for an explanation of the characteristics that make your loan moreexpensive.”No point” loan doesn’t mean “no cost” loan. Thebest 30year fixed conventional/FHA/VA mortgage rates still include closingcosts such as: third party fees + title charges + transfer and recording. Don’tforget the fiscal frisking that comes along with the underwriting process

CAUTION: MND guidance is speculative in nature. We don’t have acrystal ball, we can’t predict the future, we can only share our outlook.Making the following considerations extra important……………………

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as youwant/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as youwant/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make toughdecisions?

 

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[MBS Commentary] – What’s Causing the Afternoon Weakness in MBS?

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What’s Causing the Afternoon Weakness in MBS?

Posted to: MBS Commentary
Wednesday, August 31, 2011 3:08 PM

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Very much a burning question this afternoon, but there are no profoundly alarming answers.  Some are short term and ethereal, dealing with things like today’s headlines, month end buying (or lack thereof), after-hours illiquidity, and others.  But we already put out a reprice alert for temporary factors (twice), so we’re going to focus on the big picture.

In fact, focusing on the big picture is pretty much the only thing that makes much sense right now considering our nearness to historical levels and with so much seemingly at stake this Fall (QE or not QE?  Refi Program?  Recession or no recession?  Last time we’ll see 4% 30yr rates?).  August is the biggest month of rallying in the history of rates, so it’s SUPPOSED TO get a bit crazy-making if we try to overanalyze the minutae. 

In the spirit of “big picture,” we generally favor looking at 10yr notes as the spokesperson for “bond markets” as a whole.  We’ll dig into MBS in the last 2 charts, but will introduce you to our madness with 10’s.  Beginning with the most basic construction of recent trading.  There’s a more than decent chance that things really are as simple as a basic, horizontal range trade.  2.23 has certainly come into play over the past 5 sessions, only allowing yields to pass through on 3 occasions, and a logical point of retreat after failing to break 2.17 (another important technical level).

But even on that chart of flat lines, your eye may already be noticing other trends in play.  In fact, there are sideways, bullish, and bearish elements all operating together at the moment.  The simple (it really is) reason for this is that the market is in the process of consolidating after the shell-shock earlier in the month.  That means there are supportive trends leading the high yields lower and resistant trends pushing them higher.  The following chart looks exclusively at these sloped lines.

The teal lines represent the dominant trend channel downward.  The slope of those lines = the “pace” of the downtrend.  In other words, yields are moving up and down between those lines, but a majority of highs and lows are happening at lines that lie along that same slope.  But it’s the same story with the red lines.  That slope = the pace of the uptrend in yields and that line itself has been a firm source of resistance to gains seeing just the 2 “tests” to breakout on 8/18 and again this morning.  But look!  Not only did yields test the lower red line this morning, but also the lower teal line!  So which trend was being tested?  You can see in the white circled portion of the chart that the market ultimately traded as if to suggest that the red line was the focus.  The fact that this occurred only minutes before the 3pm close on the last day of the month, 2 days before NFP is certainly enough for a sharp move higher in yield.  Well…  it seemed sharp in a shorter context, but in the context of the above chart, perhaps you’ll agree it looks like a logical return to another technical level (either the mid-point of the downtrend or the high end of the up-trend— red or teal–take your pick).

Here’s a look at the 2.17 and 2.23 levels mentioned above, but zoomed out a bit to show the “sideways” trend that bisects the trends discussed above (again, today could just be this simple):

There’s no one right way to look at it when it comes to deciding between “diagonal” or “flat.”  They’re both valid.  The more important trend is probably the “sideways” way of looking at things, at least until one of the diagonal trends is broken.  This hopefully alleviates some of the inherent panic with losing ground as quickly as we did this afternoon in MBS.  Take a look at a longer term chart and see if it makes more sense:

Pretty epic revisiting of a previous ceiling.  Classic inflection point.  Way to go Fannie 3.5’s for exhibiting some excellent technical behavior!  But 4.0’s are no slouch in that arena either!

As you can see, there was a “then” earlier in the month, we moved on to bigger, better things, and now there is a “now.”  We’ve moved back to middle ground.  Rates either move higher or lower over the next two days, but either way, markets seem to have set up (as they almost always do) as close to their middle ground as possible.

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Your Wells Fargo Mortgage Rate Monitor(SM) Alert

Wells Fargo Mortgage Rate Monitor(SM) Alerts

Today's Rates: August 31, 2011

—————————————————————–
30 YEAR FIXED (CONFORMING(1) LOAN RATE)
INTEREST RATE: 4.375%
ANNUAL PERCENTAGE RATE (APR): 4.559%
MONTHLY PAYMENT: $873.75
PAYMENT TERM: 30 YEARS
LOAN AMOUNT: $175,000
EST. PREPAID FINANCE CHARGES: $3,750
DOWN PAYMENT: 25%
—————————————————————–
15 YEAR FIXED (CONFORMING(1) LOAN RATE)
INTEREST RATE: 3.375%
ANNUAL PERCENTAGE RATE (APR): 3.691%
MONTHLY PAYMENT: $1,240.33
PAYMENT TERM: 15 YEARS
LOAN AMOUNT: $175,000
EST. PREPAID FINANCE CHARGES: $3,750
DOWN PAYMENT: 25%
—————————————————————–
30 YEAR FIXED (FHA)
INTEREST RATE: 4.25%
ANNUAL PERCENTAGE RATE (APR): 5.251%
MONTHLY PAYMENT: $1,035.92
PAYMENT TERM: 30 YEARS
LOAN AMOUNT: $175,000
EST. PREPAID FINANCE CHARGES: $3,750
DOWN PAYMENT: 3.5%
—————————————————————–
Be aware that mortgage rates can change without notice and apply
only in certain conditions. The APR for the loan products shown
reflects the interest rates and estimated prepaid finance charges
which include 1% of your loan amount to be paid toward the loan
origination charge, but does not include all closing costs or
discount points. The displayed rates assume that you're
refinancing a single-family primary residence with a 90-day-lock.

These mortgage rates are based upon a variety of assumptions and conditions which include a consumer credit score which may be higher or lower than your individual credit score. Your loan's interest rate will depend upon the specific characteristics of your loan transaction and your credit profile up to the time of closing.

The monthly payment amount displayed includes principal and interest only. The payment amount does not include homeowner's insurance or property taxes which must be paid in addition to your loan payment.

Conventional loans with a down payment less than 20% require mortgage insurance which could increase the monthly payment and APR.

FHA loans require both an upfront and an annual mortgage insurance premium. The upfront fee is $1,750.00. The annual premium varies based on individual credit scores, your loan-to-value ratio and the loan term. For the FHA loan, a mortgage insurance payment has been added to the monthly principal and interest payment displayed above.

(1) Conforming loan amounts for certain loan products have increased in federally designated metropolitan areas. Larger limits available in the state of Hawaii. To find out if these new loan limits can help meet your needs, contact us.
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[MND NewsWire] – Fed Reports Lending Standards, Mortgage Demand Largely Unchanged.

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Fed Reports Lending Standards, Mortgage Demand Largely Unchanged.

Posted to: MND NewsWire
Tuesday, August 30, 2011 1:22 PM

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The Federal Reserve’s most recent SeniorLoan Officer Opinion Survey on Bank Lending Practices noted that the demand forsome types of residential real estate loans had weakened over the previousthree months.  In addition, most of the55 domestic banks and 22 U.S. branches and agencies of foreign banks thatresponded to the survey indicated that they expected this lack of demand tocontinue through the year.

Conducted in July, the survey addressed changes in Banks’ perceived demand forloans to businesses and households over the past threee months.

Questionsabout residential real estate cover three types of loans; prime, subprimeloans, and non-traditional mortgages which include interest only and Alt-A mortgages such as thoserequiring limited income and other verifications.  Banks themselves are classified as “large” ifthey have assets greater than $20 billion and “other” if assets are less.  53 banks responded to the set of questionson residential mortgages.

Overthree-quarters of banks reported that their credit standards for both prime andnon-traditional loans had remained basically unchanged over the last threemonths.  The remaining respondentswere divided fairly evenly on whether standards had tightened or eased, but none of them indicated “considerable” easing or tightening.  Only about half the respondents said they offered nontraditional mortgages and too few banks answered questionsabout subprime loans for the responses to be reported.

Therewas considerably more differentiation among responses to questions aboutconsumer demand for residential mortgages.  53 percent of banks said that the demand for prime mortgageshad remained about the same during the previous three months while 22.6 percentcalled demand “moderately stronger.”  24.5 percent thought demand was moderately weaker.  Among the smaller group offeringnon-traditional mortgages 71 percent said demand was about the same, 21 percentnoted moderate or substantial weakening and 8.3 percent said demand wasmoderately stronger.

Thebankers were also questioned about standards and demand for home equity linesof credit (HELOCs).  Over 88 percentreported that credit standards were unchanged. Of the five banks (9.4 percent) reporting somewhat eased standards, fourwere large banks.  Only one bank saidthat his bank’s standards had tightened somewhat.

Demandfor HELOCs was unchanged among more than half of the banks while more than onequarter said demand had weakened and 19 percent indicated moderately strongerdemand.  A disproportionate number ofthose reporting moderately stronger demand were those classified as “other”banks.  

TheFederal Reserve asked bankers a series of questions about their expectationsfor the second half of the year regarding closed-end residential loans.  None of the bankers expected significantincreases or decreases in demand and 75 percent expected no change at all.  The remainder were evenly divided (9.5percent each) among those expecting originations to decrease somewhat and thoseexpecting them to increase somewhat.

Respondents were given eight reasons why demand for closed-end residential real estate loans might increase or decrease over the remainder of the year and asked to assess their importance.  Here’s how the responses stacked up in terms of the percentage of respondents ranking these statements as “somewhat or very important”

98 percent: “Reduced or Unchanged Demand From Creditworthy Borrowers”

95 percent: “Uncertainty About The Economy”  95 percent said this was somewhat or very important.

93 percent: “Uncertain or Unfavorable Forecasts for House Prices”

And here are the percentages of respondents who said the following factors were NOT important to loan demand through 2011:

–  70.5 percent: “lack of secondary and securitization markets for non-conforming loans”

–  61.4 percent: “The expected reduction in conforming loan limits”

–  70.5 percent “reduced availability of private mortgage insurance” 

With respect to consumer lending, the net percentages of banks that reportedeasing standards were low and roughly in line with the previous survey. Whilepositive net fractions of respondents reportedly experienced an increase indemand for both credit card and auto loans over the past three months, thepickup in demand was not widespread; moreover, demand for other consumer loanswas about unchanged.

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[MBS Commentary] – MBS MID-DAY: 8/31/2011

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MBS MID-DAY: 8/31/2011

Posted to: MBS Commentary
Wednesday, August 31, 2011 11:21 AM

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MBSonMND: MBS MID-DAY
Open MBSonMND Dashboard
FNMA 3.5
100-31 : +0-00
FNMA 4.0
103-28 : -0-01
FNMA 4.5
105-26 : +0-00
FNMA 5.0
107-24 : +0-00
GNMA 3.5
102-17 : -0-03
GNMA 4.0
106-01 : +0-01
GNMA 4.5
108-08 : +0-01
GNMA 5.0
110-05 : +0-00
FHLMC 3.5
100-26 : -0-01
FHLMC 4.0
103-25 : +0-01
FHLMC 4.5
105-19 : +0-00
FHLMC 5.0
107-16 : -0-01
Pricing as of 11:01 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard.
10:19AM  :  ALERT: Potential Reprices for the Worse or Rate Sheet Delays

So much for bond markets being hesitant to run into the red… 10yr notes are just under 5bps higher on the day at 2.22, Fannie 4.0’s are 7 ticks of a point lower at 103-22 and 3.5’s are a quarter point lower at 100-27. All this on the heels of a tepid, but not awful Chicago PMI followed by a “beat” on Factory Orders data, not to mention what had already been a recklessly exuberant display of QE3 front-running in equities (ok… maybe not QE3 proper, but at least “stimulus” after yesterday’s Fed minutes) as well as a brisk rally in European markets (stimulus expectations there too? After a higher than expected unemployment reading?). Whatever the case, if you had pricing already today, you’ll probably soon have a reprice for the worse. Otherwise, delayed (and weaker) rate sheets, but not without potential to bounce back by day’s end.
10:09AM  :  ECON: Factory Orders Rebound in July on Transportation

(Reuters) – New orders for U.S. factory goods rose more than expected in July as demand for transportation equipment surged, a government report showed on Wednesday, pointing to some resilience in manufacturing at the start of the third quarter. The Commerce Department said orders for manufactured goods increased 2.4 percent after a revised 0.4 percent fall in June. Economists had forecast orders rising 1.9 percent after a previously reported 0.8 percent fall in June. The Commerce Department report showed orders for transportation equipment jumped 14.8 percent in July, the largest increase since January, as demand for motor vehicles advanced 9.8 percent. That was the biggest gain since January 2003 and suggested that motor vehicle shortages caused by supply chain disruptions following the March earthquake in Japan were easing. Civilian aircraft orders soared 43.4 percent, unwinding the prior month’s 24 percent drop. Orders excluding transportation rose 0.9 percent in July after gaining 0.4 percent the prior month. Unfilled orders rose 0.8 percent after climbing 0.3 percent in June, suggesting factories will have to ramp-up production. Shipments increased 1.6 percent after rising 0.6 percent the prior month, while inventories increased 0.5 percent. That was up from June’s 0.4 percent increase.
9:29AM  :  ALERT: Treasuries and MBS Trade Better on Month-End Buying

Nothing major so far, unless you count the overnight news that BofA is exiting correspondent. The ADP news was a relative non-event and before that, mortgage apps showed a disappointing pull-back in refi volume. Even though stock futures have crested yesterday’s best levels, bond markets are still improved due to month end index buying. Quick refresher on that if you need it: a majority of fund managers adjust their allocations based on one of several bond market indexes (Barclays, Merrill, CIT). On the last day of the month, they often need to buy additional securities to keep pace with the index extensions and this can give a small boost to bonds at month end. All “that” is currently helping keep 10yr notes trading around 2.15, and MBS are in the green as well. Fannie 4.0’s are up 5 ticks at 104-01 and 3.5’s up 5 ticks at 101-04. Ginnie 3.5’s are at 102-23. Nice thing about month-end extension buying is that markets expect to see some come in at the end of the day as well, so traders will be hesitant to run bond markets into the red unless there’s a VERY convincing reason to do so based on economic data or an unexpected headline. Cruise control by default… Next data starts hitting at 945am with Chicago PMI.
8:25AM  :  ECON: Private Sector Adds 91k Jobs According to ADP

(Reuters) – The pace of U.S. private sector job growth slowed in August for the second month in a row with employers adding 91,000 positions, a report by a payrolls processor showed on Wednesday. Economists surveyed by Reuters had forecast the report would show a gain of 100,000 jobs. July’s private payrolls were revised down to an increase of 109,000 from the previously reported 114,000. The report is jointly developed with Macroeconomic Advisers LLC. The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment and is forecast to show the economy added 75,000 jobs in August. (Reporting by Leah Schnurr; Editing by Padraic Cassidy)
8:16AM  :  ALERT: BofA to Exit Correspondent Mortgage Business

(Reuters) – Bank of America Corp is looking to sell its correspondent mortgage business and the unit’s employees could be notified as soon as Wednesday, the Wall Street Journal said, citing people familiar with the matter.The bank had decided to exit the correspondent channel, which employs more than 1,000 people, because it no longer fits with the long-term strategy for its mortgage unit, the Journal said.Correspondents fund loans and sell them to larger lenders.The bank has used the correspondent channel to build origination volume and make money by re-selling the loans to other parties and then servicing them, the newspaper said.Loans purchased from correspondents accounted for 47 percent of Bank of America’s mortgage originations, or $27.4 billion, in the first quarter of 2011, the Journal said citing Inside Mortgage Finance.Bank of America could not immediately be reached by Reuters for comment outside regular U.S. business hours.The biggest U.S. bank plans to cut 3,500 jobs in the next few weeks, its Chief Executive Brian Moynihan had said in a memo to staff on August 18, as it tries to come to grips with $1 trillion of problem home mortgages.(Reporting by Sakthi Prasad in Bangalore; Editing by Vinu Pilakkott)
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard.
Brett Boyke  :  “we are one tapebomb away from sub 2, it wont take much since people are very skittish right now”
Matthew Graham  :  “2.17 to 2.6 if economic hope gains some steam or Euro crisis perception abate”
Matthew Graham  :  “I think a range between 2.06 and 2.4 is realistic in a bullish and.or economically weak scenario”
Gus Floropoulos  :  “I just feel 10’s will move back to 2.85-3.21 really fast”
Matthew Graham  :  “month-end buying later in the day could retest 2.14 easily”
Gus Floropoulos  :  “do u think 10’s at these levels are even realistic for the next 90 days?”
Matthew Graham  :  “but it may prove to be more important in the middle of the day”
Matthew Graham  :  “2.17 is clearly an important technical level”
Matthew Graham  :  “but I think that’s only because yields had dropped there already, ha!”
Matthew Graham  :  “I saw other analysts talking about 2.14 this AM”
Gus Floropoulos  :  “or is that too tight of a range”
Gus Floropoulos  :  “2.17 on 10’s perhaps”
Gus Floropoulos  :  “thats our support, wheres the resistance”
Matthew Graham  :  “FYI, 103-22 in 4.0s, 100-26 in 3.5’s, and 2.22 in 10yr yields all = significant pivot points over last 6 sessions (including higher volume sessions later last week), and all those levels mark today’s bounces”
Matthew Graham  :  “576k vs 146k, back month vs front month “
Gus Floropoulos  :  “the chart looks a lot more dramatic than it really is.”
Matthew Graham  :  “mostly roll trading gus”
Gus Floropoulos  :  “big volume this am?”
Matthew Graham  :  “RTRSToday 06:46 – CHICAGO PURCHASING MANAGEMENT EMPLOYMENT INDEX LOWEST SINCE DECEMBER 2009 “
Matthew Graham  :  “RTRS – CHICAGO PURCHASING MANAGEMENT INDEX LOWEST SINCE NOVEMBER 2009 “
Matthew Graham  :  “RTRS – CHICAGO PURCHASING MANAGEMENT PRODUCTION INDEX 57.8 IN AUGUST VS 64.3 IN JULY “
Matthew Graham  :  “RTRS – CHICAGO PMI EMPLOYMENT INDEX 52.1 IN AUGUST VS 51.5 IN JULY “
Matthew Graham  :  “RTRS – CHICAGO PURCHASING MANAGEMENT PRICES PAID INDEX 68.6 IN AUGUST VS 71.7 IN JULY “
Matthew Graham  :  “RTRS- CHICAGO PURCHASING MGMT NEW ORDERS INDEX 56.9 IN AUGUST VS 59.4 IN JULY “
Matthew Graham  :  “RTRS- CHICAGO PURCHASING MANAGEMENT INDEX 56.5 IN AUGUST (CONSENSUS 53.5) VS 58.8 IN JULY “

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[MND NewsWire] – MBA: Purchase Volume Remains Near 15-Year Lows

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MBA: Purchase Volume Remains Near 15-Year Lows

Posted to: MND NewsWire
Wednesday, August 31, 2011 9:28 AM

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Adecline in refinancing pushed the volume of mortgage applications lower duringthe week ended August 26 according to the Mortgage Bankers Association’s WeeklyMortgage Applications Survey.  The Survey’sMarket Composite Index which measures application volume was down 9.6 percenton a seasonally adjusted basis and 10 percent on an unadjusted basis from theprevious week while the Refinance Index dropped 12.2 percent.  The Purchase Index increased 0.9 percent on aseasonally adjusted basis but was down 1.3 percent unadjusted.  The Purchase Index is 8.2 percent lower thanit was one year ago.

Thefour-week moving averages rose for both the Market Index and the RefinanceIndex.  The two seasonally adjustedmeasures rose 2.5 percent and 4.2 percent respectively while the Purchase Indexdecreased 2.8 percent.  

Therefinancing share of mortgage volume slipped from the record high 79.8 percentof all applications established last week to 77.8 percent in the currentweek.  Adjustable rate mortgage activityincreased to 7.1 percent from 6.2 percent.

Theaverage contract interest rate for 30-year fixed-rate mortgages (FRM) droppedto 4.32 percent from 4.39 percent while points including the origination feeincreased from 0.88 to 1.30.  The averagerate for a 15-year FRM was down 7 basis points to 3.49 percent with pointsunchanged at 1.0.  The effective rate forthe 30-year FRM increased week-over-week while it decreased for the15-year.  All quotes are for 80 percentloan-to-value ratio loans.

“Accountingfor the increase in average points paid, effective mortgage rates were littlechanged last week.  Refinance application volume declined for a secondweek from recent highs, despite rates staying near a 10-month low, whilepurchase volume remained near 15-year lows,” said Mike Fratantoni, MBA’sVice President of Research and Economics.

The MBA surveycovers over 50 percent of all U.S. retail residential mortgage applications,and has been conducted weekly since 1990. Base period and value for all indexes is March 16, 1990=100.

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