[MND NewsWire] – Lenders Approving More Short Sales, Pricing Aggressively

Lenders Approving More Short Sales, Pricing Aggressively

Posted to: MND NewsWire
Thursday, May 31, 2012 7:31 AM

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Sales of distressed properties once again accounted for more than a quarter of all home sales during the first quarter of 2012.   Twenty-six percent of residential real estate sales during the quarter were of homes that were in some stage of foreclosure or bank-owned (REO).  This is up from 22 percent of sales in the fourth quarter of 2011 and a slight increase from the first quarter of 2011 when distressed properties held a 25 percent market share.

RealtyTrac, which released its first quarter Foreclosure Sales ReportTM Thursday morning, said that a total of 233,299 residential properties that were pre- or post-foreclosure sold during the quarter, an increase of 8 percent from the previous quarter and virtually unchanged from one year earlier.

Pre-foreclosures sales, usually short-sales in which the bank agrees to take less than the full payoff of the mortgage, increased 16 percent from the previous quarter and 25 percent on an annual basis.  There were a total of 109,521 pre-foreclosure sales during the quarter, the highest number since the first quarter of 2009, and they accounted for 12 percent of all sales during the quarter.  In the fourth quarter of 2011 these sales took a 10 percent market share and 9 percent one year earlier.  

Banks sold 123,778 homes out of their REO inventory during the quarter, a 2 percent increase from the fourth quarter but down 15 percent year-over-year.  REO sales accounted for 14 percent of all sales compared to 13 and 15 percent of sales in the previous periods.

“Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure – typically via short sale,” said Brandon Moore, chief executive officer of RealtyTrac. “Those pre-foreclosure sales hit a three-year high in the first quarter even as the average pre-foreclosure sales price dropped to a record low for our report. Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions.

“Meanwhile the average price of a bank-owned home is stabilizing and even increasing in some areas where a slowdown in REO activity over the past year has resulted in a restricted supply of REO homes available,” Moore continued. “Still, REO sales did increase on a quarterly basis in 21 states, indicating that lenders are still working through a bottleneck of unsold REO inventory in many areas.”

The average sales price of homes sold pre-foreclosure or out of ORE was $161,214, 1 percent lower than the previous quarter and down 2 percent on an annual basis.  This represented a discount of 27 percent from the average price of non-distressed properties, unchanged from the fourth quarter and down from a 29 percent discount a year earlier.

There was a significant difference between the average price paid pre-foreclosure and for REO.  The average pre-foreclosure or short-sale price was $175,461 compared to $147,995 for a bank-owned property.  The short sale price was down 4 percent from Quarter 4 and 10 percent from a year earlier and was the lowest average price for a short sale since RealtyTrac started tracking them in 2005.   The REO figure was essentially unchanged from the previous quarter and down only 2 percent on an annual basis.

Pre-foreclosure sales typically gave buyers a 21 percent discount from a market-priced home in the first quarter compared to 19 percent and 16 percent in the two earlier periods.  The discount for REO was 33 percent, down from 34 percent and 37 percent respectively.

It took a home that sold pre-foreclosure an average of 306 days to sell once the foreclosure process began compared to 256 days a year earlier.  REOs sold in an average of 178 days after completing the foreclosure process, an increase of less than half a week from the earlier periods.

Pre-foreclosure sales increased on an annual basis in 27 states with dramatic increases in several such as Wisconsin (94 percent), Michigan (81 percent), and Georgia (80 percent.)  REO sales were up in 21 states with Oregon (41 percent), North Carolina (23 percent), and Ohio (21 percent) showing the greatest year-over-year increases.

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[MBS Commentary] – The Day Ahead: Economic Data Ramps Up; Europe Still The Focus

The Day Ahead: Economic Data Ramps Up; Europe Still The Focus

Posted to: MBS Commentary
Wednesday, May 30, 2012 11:21 PM

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Wednesday was quite a day for bond markets–a record-setting day on many fronts.  While we can appreciate that there are some claims that 10yr Yields have been lower (like this one) and other long term charts that tell a different story (like this one), we’re more than content thinking and saying that 10yr yields hit an all time low yesterday.  Not only that, but they crushed the previous low of 1.674, moving down to 1.61.  Some folks have been entertaining the possibility of things moving lower, potentially hitting a 1.5% milestone.  Articles and video clips on WSJ, Bloomberg, CNBC, etc. have been making the rounds for the past 2 weeks re: 1.5%, but of course, THESE possibilities are nothing new.

MBS eked out some record levels as well, but the victory was rather lackluster compared to our big brother Treasuries.  When all was said and done, Fannie 3.5’s notched up to 104-26+ vs a previous high of 104-24+.  Bid yields dropped 0.0105% from a previous record low of 2.9462 2.9357% while Treasuries fell 6 times further (change in 10yr record divided by change in MBS record =  6.095x).

No one knows whether or not things will continue heading in the prevailing direction, so we watch and wait.  Europe continues to dominate in that regard.  More simply: that’s what we’re watching first as the European situation has so overwhelmingly dominated the race to determine what’s moving markets.  That’s frustrating because, frankly, it’s not nearly as easy to dissect European events and extrapolate their market moving suggestions as it is to look at good old-fashioned domestic economic data ‘meeting, beating, or missing’ and deduce a logical and linear movement based on the size of the deviation from expectations and the overall importance of the report.

But even though we give Europe the right of way, domestic economic data increases its presence on the road today (like a bicyclist in a tractor trailer’s blind spot perhaps?).  Due to the shortened week, we’ll get ADP employment this morning as opposed to it’s normal Wednesday release.  It’s preceded by the less important Challenger Layoffs report and followed by Jobless Claims, Preliminary GDP for Q1 and Corporate Profits all at 8:30am.  Chicago PMI waltzes in at a “time to go home yet?” 9:45am, but still matters in the same way most of the domestic data matters: in the sense that it accompanies the preeminent member of its cohort: Friday’s NFP, collectively creating the possibility of shifting sentiments in the June FOMC Announcement.  

 

MBS Live Econ Calendar:

Week Of Tue, May 29 2012 – Fri, Jun 1 2012

Time

Event

Period

Unit

Forecast

Prior

Actual

Tue, May 29

08:30

Midwest manufacturing

Apr

92.2

94.2

09:00

CaseShiller 20 mm SA

Mar

%

0.0

0.2

+0.1

09:00

CaseShiller 20 mm nsa

Mar

%

-0.2

-0.8

0.0

09:00

CaseShiller 20 yy

Mar

%

-2.9

-3.5

-2.6

10:00

Consumer confidence

May

70.0

69.2

64.9

Wed, May 30

07:00

Mortgage market index

w/e

804.9

794.7

07:00

Mortgage refinance index

w/e

4456.4

4388.8

10:00

Pending sales change mm

Apr

%

+0.1

+4.1

-5.5

10:00

Pending homes index

Apr

101.4

95.5

Thu, May 31

07:30

Challenger Layoffs

May

k

40,559

08:15

ADP Employment

May

k

+148

+119

08:30

Initial Jobless Claims

w/e

k

370k

370k

08:30

Continued jobless claims

w/e

ml

3.25

3.26

08:30

Corporate Profits

Q1-Adv

%

+1.1

+1.1

08:30

Real GDP qq SA

Q1-Pre

%

+1.9

+2.2

09:45

Chicago PMI

May

56.5

56.2

Fri, Jun 1

08:30

Personal consump real mm

Apr

%

+0.3

+0.3

08:30

Personal income mm

Apr

%

+0.3

+0.4

08:30

Non-farm payrolls

May

k

+150

+115

08:30

Unemployment rate mm

May

%

8.1

8.1

10:00

Construction spending

Apr

%

+0.4

+0.1

10:00

ISM Manufacturing PMI

May

53.9

54.8

* mm: monthly | yy: annual | qq: quarterly | “w/e” in “period” column indicates a weekly report

* Q1: First Quarter | Adv: Advance Release | Pre: Preliminary Release | Fin: Final Release

* (n)SA: (non) Seasonally Adjusted

* PMI: “Purchasing Managers Index”

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Mortgage Rates Reluctantly Lower Despite Plummeting Treasuries

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May 30, 2012 3:17PM

Mortgage Rates Reluctantly Lower Despite Plummeting Treasuries

Mortgage Rates improved only slightly today despite an aggressive interest rate drop in the broader bond markets. Lenders’ rate sheet offerings are CLOSE but not quite back to their May 17-18 levels which were the best on record. Best-Execution rate for 30yr Fixed Conventional loans was unchanged at 3.75% with the variations in rates vs yesterday being seen in the form of lower closing costs (or higher lender credits, depending on your scenario). (Read More: What is A Best-Execution Mortgage Rate…

May 30, 2012 11:13AM

David Stevens Leaves MBA to Take Position as President of SunTrust Mortgage

Only slightly more than a year after joining the Mortgage Bankers Association as its President and CEO, David Stevens will leave to become President of SunTrust Mortgage, Inc . Stevens will join SunTrust effective July 16 and will be responsible for day-to-day business operations of the company. His new position will report to the bank’s CEO Jerome Lienhard. In announcing the departure of Stevens, MBA said it has already begun a search for his replacement. In the interim, Marcia M. Davies , MBA’s…

Micro News

2:43 PM:

Ongoing Potential, But Limited Incentive For Positive Reprices

11:57 AM:

Pain Trade Continues Grinding Yields Lower, MBS Ground Into Ceiling

10:14 AM:

MBA Announces David H. Stevens to Leave Association

10:12 AM:

SunTrust Names Mortgage Industry Veteran David Stevens to New Role as President

10:00 AM:

NAR: Pending Home Decline in April but Up Strongly From a Year Ago

9:14 AM:

EU Events Catalyze Big Rally Overnight, Holding For Now

8:08 AM:

MBA: Mortgage Applications Fall 1.3%

8:07 AM:

MBA: Mortgage Rates Drop to New Survey Lows

Around the Web

Video News

The Fed’s Role in the US Markets

Homebuyer Interest In Foreclosures Jumped

Al Lewis: Banks Can Default, But Customer Can’t

Today’s Comments

Stan Brody

“Forgive me… “POST CRISIS… my ass… the crisis has been ongoing for some five years… Dr. Shiller and Mr. Case still do not “get it”…”

Ted Rood

“Fundamentals haven’t changed and won’t soon, but the Fed’s intervention in the securities markets (Operation Twist) is scheduled to end in…”

scot shumway

“I find this post slightly amusing actually. There is nothing unconstitutional or illegal about requiring fingerprints for a position (verified by 2 constitutional…”

Today’s Q&A

“Can a loan officer be employed by two or more brokes in arizona?”

“Can I have a co-signer when I refinance to get someone else’s name off a mortgage?”

“Is my name on a mortgage”

<!–

Today’s Forum Discussions

AP

“Hi. I took an FHA loan for $340000 (30 yr fixed FHA) which closed in end of July 2009 @5.125% which I then refinanced in 2009 to a lower rate of 4.75%…”

Ted Rood

“Loan Scenario View All Post A Scenario Loan State: Washington Loan County: — Loan Type: Refinance (Rate and Term) Loan Amount: $280,000 Property Value…”

Dan Burke

“Loan Scenario View All Post A Scenario Loan State: California Loan County: Los Angeles Loan Type: Refinance (Rate and Term) Loan Amount: $460,000 Property…”

–>

[MBS Commentary] – MBS RECAP: New Record Levels For MBS And Treasuries

MBS RECAP: New Record Levels For MBS And Treasuries

Posted to: MBS Commentary
Wednesday, May 30, 2012 4:06 PM

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MBS Live: MBS Afternoon Market Summary
While “record levels” for MBS have been a relatively common occurrence in the past month as Fannie 3.5’s have progressively taken baby steps into higher and higher territory, 10yr Treasuries hadn’t yet taken out the 9/26/11 “record level” until today. And they obliterated it, falling to 1.617 at the lowest point of the day and not far from that presently, in the low 1.62’s. German Bunds laugh at those “high” US Treasury yields, themselves having traded down to the low 1.26’s today. Yes, Fannie 3.0 production is ramping up currently, and structurally, rates have room to improve. Several lenders repriced positively today, but just as MBS gains pale in comparison to Treasury gains, so too do rate sheet improvements fall short of MBS Price improvements. Diminishing returns at current levels…

On another note, don’t forget that tomorrow begins the two “data-packed” days of the week, though Friday remains the biggie with NFP. Tomorrow is no slouch, however, and although it was easy to lose sight of domestic concerns today, they could be back in the picture tomorrow.

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

FNMA 3.5
104-26 : +0-16
FNMA 4.0
106-12 : +0-10
FNMA 4.5
107-07 : +0-05
FNMA 5.0
108-12 : +0-03
GNMA 3.5
106-16 : +0-16
GNMA 4.0
109-05 : +0-10
GNMA 4.5
109-23 : +0-05
GNMA 5.0
110-20 : +0-03
FHLMC 3.5
104-19 : +0-16
FHLMC 4.0
106-00 : +0-09
FHLMC 4.5
106-24 : +0-05
FHLMC 5.0
107-21 : +0-02
Pricing as of 4:05 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

2:43PM  :  ALERT ISSUED: Ongoing Potential, But Limited Incentive For Positive Reprices

What a world… MBS are at all-time highs, up about half a point on the day, and rate sheets aren’t even a quarter of a point up on the day. MBS continue protesting: “this is all so… so sudden,” and would probably appreciate a slower pace in the flight-to-safety rally. Even now, 10yr yields have gone flat to slightly higher since noon, and MBS have outperformed.

Ledges of benchmark stability provide footholds for MBS .

One notable reprice so far today, and despite the “limited incentive” environment, positive reprices are possible. We’d also warn that some lenders have a knack for negative reprices near the end of days like today for “pipeline control” reasons. We don’t have any insider information in that regard, but just something to keep in mind if the lender in question is prone to such things.

Fannie 3.5’s are in line with all time highs at 104-24. Fannie 3.0’s have enough volume to mention, and are up 21 ticks on the day at 102-07. 10yr TSYs are down almost 12 bps at 1.6288. The Euro is in freefall, down to 1.238 now, German 10yr TSYs (Bunds) at 1.27.

11:57AM  :  Pain Trade Continues Grinding Yields Lower, MBS Ground Into Ceiling

Remember when 10yr yields hit 2.40-ish just over two months ago? Then remember when there was some uncertainty as to whether or not the 2.10-1.90 range was a thing of the past just before 10’s broke from over 2.2 to under 2.1 in less than an hour? Pain Trade…

Remember when markets tentatively defended a 1.90% floor in 10yr yields in late April/early May, then retreated to defending the 1.80% floor as a “selling opportunity,” only to have a bounce higher from 1.80% look like a good call for about 1 session before falling below 1.80% and never really making it back above, thus gently shattering the conceptions of a broader long-standing 1.80-2.10% range? Pain Trade…

Most recently, do you remember how 1.674 was the previous record low (not counting economic prehistory in the 50’s, yes, we know) from 9/26/11 and that “surely,” if 10’s somehow magically approached 1.674 that it would be another great selling opportunity? And remember how we’ve seen 10yr yields give a half-hearted attempt at a bounce at 1.674 heading into 9am this morning an how we’ve since ratcheted lower, eventually grinding our way to a new low of 1.627 and current yields in the 1.63’s? PAIN TRADE!

Maybe the reason that Treasuries keep acting to prove as many people wrong as possible is that folks are still thinking of them as Treasuries as opposed to how they actually end up trading: as “Diet Bunds.” In other words, UST’s are all about the spillover effect from European Benchmark debt. In that context, things aren’t so painful. The real pain is in watching production MBS with little incentive to move higher from either the primary or secondary markets continue to grind into the ceiling near their all-time highs. For all the gains seen in Treasuries, MBS STILL aren’t back to their mid-May highs… THAT’S painful (not the sort of pain we’d really complain about considering we’re looking at all-time low rates, but still!). There are some charts showing how the two stack up in the MBS MID-DAY, if you missed it:

Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard’s Live Chat feature, utilized by hundreds of industry professionals each day.

Gus Floropoulos  :  REPRICE: 4:02 PM – PHH Better
Victor Burek  :  REPRICE: 3:51 PM – Nexbank Better
Michael Tadros  :  REPRICE: 3:33 PM – Provident Funding Better
Adam Quinones  :  “it’s happening for a number of reasons but lower rates won’t help”
Adam Quinones  :  “mandatory adjusters are massive”
Adam Quinones  :  “that is the main reason most LOs think Secondary is “Stealing” loan pricing”
Adam Quinones  :  “(more)”
Adam Quinones  :  “servicing would get hammered!”
Ira Selwin  :  “Imagine what below 3.25 would look like. scary stuff”
Jason Harris  :  “Thanks…makes me feel better”
Ira Selwin  :  “Just look at your price difference between 3.75 and 3.625. Still showing a big buydown”
Matthew Graham  :  “not to say someone wouldn’t portfolio it, but 3.25 is the new 3.75 from a secondary market liquidity standpoint, at least for now.”
Matthew Graham  :  “below that implies 2.5 coupons”
Jason Harris  :  “are you guys able to do better than 3.25% FHA? Not on my rate sheet below that but getting big rebate”
Tom Schwab  :  REPRICE: 3:06 PM – Franklin American Better
Brent Borcherding  :  REPRICE: 3:05 PM – USBank Better
Dan Clifton  :  REPRICE: 3:04 PM – NYCB Better
Matt Hodges  :  “WF approx .25% better”
Clayton Sandy  :  REPRICE: 1:58 PM – Wells Fargo Better
Matt Hodges  :  “our turn time has doubled”
Matthew Graham  :  “”room” to reprice, but “incentive?” Anyone have any anecdotes to share about how capacity issues or how busy certain lenders are?”
Andy Pada  :  “This morning rates were definitely not as as good as 5/17-18, but live pricing now is at least 15 – 18 bps better”
Matthew Graham  :  “feel free to infer a “?” at the end of that last chat if you wholeheartedly disagree.”
Matthew Graham  :  “starting to review rate sheet data for consumer post and it’s looking like we’re not quite back to 5/17 – 5/18 rate sheets based on what I’ve seen so far, but improved on the day.”
Andy Pada  :  “Have to lock in freddie more than 30 days because they don’t allow you to extend”
Andy Pada  :  “Exactly”
Matthew Graham  :  “104-22 is the new 103-22?”
Andy Pada  :  “Locking in 30 – 40 day”
Jason Adams  :  “Its a slow week in my office. It always seems to be slow this time of year as kids get out of school “
Ted Rood  :  “Seems like MBS’s often lag behind treasuries on days treasuries make huge moves. At this point I think it’s all about Europe, doubt jobs # will be a big mover unless ridiculously good or bad.”
Jay Rafuse  :  “so, is the not so generous rate environment today (even with a plummeting 10 yr yield) a function of hedging against Friday’s number perhaps?”
Jason York  :  “not as much interest on 15yr coupons, which is why they don’t move as much”
MMNJ  :  “30’s are scorching yet the 15’s are barely moving…..very interesting”
Matt Devine  :  “no they wont charles. 1% i believe is the max they will allow”
Charles Beasley  :  “Does anyone know if FHA will allow a 3% deductable on the homeowners insurance policy?”
Matthew Graham  :  “volatility into the EU bond market close. EUR= hitting fresh lows as well”
Matthew Graham  :  “must not be a lot of sellers out there”
Matthew Graham  :  “50% takedown is big. usually runs 25-40% Rare to see above 40%”
Matthew Graham  :  “RTRS – DEALERS SUBMITTED $9.42 BLN OF TREASURIES FOR CONSIDERATION IN FED PURCHASE -NY FED “
Matthew Graham  :  “RTRS – FED BOUGHT $4.74 BILLION OF TREASURIES MATURING BETWEEN AUG 2020 AND FEB 2022 -NY FED “

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[Mortgage Rate Watch] – Mortgage Rates Reluctantly Lower Despite Plummeting Treasuries

Mortgage Rates Reluctantly Lower Despite Plummeting Treasuries

Posted to: Mortgage Rate Watch
Wednesday, May 30, 2012 3:17 PM

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Mortgage Rates improved only slightly today despite an aggressive interest rate drop in the broader bond markets.  Lenders’ rate sheet offerings are CLOSE but not quite back to their May 17-18 levels which were the best on record.  Best-Execution rate for 30yr Fixed Conventional loans was unchanged at 3.75% with the variations in rates vs yesterday being seen in the form of lower closing costs (or higher lender credits, depending on your scenario).

(Read More: What is A Best-Execution Mortgage Rate? )

(Get Caught Up With: Friday’s Post)

As has been the case, the domestic interest rate landscape is chiefly affected by events in Europe, where fears of a systemic sovereign credit failure continue to push the Euro to it’s lowest levels in nearly 2 years.  While the peripheral countries experience rising rates, Europe’s most stable economy, Germany, sees it’s 10yr government debt fall to all time lows day after day.  

US Treasuries are merely “along for the ride,” benefiting from spillover jlgysafe-haven” demand.  When we, as individual consumers in the US want to keep money reasonably safe, we can just put it in the bank, but the amount of money that changes hands in the capital markets isn’t conducive to a stop off at the local ATM.  By the time a nominal rate of inflation is taken into account, investors are actually PAYING a small amount of interest to keep their money safe.  

There are other factors pushing and pulling on rates markets, but the bottom line is that Europe is the epicenter of the crisis.  US Treasuries are another degree removed, and further down the line, we have Mortgage-Backed-Securities and ultimately mortgage rates that experience what started out as a “big wave” in Europe, subside to mere ripples by the time the effects on lenders’ rate sheets are seen.  We’ve discussed this general phenomenon more extensively in the past (read more: HERE)

Ongoing Guidance: We’d continue to advocate not trying to “get ahead” of current market movements as a high degree of uncertainty is pervasive.  While it’s a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that “otherwise would be” part is very much a moving target.  Best bet is to focus on the fact that rates are at their all time lows, and with very close to their all-time low borrowing costs.  Add in the fact that progress has always been increasingly difficult from current levels and risk vs reward for floating vs locking looks a bit larger than we’d like, but not out of the question for those who understand the risks and have an exit strategy if things don’t go their way.

Loan Originator Perspective With Rates At All Time Lows

Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc

Lenders are tapped out, and and don’t have much room to give more. So when see rally’s like we have today, with the 10yr Treasury at 1.63, you would expect rates to follow suit, but they are slightly better than they were yesterday. I think we will need at least several days staying consistently at these levels before you start to see a larger move by lenders.

Victor Burek Mortgage Planner,  Benchmark Mortgage

Despite the healthy gains with mortgage backed securities, lenders are being quite conservative with passing along the gains. In a way, they are trying to slow down submissions of new loans. We have seen this pattern of behavior before. Don’t be surprised if lenders worsen rate sheets in the coming days due to heavy locks. I would recommend if under 30 days to closing to go ahead and lock now. I would definitely float loans closing in over 30 days as that will allow time for some of the loans to clear through the system.

Bob Van Gilder, Originator, FinanceOne

Big rally in MBS land and 10 yr Treasury. Not much improvement, if any, on mortgage rates. Gotta go with, “If you like what you’re being offered, go with it.”
Rates may improve, but will certainly, go up (at some point).

Ted Rood, Senior Mortgage Consultant,  Wintrust Mortgage

Rates continue to improve as European doubts loom. Pricing is capped, however, by lenders’ capacity to process loans. One loan I was floating overnight only gained about $200 improvement in pricing, nice to get it, but not as much as expected.

Julian Hebron, Branch Manager, Loan Agent,  RPM Mortgage

Today is a lock day. This is the type of day that I’ve been discussing: the true rate lows come and go in minutes as Eurozone debt contagion drives global investors into U.S. Treasuries and mortgage bonds (MBS). It’s not to say these kinds of days won’t come again, but with this much global market uncertainty, you take the lows when they come.  One other CRITICAL point: Rates on conforming loans to $417k (and high limit conforming to $625,500 by county) are what move throughout each day as MBS trade. Jumbo loans don’t move with the markets in this manner because they’re not securitized in the same way (and are mostly not securitized at all), so jumbos are priced more by lenders than by mortgage bond market forces. Jumbos are steady today, and could see slight improvement if a rally like this held for 3-5 days.  And finally, if you are locking a loan right now, make sure you read the Refi Roadmap so you know what to expect.

Matt Hodges, Loan Officer,  Presidential Mortgage Group

As a loan officer, you try to provide accurate guidance on movement of and risk tolerance involved with locking/floating interest rates. This is not a science, but an art based on years of data and experience. Given where we are today at record lows, a lock for anyone within 30 days of closing is wise – remember we lose much quicker than we gain. Past that time frame it comes down to risk tolerance of the client. Even as the 10 year Treasury pushes to record low yields and mortgage backed securities push to record high pricing, there is resistance to lower rates. Lenders fear EPOs – early payoff penalties that investors have written into contracts. We may see truly lower rates, but not while demand for refinancing and purchasing remains relatively high.

Brett Boyke, Senior Mortgage Banker, Wintrust Mortgage

The large drop in the 10YR yield has not translated to a move down in mortgage rates at this point. With the Non Farm Payroll report coming on Friday, I think lenders are comfortable in being conservative at this point in the week.

Brent Borcherding, Loan Officer,  Capital M Lending

If you’re looking for a compelling case on why to float, it’s simple, but by no way guaranteed! Lenders haven’t passed on the gains due to a surplus in business and inability to handle a further increase in volume, so there is the obvious potential for improvement over time even if everything else stays as is. Additionally, all of us have heard and lived this long enough that it is hard to imagine that rates could go any lower, after all “this is the lowest rates have ever been”. If you remove that bias, and look at the prevailing news and global dilemmas, momentum appears to be moving in the direction of lower rates.  Is it risky to bet on such a thing?  Sure!  But that doesn’t mean it couldn’t happen.

Today’s BEST-EXECUTION Rates 

  • 30YR FIXED –  3.75%
  • FHA/VA -3.75%
  • 15 YEAR FIXED –  3.125 edging down to 3.00%
  • 5 YEAR ARMS –  2.625-3. 25% depending on the lender

Ongoing Lock/Float Considerations 

  • Rates and costs continue to operate near all time best levels
  • Current levels have experienced increasing resistance in improving much from here
  • Rates could easily move higher or lower, but given the nearness to all time lows, there’s generally more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn’t always mean they’re done improving.
  • (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

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[MBS Commentary] – MBS MID-DAY: Clawing At All-Time Highs While Treasuries Have It Easy

MBS MID-DAY: Clawing At All-Time Highs While Treasuries Have It Easy

Posted to: MBS Commentary
Wednesday, May 30, 2012 11:06 AM

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MBS Live: MBS Morning Market Summary
MBS and, to a greater extent, Treasuries have been off to the races this morning where the latter is currently trading into the 1.63’s–record territory within the scope of modern economic history, and largely driven by the record low yields in EU Benchmark German Bunds hitting record lows as well (currently under 1.27%).  This has created a clearly defined “triangle breakout” for 10yr US Treasuries on the chart of the converging trends that we’ve presented on a few occasions:
 
MBS, on the other hand, are just barely clawing their way back to previous all-time highs.  Considering that they’re closer to delivery now than they were when they previously hit all-time highs, the fact that this looks like a challenge for them is very telling:
MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

FNMA 3.5
104-20 : +0-11
FNMA 4.0
106-09 : +0-07
FNMA 4.5
107-06 : +0-03
FNMA 5.0
108-11 : +0-02
GNMA 3.5
106-13 : +0-13
GNMA 4.0
109-03 : +0-09
GNMA 4.5
109-23 : +0-05
GNMA 5.0
110-19 : +0-02
FHLMC 3.5
104-14 : +0-11
FHLMC 4.0
105-29 : +0-06
FHLMC 4.5
106-23 : +0-04
FHLMC 5.0
107-22 : +0-02
Pricing as of 11:05 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.

10:14AM  :  MBA Announces David H. Stevens to Leave Association

Washington, DC (May 30, 2012)– The Mortgage Bankers Association (MBA) today announced that David H. Stevens, the association’s President and CEO, will be leaving the organization effective June 30, 2012. SunTrust Bank, a long-standing and active member of MBA, has announced that it has hired Stevens to be President of SunTrust Mortgage.

“Dave has been an exceptional leader for MBA,” said MBA Chairman Michael Young. “Although we are sorry to see him leave so soon, he leaves us well-positioned for the future. Dave delivered on his pledge to enhance MBA’s position as the industry’s leading voice in advocacy, policy, education and research and has developed a dynamic infrastructure for addressing member needs.

“His insights and leadership have demonstrated the importance of having one large platform where the entire industry can come together in an effort to provide a common voice on the critical issues of the day.” Young continued. “The MBA, its leadership and members remain steadfast in our focus to bring solutions that will benefit the entire housing market, borrowers and lenders alike.”

“MBA is nearly 100 years old and has gone through many changes. I am confident that our Board of Directors will ensure a smooth transition and select the best possible successor.” said Debra Still, MBA’s Chairman-elect.

Stevens was hired in May, 2011 after leaving his position as Assistant Secretary for Housing and Commissioner of the Federal Housing Administration at the US Department of Housing and Urban Development. Prior to HUD, Stevens held senior executive positions in the real estate and mortgage finance sectors.

Young announced that Chief of Staff and Senior Vice President, Marcia M. Davies, has been designated to be the interim head of the association pending the replacement of Mr. Stevens. A search for a permanent replacement is already underway.

10:12AM  :  SunTrust Names Mortgage Industry Veteran David Stevens to New Role as President

TLANTA, May 30, 2012 /PRNewswire/ — SunTrust Banks, Inc., (NYSE: STI) announced today that David Stevens, currently President and CEO of the Mortgage Bankers Association (MBA), will join the Company as President of SunTrust Mortgage, Inc., effective July 16, 2012. He will assume responsibility for the day-to-day operations of the business, including sales, production, fulfillment, and mortgage capital markets, and report to SunTrust Mortgage CEO Jerome Lienhard.

Mr. Stevens, 55, will be based in Washington, D.C., and maintain offices in both Washington and Richmond, Va., where SunTrust Mortgage has a significant corporate presence.

“David Stevens is a high-caliber leader, professional and individual,” said Mr. Lienhard. “His subject matter knowledge and leadership abilities are well known, as is his tireless commitment to our industry. I am personally delighted to welcome such a well-respected colleague to our business and look forward to the transformational change he will drive.”

A graduate of the University of Colorado at Boulder, Mr. Stevens brings more than 25 years of professional experience from the banking, real estate and insurance industries, as well as the public sector. Prior to his role leading the MBA, he was Assistant Secretary and Federal Housing Administration Commissioner at HUD (Housing & Urban Development). Previously, he served as President and Chief Operating Officer of The Long & Foster Companies – the nation’s largest privately held real estate company – and Executive Vice President and National Wholesale Manager at Wells Fargo. He began his professional career as a loan officer with World Savings. Source: PR Newswire (http://s.tt/1d0fM)

10:00AM  :  NAR: Pending Home Decline in April but Up Strongly From a Year Ago

“Pending home sales retrenched in April following three consecutive monthly gains, but are notably higher than a year ago, according to the National Association of RealtorsÒ. The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said a one-month setback in light of many months of gains does not change the fundamentally improving housing market conditions. “Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” he said…”

9:14AM  :  ALERT ISSUED: EU Events Catalyze Big Rally Overnight, Holding For Now

1.674% was the lowest intraday tick seen in 10yr yields back on 9/23/11. Then about half an hour ago we hit 1.673%–record lows within the scope of modern economic history. 10’s keep inching into record territory, currently at 1.6628 while Fannie 3.5’s are up 9 ticks at 104-19.

10yr yields had declined steadily overnight, helped along by poor auctions in Italy and the ECB’s refusal to take part in Spain’s bank recapitalization plan. Yields bounced higher around the EU Commission’s 7am wire that said the ESM “might be envisaged” as being used to recapitalize banks and that the EZ should move towards a banking union, but the slide was soon back on hitting a very stark technical pivot point just under 1.71.

Even then, Treasuries aren’t moving of their own volition, but rather, are simply strapped firmly to EU Benchmarks this morning. MBS are trying to stay caught up, but can’t even manage to regain mid-May highs in the low 104-20’s. Disconnection… Frustration… But not surprising.

The most recent move down comes after the EU’s Ollie Rehn said that the EU was ready to extend Spanish budget deadlines for another year, almost like a groundhog seeing his shadow and reminding lookers-on that there could be x amount of additional weeks of winter. Like we postulated, today looked to be a good day for European headline-watching and so far, that’s where we are. Pending Home Sales will be released at 10am Eastern, but that seems like the least of the markets’ concerns at the moment.

8:08AM  :  MBA: Mortgage Applications Fall 1.3%

“Mortgage applications decreased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 25, 2012. This week’s results do not include an adjustment for early closings on Friday before the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.6 percent compared with the previous week. The Refinance Index decreased 1.5 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.6 percent from one week earlier. The unadjusted Purchase Index decreased 1.8 percent compared with the previous week and was 3.9 percent lower than the same week one year ago…”

8:07AM  :  MBA: Mortgage Rates Drop to New Survey Lows

“The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.91 percent, the lowest rate in the history of the survey, from 3.93 percent, with points increasing to 0.46 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.23 percent from 4.25 percent, with points decreasing to 0.40 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week…”

Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard’s Live Chat feature, utilized by hundreds of industry professionals each day.

Adam Quinones  :  “~20% of orig at the moment”
Jason Wilborn  :  “any liquidity in the 3.0 yet”
Matthew Graham  :  “RTRS – SUNTRUST NAMES MORTGAGE INDUSTRY VETERAN DAVID STEVENS TO NEW ROLE AS PRESIDENT, SUNTRUST MORTGAGE, INC. “
Matthew Graham  :  “incidentally, 95.5 isn’t out of line with a trend of improvement, just a pull-back from a bullish March reading. I would’t take too much offense”
Matt Hodges  :  “that’s not what i’m seeing, mg. ton of april contracts written”
Matthew Graham  :  “RTRS- U.S. APRIL PENDING HOME SALES INDEX -5.5 PCT (CONSENSUS +0.1 PCT) TO 95.5 – REALTORS “
Matthew Graham  :  “it’s nothing spectacular, but more than it was, still not anywhere close to 3.5’s”
Gus Floropoulos  :  “hey MG, hows volume on that 3 buddy”
Adam Quinones  :  “short covering!”
Matthew Graham  :  “there’s a tactical component helping push this thing lower in addition to the flight-to-safety / panic bid”
Brent Borcherding  :  “Not looking for “return on investment, but return OF investment.””
Matthew Graham  :  “I think the folks buying at these yields are jumping on the bandwagon trying to force the ECB’s hand.”
Dean Gorenflo  :  “capital preservation”
Matthew Graham  :  “I have Bunds/Tsys overlaid in Eikon right now as one of my default views and it’s like watching synchronized swimming”
Victor Burek  :  “safety”
Gus Floropoulos  :  “why would one buy at these yields?”
Matthew Graham  :  “Bunds just hit 1.298”
Matthew Graham  :  “9/26/11”
Matthew Graham  :  “yes”
Patrick Waldron  :  “1.674 was the “recent” historical low for the 10YR right?”
Jeff Anderson  :  “1.6849! Happy Hump Day!”

Read what our user’s have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.

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[MND NewsWire] – David Stevens Leaves MBA to Take Position as President of SunTrust Mortgage

David Stevens Leaves MBA to Take Position as President of SunTrust Mortgage

Posted to: MND NewsWire
Wednesday, May 30, 2012 11:03 AM

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Only slightly more than a year after joining the Mortgage Bankers Association as its President and CEO, David Stevens will leave to become President of SunTrust Mortgage, Inc.  Stevens will join SunTrust effective July 16 and will be responsible for day-to-day business operations of the company.  His new position will report to the bank’s CEO Jerome Lienhard.

In announcing the departure of Stevens, MBA said it has already begun a search for his replacement.  In the interim, Marcia M. Davies, MBA’s Chief of Staff and Senior Vice President will assume Stevens’ responsibilities.

Stevens joined MBA in May 2011 after serving as Assistant Secretary of Housing and Urban Development and Commissioner of the Federal Housing Administration (FHA).  At that time, confronting potential charges of conflicts of interest, Stevens announced he would recuse himself from working on any MBA issues involving that agency.

SunTrust Mortgage, Inc. is a wholly-owned subsidiary of SunTrust Banks which has total assets of $178.2 billion and total deposits of $130.0 billion.  The bank is based in Atlanta but Stevens will be headquartered in Washington, DC. 

“Dave has been an exceptional leader for MBA,” said MBA Chairman Michael Young.  “Although we are sorry to see him leave so soon, he leaves us well-positioned for the future.  Dave delivered on his pledge to enhance MBA’s position as the industry’s leading voice in advocacy, policy, education and research and has developed a dynamic infrastructure for addressing member needs.  

“His insights and leadership have demonstrated the importance of having one large platform where the entire industry can come together in an effort to provide a common voice on the critical issues of the day.” Young continued.  “The MBA, its leadership and members remain steadfast in our focus to bring solutions that will benefit the entire housing market, borrowers and lenders alike.”     

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[Pipeline Press] – Organizations React to CFPB Compensation Proposals; MBA’s Revised 2012 Estimates; QM Update; 10-yr Hits 1.68%

Organizations React to CFPB Compensation Proposals; MBA’s Revised 2012 Estimates; QM Update; 10-yr Hits 1.68%

Posted to: Pipeline Press
Wednesday, May 30, 2012 8:46 AM

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Hey, not every prediction about the future is right, right? In my visits around the nation to different companies and mortgage banking groups, I continue to hear very positive things about volume and profits. And sure enough, the MBA has come out with a “new and improved” volume scenario for 2012, including raising refi volume predictions to $870 billion up from the $400 billion estimate last summer. (Now, if only companies could focus on margins instead of volumes.)  (Read: MBA Hikes 2012 Origination Forecast by $200 Billion)

And several firms are looking to capture their share of the market by adding staff:

I have been retained by an established, independent retail mortgage banker based in Northern California is looking to fill a senior finance position. The candidate would be well versed in all aspects of mortgage banking accounting including servicing, financial analysis, and cash modeling. Several years of experience in the industry, a B.S. in accounting, along with strong team player skills are highly recommended. The company is originating $2 billion per year with a footprint west of the Rockies. If you know someone who might be interested in this opportunity with a good company, please have them contact me at rchrisman@robchrisman .com.

Informative Research is looking to fill two sales positions. One of the opportunities will be in Southern California and the other will concentrate on national strategic accounts, and the ideal candidates will have extensive contacts in the industry and who can make an immediate impact. “The genuine team culture and underlying family company values make Informative Research a great place to work.” The company has been in business for 66 years, providing settlement services and risk solutions to brokers, bankers, and servicers nationwide: informativeresearch .com. Resumes should be sent to John LaBriola, EVP of Sales, at johnl@informativeresearch .com.

And on the other side of the nation, PRMG has immediate openings for operations, underwriting and sales people to serve the New England territory after announcing the expansion of its wholesale operations into the Northeastern United States region. PRMG’s new Regional Manager, Brian Burke will be responsible for recruiting and developing a strong presence in the New England territory, while overseeing a full service fulfillment operations center that will be underwriting and funding locally, including generating business in the states of Maine, Connecticut, Vermont, Massachusetts, Delaware, New Hampshire, and Rhode Island. Since 2001, “Built by originators for originators”, PRMG (www.prmg.net) has been ranked as the #1 independently owned FHA lender by the Santa Ana, CA HOC center. Please send resumes to Brian Burke at bburke@PRMG .NET.

Remember when S&P downgraded the United States – did our stock market plunge, or borrowing costs skyrocket? The traditional question is, “Do rating agencies move the market, or reflect news that the markets already know?Bloomberg notes the diminishing impact that rating agencies have with investors, and as we know in the mortgage business, Moody’s, S&P’s, and Fitch’s miss-rating of residential MBS’s helped contribute to investor’s nervousness.

That being said, newer rating agencies have emerged with “new and improved” business models. For example, the “corporate investigation agency” Kroll Bond Rating is expanding its reach through affiliations, investments, and acquisitions. The agency’s priority at present is to develop its overseas operations, with plans to rate European banks and asset-backed deals by the end of 2013. And a few years back Kroll acquired Lace Financial, one of very few credit-rating firms registered with the SEC, which makes it easier for issuers and investors to use a firm’s ratings. Kroll now holds more than 8.7% of the market share for US commercial-mortgaged backed deals.

What is new with QM rules (not to be confused with QRM!)? Law firm Ballard Spahr points out that a few politicians are circulating a draft of a letter on the Hill which urges the CFPB to “craft a safe harbor [in the Ability to Repay/QM rule] that strikes the right balance between protecting consumers from poorly underwritten mortgages while ensuring they have access to safe and affordable mortgage products.” The letter expresses the concern that, without the safe harbor and the legal certainty that the safe harbor arguably would provide, there is little incentive for lenders to make “qualified mortgages” which may restrict the availability of credit for some borrowers. Under Dodd-Frank Section 1412, a loan that meets the definition of a “qualified mortgage” (QM) is presumed to meet the ability to repay requirements of the rule. In May, 2011, the Fed proposed two possible standards for a QM. The critical difference between the two standards is that, under one alternative, the origination of a QM would create a safe harbor that the lender has complied with the ability to repay requirements and, under the other alternative, it would create a rebuttable presumption of compliance. “The Ability to Repay/QM regulation is among the most anxiously awaited final rules to be issued by the CFPB and is expected to be issued this summer.” Read the congressional draft letter.

The CFPB proposed procedures for asserting its supervisory authority over nonbanks engaged in conduct that could potential pose risk to consumers. Under the Dodd-Frank Act, the CFPB has authority to supervise a nonbank, regardless of its size, that the CFPB has reasonable cause to determine “is engaging, or has engaged, in conduct that poses risks to consumers with regard to the offering or provision of consumer financial products or services.” This includes related services like payday loans, credit cards, or private education loans.

Organizations are doing what they can to educate their members. For example, in New Jersey, the NJPMO is having a conference to discuss the “CFPB Flat Fee Proposals on Mortgage Originator Compensation” on June 5th in Iselin, New Jersey. (For information contact Brian@NJPMO .org.)

At NAMB, its Board and Government Affairs Committee convened a task force to read and analyze the CFPB’s release on “Rules to Simplify Mortgage Points and Fees”. “The intent of the new rules that will be proposed this summer and implemented in January 2013, are intended to make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.” The CFPB is considering proposals that would require an interest-rate reduction when consumers elect to pay discount points, require lenders to offer consumers a no-discount point loan option, ban origination charges that vary with the size of a loan (i.e., flat origination fees), set qualification and screening standards for every person who originates loans, prohibit paying steering incentives to mortgage loan originators, and so on. A full plate!

In Columbia, Maryland, on June 5th, the MMBA is hosting, “Are you Prepared for Upcoming Regulation that will Change the Face of Mortgage Lending?”  “This event will review several key topics, including but not limited to: components of Dodd-Frank and regulation updates, why the changes are happening, regulatory compliance, expectations, risk of non-compliance, and how the changes affect everyone’s day-to-day duties, and several other topics. Go to www.mdmba.org to register, and questions should be directed to info@mdmba.org.

Turning to recent Fannie news, Fannie Mae has enhanced and clarified HARP guidelines based on questions received by lenders over the past few months.  The clarifications and enhancements, all of which can be found in the revised Selling Guide, address Responsible Lending Practices, subordinate financing for co-ops, eligibility for modified mortgages, multiple financed properties for the same borrower, significant derogatory credit events, general eligibility requirements and underwriting considerations for DU Refi Plus and Refi Plus, valuations and project standards, escrow account requirements, and resubordination.

The income and employment guidelines in the Selling Guide have been updated as well and now include additional guidelines on the evaluation of variable income, continuity of income, income verification, and income sources with a defined expiration date.  Sections on employment documentation and verification; bonus, commission, overtime, secondary, rental, and seasonal income; income reporting on IRS forms; and assessing and verifying income for Desktop Underwriter® purposes have also been updated.

The July 2012 Release Notes on DU for government loans are now available; as well as FAQs. As of July 21st, DU users can expect updates to VA bankruptcy and foreclosure messaging, a variety of HUD underwriting issues, FHA reserves calculation on 3-4 unit properties, and the FHA TOTAL Mortgage Scorecard.
 
Desktop Originator and DU users are reminded that the practice cases and documentation have been updated in support of the changes made to the method of assigning Social Security numbers.  The SSNs associated with the test cases have been updated accordingly, and the test credit reports that use the old SSN information will no longer be in use as of June 16th.

And through this, some lenders are continuing to deal with “unsalable” loans while other companies have carved out a niche for themselves dealing with these loans. For example, Right House Capital is a mortgage consulting firm who specializes in assisting banks and mortgage companies liquidate their unsalable loans. RHC has access to all three GSE’s and “because these are purchased strictly based on the AUS (and thus no overlays), your agency-eligible loan can price very close to, if not above, par.” Of course, not every loan is going to be sold near par, but if you have some loans that you can’t sell, it might be worth contacting Craig Beard at craigbeard@righthousecapital .com. (And no, this is not a paid announcement.)

I don’t think that this index has ever risen in its history, but yesterday we learned that the Standard & Poor’s Case-Shiller National Composite home-price indexes fell 2% in the 1st quarter and 1.9% year-to-year, and prices are down roughly 35% from their peak in the second quarter of 2006. The Case-Shiller index of 10 major metropolitan areas was down 2.8% in March from a year earlier and the 20-city index was off 2.6%. We also found out that the Conference Board’s Consumer Confidence index decreased to 64.9 in May from a revised 68.7 in April. But neither really has the strength to move rates like the events in Asia and Europe tend to do.

Traders continue to see a significant pick up in the amount of Fannie 30-yr 3.0’s that originators have been selling (containing 3.25-3.625% loans). Fannie and Freddie 3.0’s represented <1% of the total flows in the market 3 weeks ago, 2 week ago they represented about 6%, and last week 3.0’s represented as much as 15.5% of all hedging activity.

Monday, uh, I mean Tuesday, was pretty quiet rate-wise. Our 10-yr closed around 1.73% and agency MBS prices were a shade worse on below-average volumes. Locks seem to be slowing down, and in fact the MBA’s mortgage application index dropped 1.3% last week (purchases were -.6%, refi’s were -1.5% but still account for about 77% of all apps). About the only news is at 7AM PST with NAR’s Pending Home Sales Index for April – hardly a rate mover. In the early going the 10-yr is down to 1.68% – look for a market improvement in rate sheet pricing!

Puns (Part 2 of 4):
I wondered why the baseball was getting bigger. Then it hit me!
Broken pencils are pointless.
I tried to catch some fog, but I mist.
What do you call a dinosaur with an extensive vocabulary? A thesaurus.
England has no kidney bank, but it does have a Liverpool.
I used to be a banker, but then I lost interest.
I dropped out of communism class because of lousy Marx.
All the toilets in New York’s police stations have been stolen. The police have nothing to go on.

 

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[MND NewsWire] – CoreLogic Reports 66,000 Foreclosures in April, Down 15.4% YoY

CoreLogic Reports 66,000 Foreclosures in April, Down 15.4% YoY

Posted to: MND NewsWire
Wednesday, May 30, 2012 9:28 AM

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CoreLogic is reporting that foreclosures last month totaled 66,000, down 12,000 or 15.4 percent from April 2011 but unchanged from March 2012. There have been approximately 3.6 million completed foreclosures in the US since the financial crisis began in September 2008.  That number is for legal actions where the bank took possession of the property and does not include the numbers of homes surrendered through short sales or deeds-in-lieu of foreclosure.

The national foreclosure inventory in April contained 1.4 million homes or 3.4 percent of all homes in the country with a mortgage.  This was unchanged from the previous month but was down .1 million or 0.1 percent from April 2011.  CoreLogic defines foreclosure inventory as the number and share of mortgage homes that have been placed into the process of foreclosure by the mortgage servicer.

 “There were more than 830,000 completed foreclosures over the past year or, in other words, one completed foreclosure for every 622 mortgaged homes,” said Mark Fleming, chief economist for CoreLogic. “Non-judicial foreclosure markets, like Nevada, Arizona and California, completed two and a half times as many foreclosures over the past year as judicial foreclosure states.

 “The inventory of homes in foreclosure in judicial foreclosure states is growing, but this increase is being more than offset by declining inventories in non-judicial states where the processing timelines to clear a foreclosure are shorter,” said Anand Nallathambi, chief executive officer of CoreLogic. “Nationally the inventory of homes in foreclosure decreased 0.1% from what it was a year ago at this time, and has leveled off over the first four months of 2012.”

 Completed foreclosures over the last five months were highest in California (142,000), Florida (92,000), and Michigan (60,000).  The highest inventories of pending foreclosures as a percentage of all mortgaged homes were in Florida (12.0 percent), New Jersey (6.7 percent), and Illinois (5.3 percent.)  Nevada, in fourth place at 5.0 percent was the only non-judicial foreclosure state out of the 12 jurisdictions with the highest inventories.

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[MND NewsWire] – Pending Sales Break 3-Month Winning Streak

Pending Sales Break 3-Month Winning Streak

Posted to: MND NewsWire
Wednesday, May 30, 2012 10:02 AM

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Pending home sales fell in April, breaking a three month streak of gains according to the National Association of Realtors® (NAR). The Association’s Pending Home Sales Index (PHSI) declined 5.5 percent to 95.5 from a revised March number of 101.1 but is 14.4 percent higher than in April 2011 when it stood at 83.5.  The March revision was from an original estimate of 101.4.

NAR’s forward-looking indicator is based on contract signings and does not reflect actual closed sales.  Contracts are generally expected to close within 30 to 60 days.

Lawrence Yun, NAR chief economist, said a one-month setback in light of many months of gains does not change the fundamentally improving market conditions.  “Home contract activity has been above year-ago levels now for 12 consecutive months.  The housing recovery momentum continues,” he said.

Yun pointed out that actual sales are still well above the levels seen from 2008 through 2011.  “Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007.  All of the major housing market indicators are expected to trend gradually, up but a new federal budget must be passed before the end of the year for the economy to continue to move forward.”

NAR has upgraded its housing forecast with existing home sales now expected to hit 4.66 million in 2012 compared to 4.26 million in 2011.  NAR is projecting 4.92 million home sales in 2013 but this, NAR says, could vary significantly depending on two factors.  First, if lending returns to normal, sales could conceivably improve to 5.3 million.  However, higher taxes and sharp spending cuts commencing at the first of next year could reduce sales to 4.5 million.  The forecast views such a double whammy as unlikely.

The PHSI was down month-over-month in three out of four regions.  Only in the Northeast did it increase from March, up 0.9 percent to 78.9, 19.9 percent higher than a year earlier.  The index in the Midwest was 93.0, slipping 0.3 percent from March but 23.0 percent higher than in April 2011.  The South dropped 6.8 percent month-over-month to an index of 105.7 but remained 13.3 percent higher than in the corresponding 2011 period.  The West saw the biggest change, declining 12.0 percent to 94.9 but this was still a 5.1 percent improvement from a year earlier.

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