Monthly Archives: February 2013

[MBS Commentary] – MBS RECAP: Mortgages Win Flatness Contest Vs Treasuries and Stocks

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MBS RECAP: Mortgages Win Flatness Contest Vs Treasuries and Stocks

Posted to: MBS Commentary
Thursday, February 28, 2013 4:05 PM

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Flatness…  That would be the best characterization for today’s range in MBS.  Even as Treasuries and equities futures whipped around mildly before the Stock open, MBS couldn’t be bothered to move outside a 3 tick range from 103-15 to 103-18.  Later in the day, the only semblance of drama in broader markets merely made for a 1 tick expansion of that range as MBS visited 103-14.  A-4-tick range is a rare occurrence for production MBS, and even rarer on month-end trading days.  Tomorrow brings an impressive glut of European economic data that may well set the tone for the domestic session unless morning data contains outrageous surprises.

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[Mortgage Rate Watch] – Mortgage Rates Aggressively Flat To End The Month

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Mortgage Rates Aggressively Flat To End The Month

Posted to: Mortgage Rate Watch
Thursday, February 28, 2013 4:17 PM

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Mortgage rates are even more sharply unchanged today than they were yesterday, which at least saw some consensus toward strength in the morning and weakness in the afternoon.  In contrast, today’s movements in the secondary mortgage market were completely flat (relative to their average range of motion).  This left nearly all lenders at liberty to put out one rate sheet in the morning and call it a day.  As such, 3.625% best-execution is unchanged, as are the average costs associated with that rate.  As has been the case, adjacent rates at 3.5 and 3.75 may be competitive depending on your scenario. 

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[Pipeline Press] – FHA and the Sequester; A Note in Defense of Builder Affiliate Relationships

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FHA and the Sequester; A Note in Defense of Builder Affiliate Relationships

Posted to: Pipeline Press
Thursday, February 28, 2013 8:47 AM

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I continue to see concerns in the market about the fate of “affiliate relationships” in a QM world, especially in regard to builder/lenders. (Remember that Debra Still, the chairman of the MBA, comes from PulteGroup.) Recently I received this e-mail, filled with questions: “Would not the ‘builder concession’ be considered a borrower paid cost because the price of the home they pay creates the funds for the concessions? Shouldn’t there be an anti-steering form that accurately reflects what the rate would be if the borrower obtained financing elsewhere and another form reflecting the cost of the home without concessions? Wouldn’t it be in the borrower’s best interest to require full consumer disclosure and awareness of the true cost with new construction? I have done lending for a ‘production builder’ I do understand and know how builder concessions work. Is there legislation in process that will address this practice?”

Besides, how high can home loan rates really go with the Fed saying it would continue its asset purchases…

 

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[MND NewsWire] – Housing a Bright Spot in Fed’s Latest Household Debt and Credit Report

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Housing a Bright Spot in Fed’s Latest Household Debt and Credit Report

Posted to: MND NewsWire
Thursday, February 28, 2013 3:16 PM

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James McAndrews, Executive Vice President and Director of Research at the Federal Reserve Bank of New York told a Household Debt and Credit Press Briefing on Thursday that three and a half years after the end of the “Great Recession” expansion remains sluggish with both economic and job growth growing more slowly than in earlier business cycles and inflation remaining subdued.

These conditions were the basis for the Federal Open Market Committee’s (FOMC) January decision to continue to pursue its “highly accommodative” policy stance combining an exceptionally low policy interest rate with forward guidance indicating that this range would remain at least until unemployment falls below 6½ percent, inflation is projected to be no more than 2½ percent between one and two years in the future, and…

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[MND NewsWire] – MBA, NAR Outline Importance of FHA

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MBA, NAR Outline Importance of FHA

Posted to: MND NewsWire
Thursday, February 28, 2013 1:56 PM

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David H. Stevens, President & CEO of the Mortgage Bankers Association (MBA), and Gary Thomas, President of the National Association of Realtors® (NAR) testified today before the U.S. Senate Committee on Banking, Housing and Urban Affairs at a hearing titled, “Addressing FHA’s Financial Condition and Program Challenges.” 

Stevens, who served as FHA Commissioner from 2009 to 2111 noted findings from FHA’s 2012 Actuarial Review that the capital ratio of the MMI Fund had fallen to negative 1.44 percent which prompted concerns that it might need a draw from the U.S. Treasury and raised questions about whether FHA’s policies need to be adjusted…

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[MND NewsWire] – Regulators Outline $9.3B Foreclosure Compensation Plan for 13 Servicers

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Regulators Outline $9.3B Foreclosure Compensation Plan for 13 Servicers

Posted to: MND NewsWire
Thursday, February 28, 2013 10:43 AM

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Over four million homeowners may be eligible for compensation for mortgage servicer-related problems under agreements announced today.  The agreements with 13 servicers for deficient practices in mortgage loan servicing and foreclosure processing were originally reached with the Office of Comptroller of the Currency (OCC) and the Federal Reserve Board in January.  Amendments to enforcement actions against the servicers that memorialized the agreements were released Thursday and will release the servicers from completing which will replace the Independent Foreclosure Reviews.

The amendments require the servicers to provide $9.3 billion in payments and…

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[MBS Commentary] – MBS MID-DAY: Sideways, Mostly Positive Morning, Outperforming Treasuries

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MBS MID-DAY: Sideways, Mostly Positive Morning, Outperforming Treasuries

Posted to: MBS Commentary
Thursday, February 28, 2013 11:09 AM

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MBS are currently showing their appreciation for Treasuries to hold the line at yesterday afternoon’s highs.  In general, the faster the pace and the bigger the move in Treasuries, the harder it is for MBS to keep pace.  Today then, is the opposite of that, with 10yr yields opening improved (but not “too improved”) from yesterday’s latest levels, and holding a narrow range of roughly 2bps.  10’s spiked just a bit into the first half hour of the stock market trading day but bounced before threatening yesterday’s closing levels.  The tidy little range–which is slightly higher in rate since the open, but not high enough to break support–has afforded MBS the opportunity to stay almost completely sideways around 103-16.  Data was of little consequence and volumes have been low.  In fact, taking inventory of what we have going on: MBS are in a narrow range near long term inflection points, Treasuries aren’t giving clear signals, volume is low, AND it’s “month-end,” all seem to suggest that things are a little “too quiet.”  That suggests the next move outside this morning’s ranges could be bigger than yesterday’s morning or afternoon swings.

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[MND NewsWire] – REO, Short Sales were 43 Percent of 2012 Market

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REO, Short Sales were 43 Percent of 2012 Market

Posted to: MND NewsWire
Thursday, February 28, 2013 8:15 AM

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Nearly one million properties that were either bank-owned (REO) or in some stage of foreclosure sold to new owners in 2012 according to RealtyTrac’s year-end report.  The short sale portion of distressed sales continued to increase while REO sales declined.

There were 498,122 REO residential properties sold to third parties in 2012, a 15 percent decrease from 2011 and down 19 percent from 2010.  These sales accounted for 11 percent of the residential market compared to 13 percent and 16 percent of the two prior years.  Third parties bought 449,873 houses that were in pre-foreclosure status (primarily short sales in which the lender took less to release its lien than the balance of the mortgage), a six percent increase from 2011 and…

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[MBS Commentary] – The Day Ahead: Economic Data Gets More Serious; Memories of Greece

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The Day Ahead: Economic Data Gets More Serious; Memories of Greece

Posted to: MBS Commentary
Thursday, February 28, 2013 6:37 AM

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It’s a bit of a predicament that bond markets find themselves in at the moment, having looked very serious about breaking the recent trend higher in rates only to potentially already be finding resistance.  In simpler terms, rates have been moving up, then Italy made it look like they might go down again (hopes for a coincident equities sell-off fueled speculation), but rates now look to have had a serious problem moving lower past some important resistance and there are multiple eventualities for the coming days.

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[MBS Commentary] – MBS RECAP: Equities Markets Ambush Unsuspecting Bonds

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MBS RECAP: Equities Markets Ambush Unsuspecting Bonds

Posted to: MBS Commentary
Wednesday, February 27, 2013 4:09 PM

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Like a ‘tyger in the forests of the night,’ equities markets lie in wait for the cash open at 9:30am at which point they found themselves with a choice at the 1495 technical level (or maybe with a PLAN!).  ‘Fearful Symmetry’ ensued as equities made shapes very similar to Monday’s sell-off, but this time in the other direction.  Bond markets weren’t much interested until the afternoon hours when technical support broke down in MBS, Treasuries and Euros.  Big tradeflows and asset allocation trades exacerbated all of the above and the “risk-off” lever that had so recently benefited bond markets on Monday–after taking a day to chop around yesterday–now heads back in the other direction.  At least THAT’S WHAT WE’RE MEANT TO THINK!  Perhaps we just witnessed one big rope-a-dope from equities traders who missed out on the selling Monday and wanted to set the pins back up again–that was the joke today anyway…  Whether or not there’s a shred of truth to it remains to be seen, but given the flatness of the Euro since bottoming out in the wee hours yesterday morning, it seems like the “risk-on vs risk-off” trade is genuinely soothed that the rhetoric hasn’t been more vitriolic out of Italy.  

Month-end tomorrow for bond markets continues to provide a generally supportive undertone, all things being equal, and there’s plenty of data on tap over the next two days that could take things in either direction, but ultimately, any big news out of Europe still has the potential to set the tone into the weekend.

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