MBS Commentary – MBS RECAP: A Fitting End to 2013: Relentless Enigmatic Weakness

MBS RECAP: A Fitting End to 2013: Relentless Enigmatic Weakness

Posted to: MBS Commentary
Tuesday, December 31, 2013 3:53 PM

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On many occasions in 2013, I’ve referred to weakness as “seemingly inexplicable.” This rarely has to do with the weakness defying explanation and more to do with the lack of overt, traditional, easily-understood explanations.

In other words, there are general rules about how and why rates move and then there are exceptions. An uncommonly large amount of 2013 fell into the “exception” category.

This was made all the more confusing by the fact that economic data often DID have the expected effect (strong data, rates higher, and vice versa), but it wasn’t for the…

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Daily Newsletter: 2013 Marks Lift-Off From All-Time Low Rates; Blindsided by Flood Insurance Spike; Wells Settles with Fannie

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30 Year Fixed
4.63% +0.01
15 Year Fixed
3.65% +0.01
10YR Treasury
3.03% +0.0542
FNMA 30YR 3.5
99.34 -0.25
FNMA 15YR 2.5
101.97 -0.14
View Today’s Rates
Tuesday December 31, 2013
Mortgage Rate Watch – 2:28PM
For Mortgage Rates, 2013 Marks Lift-Off From All-Time Lows
Mortgage rates were little-changed today, ending the year less than a quarter of a percentage point away from their highest levels in more than 2 years. 4.625% remains the most prevalently …
MND NewsWire – 1:30PM
Homeowners Blindsided with Stratospheric Flood Insurance Rates
In its monthly e-magazine Foreclosure Report RealtyTrac takes a look at the current and potential impact of legislation designed to rescue the nation’s flood insurance program. Within …
Pipeline Press – 11:39AM
G-fee Changes in Limbo; Wells Settles with Fannie; Tax Breaks Expiring; Drug Testing in Financial Services’ Future?
Thanks to FAMC for sponsoring the Franklin American Mortgage Music City Bowl . It was some great publicity for FAMC and the industry. And this is that day, at quittin’ time, when you …
MBS Commentary – 12:25PM
MBS MID-DAY: Bond Markets Erase Most of Yesterday’s Gains
Once you accept the truths in yesterday morning’s chart (re-posted below), the rest of 2013 doesn’t really matter. To recap: June 19 was the date of the FOMC Announcement in which the …

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Today’s Comments

avatar.aspx MBS Live Chat – 9:57AM
“MG – My respect for your MBS knowledge multiplied when I found this article and tried to read it and almost lost my mind (and couldn’t finish it). http://www.newyorkfed.org/research/conference/2012/mortgage/primsecsprd_frbny.pdf…
avatar.aspx MBS Live Chat – 12:51PM
“2013 in mortgage land feels like a Shakespearean tragedy….”
avatar.aspx MBS Live Chat – 1:06PM
“And with that…. I say: “Good night, good night! Parting is such sweet sorrow, that I shall say good night till it be morrow.” …. or day after tomorrow in this case. Happy New Year folks!…”
avatar.aspx MBS Live Chat – 1:18PM
“Just tuning in to wish everyone a Happy and Safe New Year! 2014 is going to be another great year. Get after it people. And as always a big thanks for everything MG does for us. See everyone in 2014!…”
avatar.aspx MBS Live Chat – 1:19PM
“Happy new year guys! In some weird way we are all family! I hope the champagne at midnight tastes sweet! Onward and upward in 2014……”
avatar.aspx MBS Live Chat – 1:25PM
“Wishing the MND community a happy and healthy New Year. Been a pleasure sharing knowledge and learning/ growing with you all!…”
avatar.aspx MBS Live Chat – 1:29PM
“Happy New Years to you all…”
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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 4.63% +0.01
15 Yr FRM 3.65% +0.01
FHA 30 Year Fixed 4.25% +0.00
Jumbo 30 Year Fixed 4.55% +0.00
5/1 Yr ARM 3.24% +0.00

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 3.62% 1.06 +0.18
30 Yr. Fixed 4.49% 1.21 +0.22
MBA ** hdr_arrow.png
30 Yr. Fixed 4.64% 0.41 +0.02
15 Yr. Fixed 3.74% 0.29 +0.08
30 Yr. Jumbo 4.63% 0.24 +0.02
30 Yr. FHA 4.29% 0.24 +0.04
5/1 ARM 3.26% 0.39 +0.06
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 4.48% 0.70 +0.01
15 Yr. Fixed 3.52% 0.70 +0.01
1 Yr. ARM 2.56% 0.50 -0.01
5/1 Yr. ARM 3.00% 0.40 +0.04

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 94.94 -0.31
30YR FNMA 3.5 99.34 -0.25
30YR GNMA 3.0 96.48 -0.25
30YR GNMA 3.5 100.72 -0.25
15YR FNMA 3.0 101.97 -0.14
15YR FNMA 2.5 98.92 -0.13
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
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2 YR 0.3838% +0.0004
5 YR 1.7477% +0.0415
10 YR 3.0263% +0.0542
30 YR 3.9642% +0.0631
Prices as of: 12/31/2013 2:06PM EST

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This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates and terms are subject to change without notice.
© 2013 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
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Daily Rate Update: For Mortgage Rates, 2013 Marks Lift-Off From All-Time Lows

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dailyrateheader.png
30 Year Fixed
4.63% +0.01
15 Year Fixed
3.65% +0.01
10YR Treasury
3.03% +0.0542
FNMA 30YR 3.5
99.34 -0.25
FNMA 15YR 2.5
101.97 -0.14
View Today’s Rates
For Mortgage Rates, 2013 Marks Lift-Off From All-Time Lows
December 31, 2013
Mortgage rates were little-changed today, ending the year less than a quarter of a percentage point away from their highest levels in more than 2 years. 4.625% remains the most prevalently quoted rate for ideal, conforming 30yr Fixed loans (best-execution), with the only changes being seen in the form of closing costs.

On average, rates were an eighth of a percentage point higher on several occasions in August and September this year. Before that, we’d have to go back to April 2011 to see higher.

Despite the steep rise in rates in 2013, the average rate for the entire year (4.25%) is the second lowest on record next to 2012’s 3.75%. The previous 3 years were each roughly 0.25% higher and 2008 was roughly a full 1.0% higher than that. To make this easier to digest, here’s a quick recap of that info:

2008 – 6.0%
2009 – 5.0%
2010 – 4.75%
2011 – 4.5%
2012 – 3.75%
2013 – 4.25%

As we’ve discussed all year, part of the reason for the abrupt rise in rates has to do with the market perception that 2012 in the table above, looks like a long term turning point. The silver lining to that phenomenon is that even if it turns out to be the case, it connotes a much higher probability of slower increases into 2014. It’s even tempting to say that if history repeats itself, years like 2013 are typically followed by a recovery by the end of the following year, but there are two important caveats.

The most overt counterpoint to that historical norm is that the 1999’s rate movements were very similar to 2013’s (just talking about the pace and magnitude, not the rates themselves). Although rates did make it most of the way back to 1999’s lows, it didn’t happen until 12/31/2000 and those improvements didn’t even start showing up until the Fall of 2000. After that, it wasn’t until the middle of 2001 that rates finally broke 1999’s lows.

The other significant caveat to hoping history repeats in some way is that history has been one-sided for the better part of 30 years. After rates topped out in the early 80’s and corrected sharply from 84-86, rates entered a remarkably linear era of constant improvement. Sure, the movement from one end of the range to the other seemed severe when it happened abruptly (87, 94, 99, 03, 09, and 2013), but overall, the same parallel lines that were emerging in the early 90’s have contained all the mortgage rate movement since then.

To state the obvious, of course history is going to look like it’s been repeating itself if the same thing has been happening for most of the time that most anyone with an opinion has been old enough to have one. If we’re considering a long term shift in that decades-long trend, the extent to which we can expect 2014 to behave like 1994 or 2000 is limited. There will be pockets of recovery–perhaps even big ones–but in looking back on 2013, it’s very likely we’ve just seen the lift-off from 2012’s all-time lows.

(The “frosting side” of that otherwise unpalatable nugget would be that the same sort of lift-off seemed like a possibility following previous generational lows, especially in 2003 and–for those not in tune with European events–2010).

Loan Originator Perspectives

“Short, slow day to close out the year, and what a year it’s been. 10 year treasuries opened 2013 at 1.7%, and ended just a touch higher at 2.99%. 2013 was the end of an falling rate era, one unlikely to be repeated soon. At least rate increases are contained at the moment; housing markets may withstand current rates, but wouldn’t be so confident if they continue to climb. Happy New Year all!” –Ted Rood, Senior Originator, Wintrust Mortgage

Today’s Best-Execution Rates

  • 30YR FIXED – 4.625%
  • FHA/VA – 4.25%
  • 15 YEAR FIXED – 3.5%
  • 5 YEAR ARMS – 3.0-3.50% depending on the lender


Ongoing Lock/Float Considerations

  • The prospect of the Fed reducing its asset purchases weighed heavy on interest rates for the 2nd half of 2013, causing volatility and generally pervasive upward movement.
  • Tapering ultimately happened on December 18th, 2013. Markets had done so much to come to terms with it ahead of time that it essentially just confirmed the the 6 month move higher in rates, but didn’t make for another immediate spike higher.
  • That said, we should assume that we’re still in a rising rate environment on average.
  • NOTE: Lenders will be adjust rate sheets at various times in December and January to account for the most recent hike in Guarantee Fees. This will unequivocally raise rates by at least an eighth of a percent for almost every borrower, and in most cases .25-.375%. Depending on the lender, those changes will take place overnight and have already begun.
  • (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario. There are many reasons a quoted rate may differ from 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).

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

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Today’s Rates

Best Execution hdr_arrow.png
Rate Change
Current Mortgage Rates »
What are best-execution rates?
30 Yr FRM 4.63% +0.01
15 Yr FRM 3.65% +0.01
FHA 30 Year Fixed 4.25% +0.00
Jumbo 30 Year Fixed 4.55% +0.00
5/1 Yr ARM 3.24% +0.00

Average Mortgage Rates

Rate Points Change
FHFA * hdr_arrow.png
15 Yr. Fixed 3.62% 1.06 +0.18
30 Yr. Fixed 4.49% 1.21 +0.22
MBA ** hdr_arrow.png
30 Yr. Fixed 4.64% 0.41 +0.02
15 Yr. Fixed 3.74% 0.29 +0.08
30 Yr. Jumbo 4.63% 0.24 +0.02
30 Yr. FHA 4.29% 0.24 +0.04
5/1 ARM 3.26% 0.39 +0.06
Freddie Mac ** hdr_arrow.png
Current Mortgage Rates »
* FHFA averages are updated monthly.
** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
30 Yr. Fixed 4.48% 0.70 +0.01
15 Yr. Fixed 3.52% 0.70 +0.01
1 Yr. ARM 2.56% 0.50 -0.01
5/1 Yr. ARM 3.00% 0.40 +0.04

Secondary Markets

MBS hdr_arrow.png
Price Change
30YR FNMA 3.0 94.94 -0.31
30YR FNMA 3.5 99.34 -0.25
30YR GNMA 3.0 96.48 -0.25
30YR GNMA 3.5 100.72 -0.25
15YR FNMA 3.0 101.97 -0.14
15YR FNMA 2.5 98.92 -0.13
Treasuries hdr_arrow.png
Yield Change
Current MBS / Treasury Prices »
MBS and Treasury data provided by Thomson Reuters.
Mortgage News Daily and MBS Live! are exclusive re-distributors of Real Time Thomson Reuters Mortgage Information.
Secondary Marketing Managers:
If you are interested in gaining access to the most accurate real-time back-month TBA indications from Thomson Reuters and Tradeweb. Request More Information
2 YR 0.3838% +0.0004
5 YR 1.7477% +0.0415
10 YR 3.0263% +0.0542
30 YR 3.9642% +0.0631
Prices as of: 12/31/2013 2:06PM EST

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About This Report
Mortgage News Daily is a trusted source of mortgage rate market data and analysis, with over 1 million readers each month. Unlike many rate surveys, our survey is conducted on a daily basis and is designed to bring you the most current and accurate rate data available. We use a proprietary formula to calculate averages based on best-execution rates from top lender’s rate sheets, also taking into account feedback from hundreds of mortgage market professionals around the country.
© 2013 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. – 19706 One Norman Blvd – Cornelius, NC 28031
View this Report in your Web Browser | Forward to a Friend | Subscribe
This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments. Rates presented in this report are averages and are subject to change without notice.
You were sent this email because you opted to receive our weekly or daily email reports. Go here to manage your email preferences or here to unsubscribe from all email communications.

MND NewsWire – Homeowners Blindsided with Stratospheric Flood Insurance Rates

Homeowners Blindsided with Stratospheric Flood Insurance Rates

Posted to: MND NewsWire
Tuesday, December 31, 2013 12:42 PM

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In its monthly e-magazine Foreclosure Report RealtyTrac takes a look at the current and potential impact of legislation designed to rescue the nation’s flood insurance program. Within that legislation RealtyTrac says there may be looming another demonstration of the theory of unintended consequences.

The National Flood Insurance Program (NFIP) was created by an act of Congress in 1968 to help deal with the escalating cost of the government’s emergency response to flood disasters. Because there was little shared risk, i.e. persons who live outside of flood prone areas do not purchase the insurance, private companies were either pulling out of insuring in high risk areas or raising premiums to the point of unaffordability, leaving government to clean up and repair damages after a disaster. The program provides a government subsidy to keep premiums more affordable and as of April 2010 insured about 5.5 million homes, the majority of which were in Texas and Florida.

High-cost flooding disasters such as Hurricane Katrina drained the coffers of the program which is administered by the Federal Emergency Management Agency (FEMA) so in July 2012 Congress passed the Biggert-Waters Flood Insurance Reform Act to help stabilize the program’s finances. The changes required NFIP to “raise rates to reflect true risk.”

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MBS Commentary – MBS MID-DAY: Bond Markets Erase Most of Yesterday’s Gains

MBS MID-DAY: Bond Markets Erase Most of Yesterday’s Gains

Posted to: MBS Commentary
Tuesday, December 31, 2013 12:25 PM

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Once you accept the truths in yesterday morning’s chart (re-posted below), the rest of 2013 doesn’t really matter. To recap:

  • June 19 was the date of the FOMC Announcement in which the Fed formally introduced tapering prospects, prompting a 45bps sell-off over 4 days with one little phrase “The Committee is prepared to increase or reduce the pace of its purchases.”
  • On June 20st, 10yr yields closed at a new high of 2.471, and that has been the lowest closing level ever since.
  • October 23rd (3rd white circle below) saw a moderate extension of the previous day’s strength…

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Pipeline Press – G-fee Changes in Limbo; Wells Settles with Fannie; Tax Breaks Expiring; Drug Testing in Financial Services’ Future?

G-fee Changes in Limbo; Wells Settles with Fannie; Tax Breaks Expiring; Drug Testing in Financial Services’ Future?

Posted to: Pipeline Press
Tuesday, December 31, 2013 8:26 AM

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Thanks to FAMC for sponsoring the Franklin American Mortgage Music City Bowl. It was some great publicity for FAMC and the industry. And this is that day, at quittin’ time, when you tell your co-workers “See you next year!” Yuck, yuck, yuck.

I love maps. I love colored maps. I love interactive colored maps the most. So I was excited, along with thousands of LOs & Realtors who have to do presentations on this stuff for clients, when the U.S. Census Bureau recently unveiled “Census Explorer“, a new interactive map that gives users easier access to neighborhood-level statistics. The map uses updated statistics from the 2008-2012 American Community Survey, and includes graphical representations for total population, percent 65 and older, foreign-born population percentage, percent of the population with a high school degree or higher, percent with a bachelor’s degree or higher, labor force participation rate, home ownership rate, and median household income.

Kansas is going to begin drug testing for welfare recipients in 2014. And the Department of Defense has long been testing for certain drugs, and many financial service sector companies require applicants to undergo drug testing prior to being hired. Is it really a stretch to predict that anyone with access to confidential financial information for consumers will not be required to be drug-free some day? Many companies have no desire, given other compliance issues, to have any questions regarding having data compromised, or legal or security issues. Some companies receive insurance premium reductions if they drug test employees. Illegal drug use/abuse is illegal, and if an employee is demonstrated to be willfully violating laws, the likelihood is generally considered higher that they might break laws in the course of work. Agencies, and aggregators, could easily expect their clients to have drug testing programs, especially for new employees or senior management. But there are arguments against it.

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MND NewsWire – Fannie Mae Ends Year with Final Repurchase Agreement

Fannie Mae Ends Year with Final Repurchase Agreement

Posted to: MND NewsWire
Tuesday, December 31, 2013 10:47 AM

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One of the government sponsored enterprises (GSEs) has reached what it says will be the last settlement of a repurchase request related to loans it purchased before being placed in government conservatorship. Fannie Mae announced today it will accept $591 million from Wells Fargo in return for releasing the bank, with certain exceptions, from repurchase liability for loans purchased prior to 2009. Wells Fargo will remain obligated for certain other contractual responsibilities under the resolution agreement.

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