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Mortgage News
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| 3/17/2010, 09:37 PM by Mortgage News Daily |
Posted To: MBS Commentary When faced with a lock float decision with decent arguments for either course of action, I like to look at longer term charts to get a sense of where I'm at vs. where I was or could be. Doing so at the current time leaves me with a pretty simple conclusion. Without trying to predict the future, we're obviously much higher in the 2010 range than we are low--pretty close to the highs in fact. It is frustrating, however, that a lot of the lower prices occurred in early January where we might have to doubt whether they were truly reflective of the range or were, in some way, remnants of year end distortion. Even so, the lows from late Feb make a similar case, but there too, we could impugn those on the grounds that they happened and were reversed abruptly. The bottom line I suppose, would...(read more) |
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| 3/17/2010, 07:51 PM by Mortgage News Daily |
Posted To: MBS Commentary Today is much flatter compared to yesterday But 4.5's are still up 5 ticks and we're at highs again near end of day 10yr tsy lower by around 1 bp to 3.64 No data on Friday, but tons to consider tomorrow Waiting for reprices for the better, then consider locking First thing's first. It's another "up" day: Also, we've seen some correction to recent widening trends in MBS. Whether this should be reassuring or cause us to worry about spreads widening back out again is and will be uncertain, but at least we know it's uncertain. Here's what's going through my mind right now: 1. It's uncommon for rallies to string together more than a 4 or 5 day streak. Today marks the 4th day in a very stable and directional trend of improvement in MBS. Don't take...(read more) |
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| 3/17/2010, 07:24 PM by Mortgage News Daily |
Posted To: Mortgage Rate Watch Mortgage rates rallied lower yesterday after the Federal Reserve reiterated they intend to keep the Fed Funds rate at at exceptionally low levels for an “extended period”. The Fed also held steady in their belief that inflation is not posing a threat to economic stability. In regard to the MBS Purchase Program, although the door for some sort of extension or reopening is not completely closed, the Fed is still widely expected to finish the program at the end of March READ MORE . Following the release of the statement, benchmark Treasury yields declined and prices of mortgage backed securities moved higher. This allowed most lenders to reprice for the better, lowering consumer borrowing costs by a few basis points . Still, the price improvements were not enough to push the par 30...(read more) |
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| 3/17/2010, 04:48 PM by Mortgage News Daily |
Posted To: MBS Commentary The dollar is weaker, oil prices are higher, and stocks are rallying---STILL. The S&P is trading at a new "recovery rally" index high print. Rates traders are ignoring the stock lever---for now at least. Since the auction cycle ended last Thursday, the 10 yr note has staged quite the recovery rally of its own...yields have fallen 14 basis points from the 3.779% high all the way down to 3.634%...which happens to be a very technically relevant level: the 62% retracement of the Dec. 21 sell off. The 2s10s curve is also flatter....now resting at 274bps after peaking at 284bps last Wednesday. Again, this has occurred while stocks have rallied. Do you think the LOW VOLUME stock market is having much of an effect on the yield curve at the moment? I do not believe so...rates traders are...(read more) |
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| 3/17/2010, 02:56 PM by Mortgage News Daily |
Posted To: MND NewsWire The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending March 12, 2010. The survey covers over 50 percent of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates an increase in home buying interest, a positive for the housing industry and economy as a whole. Furthermore, in a low mortgage rate environment, such a trend implies consumers are seeking out lower monthly payments which can result in increased disposable income and therefore more money to spend on discretionary items or to pay down other debt. From the release... The Market Composite Index, a measure...(read more) |
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| 3/17/2010, 02:31 PM by Mortgage News Daily |
Posted To: Pipeline Press Father Murphy waited in line to have his car filled with gas just before a long holiday weekend. The attendant worked quickly, but there were many cars ahead of him. Finally, the attendant motioned him toward a vacant pump. "Father," said the young man, "I'm so sorry about the delay. It seems as if everyone waits until the last minute to get ready for a long trip." The priest laughed, "I know what you mean. It's the same in my business." Markets don't wait until the last minute, since they are usually driven by fear and greed. Yesterday's Fed announcement, although it was nothing new and left overnight rates unchanged, caused an immediate improvement in stocks and bonds. In mortgages, with originators selling and the Fed, hedge funds, Asian investors...(read more) |
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| 3/17/2010, 01:02 PM by Mortgage News Daily |
Posted To: MBS Commentary Good Morning. Happy St. Patrick's Day. The BLS released the Producer Price Index at 830am. Producer prices fell 0.6% in February following a 1.4% rise in January. The core read, which strips out volatile food and energy costs, rose 0.1% following a 0.3% uptick in January. Both prints were below consensus estimates, in effect confirming the Fed's lack of concern about inflationary pressures. Intermediate goods did see a slight increase in price levels though, led by rising prices paid for manufacturing materials. At the earliest stages of production, prices plummetted. Across all stages of production, falling energy prices in February accounted for the majority of deflation with gasoline being the biggest drag. The Fed doesn't put much emphasis on commodity induced inflationary pressures...(read more) |
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| 3/17/2010, 12:02 PM by Mortgage News Daily |
Posted To: MND NewsWire Despite yesterday’s news that housing starts fell nearly 6% in February (led by weakness in multi-family starts), stock markets managed to move upwards yesterday and this morning that upward trend continues. Sentiment was in part bolstered from the language of the FOMC statement, wherein the central bank said it would maintain "low levels of the federal funds rate for an extended period" and the "labor market was stabilizing". Two hours before the opening bell, Dow futures are up 30 points to 10,654 and S&P 500 futures are 3.75 points higher at 1,158.50. With equities up, the US dollar is looking weaker. Meantime, the Euro rose overnight and the pound was the top performing currency. Commodities are also heading upwards with WTI crude oil 79 cents higher at $82...(read more) |
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| 3/16/2010, 09:36 PM by Mortgage News Daily |
Posted To: MBS Commentary Bond Bulls In Control All Day Long Fannie 4.5's rise 7 ticks to 101-03 10yr note yield finally meets resistance at 3.65 Stocks end at best levels since Q308 Stocks face major test tomorrow to hold these levels In case you missed it, the news of the day was the FOMC statement. Just want us to pick out and discuss the juicy parts for you? Here: AQ RECAPS FOMC MINUTES Lock/Float already discussed in previous post here: MG DISCUSSES LOCK CONSIDERATIONS Other big news of the day here: Dodd's Releases Reform Package Need more discussion? Good Recap and More Lock/Float The MBS and Treasury bullet points at the top of the page can all be seen in today's chart. The "bulls in control" statement references that there was no major episode of losses (more evident in treasuries). AQ...(read more) |
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| 3/16/2010, 09:05 PM by Mortgage News Daily |
Posted To: Mortgage Rate Watch After moving higher following a worse than anticipated read on Retail Sales last Friday, mortgage rates made modest improvements yesterday. Activity in the fixed income marketplace was pretty boring though. Mortgage backed securities traded in an extremely tight price range as market participants sat on the sidelines in anticipation of the release of the FOMC Statement today. Before talking about the Federal Reserve, we have a few economic indicators to recap. First out this morning Housing Starts and Building Permits. Housing Starts data estimates how much new residential real estate construction occurred in the previous month . New construction means digging has begun. Adding rooms or renovating old ones does not count, the builder must be constructing a new home (can be on old foundation...(read more) |
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| 3/16/2010, 07:57 PM by Mortgage News Daily |
Posted To: MBS Commentary 4.5's up 8 ticks on the day to 101-04 10yr Tsy yield down just over 4bps to 3.65 S&P at 1159 (highest since sept. 2008, 9 pts higher than Friday) AQ brought you up to speed on FOMC statement, and the rest of the day has been pretty easy: just sit back and enjoy the healthy (but not insane) rally... Both MBS and Tsy's look to be honing in on their ranges established just after FOMC. A bit more volatility in MBS at the moment, but take some solace by the stronger and steadier showing from benchmark big brother: 10yr tsy. It's not like we're not expected to widen out from 10's, but when the benchmark is stable into a rally, it's one more variable we do not have to account for in identifying threats to pricing. Look for reprices for the better if you haven't seen...(read more) |
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| 3/16/2010, 07:47 PM by Mortgage News Daily |
Posted To: Community Commentary I have probably drafted around 15 different articles for a Community Commentary since the beginning of the year, but chose not to post them because for the most part they were rants about the absurdity of RESPA, the idiocy of HVCC, the impotence of the CFPA. But as I read each draft, I felt I was simply regurgitating everything that is negative, feeding on the energy of discontent that anyone crazy enough to still be originating mortgage loans for a living is already experiencing. Instead, I asked myself what is right about the mortgage industry? What can we take away as positives in this community? Rays of light that can been seen as a hopeful sign of good things to come, rather than evidence of another hurtling train coming to decimate what is left of the non-big bank mortgage lending community...(read more) |
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| 3/16/2010, 06:15 PM by Mortgage News Daily |
Posted To: MBS Commentary The FOMC Statement has been released. First and foremost, there was no significant change in the verbiage regarding the end of the MBS Purchase Program. Here is how the statement reads: "To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month " The text that follows the above statement was slightly adjusted in a manner that leaves the door open for a program extension. "The Committee will continue to monitor the economic outlook and financial developments and will employ its...(read more) |
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| 3/16/2010, 05:21 PM by Mortgage News Daily |
Posted To: The Garrett Watts Report We’ve been writing a lot on the profits of high performing mortgage bankers in 2009. Last year looks to have been a great year for most mortgage bankers, especially for those who originated FHA loans and sold them through mandatory delivery commitments. Higher performers made in excess of 65 basis points in pre-tax profits. Common denominators among high performers are the size, components and deployment of their capital. The higher performers had a strong balance sheets and were very liquid. They used their capital wisely to exploit opportunity in the market. Some of the key uses of capital and liquidity were the following: Capital was used to procure and build warehouse lending capacity to support their production expansion strategies Increase warehouse capacity helped to improve the...(read more) |
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| 3/16/2010, 04:09 PM by Mortgage News Daily |
Posted To: MND NewsWire Remember the tale of six blind men who were asked to describe an elephant so each grabbed hold of a piece of the beast. The man who took hold of the tail described the elephant as a rope, the one who touched the leg said it was a pillar, and the one who felt the trunk said the elephant must look like a snake. Pretty much the same thing happened when Senator Christopher Dodd released his proposed bill to Restore American Financial Stability. While some of the people who might be expected to react such as The U.S. Chamber of Commerce and the New York Stock Exchange have thus far been silent, a lot of individuals and groups have grabbed the piece of it that they care about and are either praising the bill - or bashing the hell out of it. Washington Post columnist Steven Pearlstein in an interview...(read more) |
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| 3/16/2010, 03:16 PM by Mortgage News Daily |
Posted To: MBS Commentary I've gotten quite a few emails from panicked pipeline managers and loan writers regarding Meredith Whitney's bearish feelings on the Fed's exit from the MBS market and the general health of housing. If you missed it... THIS STORY is a decent recap of the CNBC interview. If you are asking, WHO IS MEREDITH WHITNEY?....she is an influential Wall Street banking analyst and independent investment researcher. She was notoriously bearish about the banking system before the worst days of the current financial crisis...and got a lot of attention because of it. Her guidance, outlook, and opinion have the ability to move markets.... This morning, Meredith correctly called attention to the fact that the macroeconomic recovery is largely dependent on the health of housing. Whitney is concerned...(read more) |
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| 3/16/2010, 02:49 PM by Mortgage News Daily |
Posted To: MND NewsWire Yesterday, just one day shy of the second anniversary of the Bear Stearns collapse, Senator Christopher J. Dodd (D-CT), chairman of the Senate Banking Committee, released his long awaited proposal to overhaul the nation's financial regulations. The changes, viewed by many as the most sweeping since the Depression, are apparently backed by the Obama administration. Dodd said that the overhaul is designed to stabilize the nation's financial system in the hopes of preventing a repeat of the near collapse of major players in the fall of 2008. However, forces are both the right and the left appear ready to do battle over many parts of the proposal. Dodd had been working on the proposal with one of the leading members of the committee, Senator Bob Corker (R-TN), but recently decided to finish...(read more) |
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| 3/16/2010, 02:20 PM by Mortgage News Daily |
Posted To: Pipeline Press Not a day passes whereby an employee in a mortgage bank doesn't start a grease fire (which they claim is an accident) in the kitchen. In all seriousness, here's a worthwhile 45 seconds . In a story from the New York Post, GMAC has hired Goldman Sachs to start the process of selling Res Cap . Between GMAC being mostly owned by the government ($17 billion for 56%), and Res Cap losing billions of dollars, and Warren Buffett's Berkshire Hathaway owning a sizeable chunk of ResCap's debt, it could make for an interesting story. Recently the committee overseeing how money from the Troubled Asset Relief Program is managed issued a report on how the government has handled the GMAC bailout, saying "it is deeply concerned that Treasury has not required GMAC to lay out a clear path...(read more) |
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| 3/16/2010, 12:48 PM by Mortgage News Daily |
Posted To: MBS Commentary Housing Starts and Building Permits fell in February. Housing Starts moved 5.9% lower to 575,000 annualized units, almost erasing the 6.6% gain seen in January. While this was a poor print for housing starts, the market was expecting worse...hence this is easier for traders to shrug off. Building Permits were 1.6% weaker in February at an annualized rate of 612,000. This follows a 4.7% decline in January but was essentially "on the screws" as forecasts called for an annualized pace of 610,000 permits. So again....crappy data, but not worse than anticipated. Looking a little deeper, most of the weakness in Housing Starts was a in mutli-family. SFRs barely budged while multi-unit fell from 109k units in Jan to 76k units in Feb. The same can be said about Building Permits...Single-family...(read more) |
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| 3/16/2010, 12:11 PM by Mortgage News Daily |
Posted To: MND NewsWire The dollar is weaker and equities look to open higher as investors await the afternoon policy statement from the Federal Reserve Board. Two hours before the opening bell, Dow futures are up 16 points to 10,592 and S&P 500 futures are 2.00 points higher at 1,147.75. Commodities are also on the rise, with WTI crude oil up 18 cents to $79.98 per barrel and Spot Gold up $6.35 to $1,114.80. Key Events Today: 8:30 ― Snow storms and poor weather are expected to push Housing Starts down in February, following a 2.8% gain in January. Demand remains weak overall, though new construction on residential homes is up 21% from last year. Expectations among economists are diverse, ranging from 530k to 591k, and the consensus is 565k. “Although it is highly unlikely we will revisit the record lows...(read more) |
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| 3/15/2010, 10:24 PM by Mortgage News Daily |
Posted To: Mortgage Rate Watch Mortgage rates moved higher early Friday morning following a better than expected read on Retail Sales. However, as the day progressed, benchmark Treasury yields did move lower, helping mortgage-backed securities prices recover early session losses. Most lenders did not reprice for the better after these improvements though. After a slow week of economic data, the calendar picks up in the days ahead. Starting with manufacturing data this morning.... Each month, the New York Federal Reserve conducts a survey of approximately 175 manufacturing executives in New York State on the strength of business conditions. Readings above 0 indicate expanding or improving conditions while readings below 0 indicate contraction. This data has indicated steady improvements since August of 2009. The Empire State...(read more) |
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| 3/15/2010, 09:33 PM by Mortgage News Daily |
Posted To: MBS Commentary In shocking twist of events, MBS end where they begin, with 4.5 at 100-29 "Huge" change in treasuries too with 10yr at 3.695 vs. 3.701 coming into the day (a whole 6 thousands) Stocks rally to close right at their best levels from Friday, but no higher. Stock lever didn't hurt bonds. Tomorrow AM data of low to moderate importance: Housing Starts at 830 expected at .565 mln vs .591 mln previously Import/Export Prices at 830 (previously .8% MoM and 3.4% YoY on exports and 1.4% MoM and 11.5% YoY on imports) Important stuff later in day with FOMC announcement at 215pm Did you know that MoM and YoY refer to "month over month" change and "year over year" change, respectively? We use that from time to time, as do others. And armed with that little bit of knowledge...(read more) |
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| 3/15/2010, 08:33 PM by Mortgage News Daily |
Posted To: The Garrett Watts Report With all the moving and shifting, here are the most recent numbers on the largest banks ranked by assets: A few others you know are: #12 U.S. Bancorp ($265 billion), #17 BB&T ($165 billion), #23 Fifth Third ($110 billion), #33 Comerica ($59 billion), #82 Sterling Financial, Spokane ($11.9 billion). Top bank research firm Keefe, Bruyette has identified 21 distinct periods of bank performance starting in the early 1960s. Outperformance periods averaged 34 months in length, during which bank stocks outperformed the market by an average of 20.8% annualized. The under-performance cycles averaged 23 months, during which bank stocks lagged the market by 20% per year, on average. Our view is that an outperformance for small cps banks is just around the corner. A good example of how much access...(read more) |
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| 3/15/2010, 08:10 PM by Mortgage News Daily |
Posted To: MBS Commentary MBS 4.5's unchanged at 100-28 10yr Tsy at 3.703 Stocks Rallying BIG into their close with S&P at 1150, same as last week's ceiling Seems like the S&P rallying from 1143 to 1150 should be more important than it's actually turning out to be for bonds. Without looking at the stock market itself, you'd scarcely be able to infer that rally from any weakness in bonds. Indeed, treasuries and MBS yields have moved about as much as a fully depressed Toyota gas pedal. The focus remains on FOMC tomorrow. This is probably part of the reason stocks can get away with a late day rally without affecting bonds too much, not to mention there's limited volume behind it....(read more) |
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| 3/15/2010, 07:17 PM by Mortgage News Daily |
Posted To: MND NewsWire The National Association of Home Builders released their monthly Housing Market Index today. Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. In March, Builder confidence lost the small amount of progress seen in February...(read more) |
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