Mortgage and Finance

Mortgage News Daily

Posted To: Pipeline Press

What, if anything, is putting a crimp in expected loan production? Perhaps the CFPB's QM rules are indeed restricting residential lending. In one example, here is what the public sees on the narrow QM DTI box . But hey, no one at the CFPB ever said that non-QM loans were bad loans, although the consequences from unintentionally doing a "bad" loan are truly on the collective mind of the industry. It is just so darned hard & expensive to originate a "perfect" loan... "Rob, it seems like all my co-workers are yapping about risk. Is there anything different about the risk lenders have now versus 10 or 20 years ago?" Yes and no. The basic risks are the same , but the importance, scope, and minimization of risk have increased dramatically, as has the cost of reducing it. There's no position of...(read more)

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7/22/2014 7:50:47 AM

Posted To: MBS Commentary

2014 has been an interesting year for bond markets. In fact, in terms of its ability to continually confound market expectations, it's been one of the most interesting years of the recovery. This is not because there's been any large and unexpected movement. Rather, it's because there's been an absolute LACK of big, unexpected movements! Although markets have come to terms with the fact that rates can be lower this year, that's not the end of the frustration . Bonds have found a new way to confound by detaching from economic data. Now, on any given day, tradeflows, geopolitical risk or overseas considerations (EU QE for instance) could trump the suggestions made by economic reports. It's good to stay a bit skeptical of any notion that geopolitical risk has absolute power...(read more)

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7/22/2014 5:39:43 AM

Posted To: MBS Commentary

If you haven't heard already (say, like 7 or 8 times from us--both before and after the fact), today's calendar was fairly light for bond markets. In terms of scheduled economic data, there was nothing significant. The slow nature of the day was reinforced right out of the gate as Japan was out on holiday (Japan is almost single-handedly responsible for the first several hours of overnight trading in Treasuries). European trading didn't add much to the equation either. Most of the movement came in response to equities markets as well as a few headlines concerning the situation in Ukraine. I'd hesitate, in general, to credit geopolitical headlines with too much movement at this point, however. In the days that follow a big reaction to geopolitical risk, it tends to get too much...(read more)

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7/21/2014 3:36:47 PM

Posted To: Mortgage Rate Watch

Mortgage rates moved just barely lower in most cases today, though some lenders were unchanged or slightly higher. It was a slow start to the week as far it concerns the financial markets that underlie rate movements. There were no significant economic reports and markets generally moved in unison based on geopolitical headlines (i.e. stock prices and rates moved higher and lower together). With the limited movement, 4.125% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios. Any changes in quotes over the weekend would only affect the closing costs, and even then, they'd be minimal. This also means that rates are staying well-inside a narrow range over the past two months, though they're nearer the lower end of that range at the moment. While further improvement...(read more)

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7/21/2014 2:18:00 PM

Posted To: MND NewsWire

Two Bank of America Merrill Lynch (BAML) analysts are defending what they call their big high conviction views for what should happen in the housing world over the next two years. Chris Flanagan and Gregory Fitter, ABS and MBS strategists say that their views are not mainstream but that recent data has corroborated their theories. The two contend that home price increases will continue to moderate from the skyrocket trajectory they were on in late 2012 and early 2013 will peak in mid-2016 . Second, as unemployment continues to ease, the yield curve will continue to flatten (longer term rates getting lower while shorter term rates get higher, relative to each other) and the spread between two year and 10 year treasury yields should be at zero by the time home prices peak. The long end of the...(read more)

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7/21/2014 12:24:32 PM

Posted To: MBS Commentary

With no major economic data on the calendar, and no game-changing headlines to react to, bond markets have been content to follow stocks so far this morning. Stocks are weaker and bonds are stronger. There's not much more to it than that. This dynamic didn't really begin until the domestic session. Overnight trading was quiet as Japanese markets were closed for a holiday. European trading was sideways on either side of unchanged. Stocks and bond yields began sliding together just after 8am. MBS have generally been doing a better job of keeping pace with Treasuries since Friday. Fannie 3.5s are the most relevant coupon for rate sheets at the moment and they're up nearly a quarter of a point on the day. MBS Pricing Snapshot Pricing shown below is delayed, please note the timestamp...(read more)

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7/21/2014 9:35:34 AM

Posted To: Pipeline Press

What can you buy on minimum wage? Well, I guess that's a relative question; relative to a number of factors such as where you live, your current monthly expenses, and savings rate; however, I'm going to guess 'not much'. Zillow writes, "In 2013, 3.3 million Americans worked in a job that paid at or below the federal minimum hourly wage of $7.25. For many of these workers, finding affordable housing is a constant challenge. Still, nearly two-thirds of suburban minimum wage earners, and nearly half of urban minimum wage earners, owned their own home. Of course, the ownership rate does not capture important differences in home size, amenities, convenience and quality, but is nonetheless illustrative of the options that minimum wage earners frequently encounter." It sure helps to know what is going...(read more)

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7/21/2014 7:47:55 AM

Posted To: MBS Commentary

In many ways, the current week will serve as a prelude to the following week, which is exceptionally packed with big-ticket events . From Wednesday to Friday (next week), we'll get the first look at Q2 GDP, ADP Employment, the last Treasury auction of the week, an FOMC Announcement, 'Month-End' (which can increase bond market activity/volatility), and NFP Friday on August 1st. To whatever extent markets are willing to respond to economic data and monetary policy by then, it's our best chance to witness a break from what has been a mostly sideways range. That's not a guarantee, however, because the reason for the sideways range has a lot to do with US bond markets being weighed down by global markets. This is especially evident in Treasuries' most closely-related cousin...(read more)

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7/21/2014 5:33:43 AM

Posted To: MBS Commentary

The amount of geopolitical turmoil in the world today is not materially better than yesterday, but without new surprises to fuel safe-haven demand, bond markets found no reason to extend the rally . That said, if the rally was somehow overdone or made stronger by something like 'snowball buying,' we would know it today. The fact that there wasn't a more pronounced pull-back is a testament to the gravity of the situation and the real presence of safe-haven demand yesterday. MBS started the day about 3/32nds weaker and are now heading out in roughly the same territory. The weakness was more severe heading into the noon hour, but 10 yields had a firm bounce at 2.50%, which marked the end of selling momentum in bond markets for today. Weekends can always bring significant developments...(read more)

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7/18/2014 2:02:12 PM

Posted To: Mortgage Rate Watch

Mortgage rates managed to hold their ground today. Some lenders were even in slightly better shape, though there was no change on average. That's somewhat interesting considering the bond markets that most directly affect rates were in slightly weaker shape today. In short, market movement pointed to higher rates. So how did they manage to hold steady? Today's somewhat counterintuitive strength is really the story of yesterday's completely understandable hesitation. Yesterday was driven by several unexpected and relatively shocking headlines. While it's not uncommon for bond markets to respond to such events, it's just as likely that the trading levels will bounce back a bit after the first phase of the reaction. Whether that happens sooner or later, lenders don't perceive such events as having...(read more)

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7/18/2014 1:11:00 PM

Reuters Business News

Reuters: Business News

NEW YORK (Reuters) - U.S. stocks rose on Tuesday as inflation data was seen keeping the Federal Reserve in an equities-friendly tone, while hopes rose for an easing of tensions in Ukraine.

7/22/2014 9:16:15 AM

(Reuters) - Quarterly profit at McDonald's Corp fell more than expected after established restaurants in its struggling U.S. division turned in a third straight quarterly sales decline and results from Europe also logged a surprise drop.

7/22/2014 8:41:51 AM

WASHINGTON (Reuters) - U.S. home resales rose in June to their fastest pace in eight months, a signal that the housing market was pulling out of a slump.

7/22/2014 8:26:21 AM

(Reuters) - Verizon Communications Inc, the largest U.S. wireless telecommunications company, reported better-than-expected quarterly revenue on a jump in wireless customers and a surge in tablet sales.

7/22/2014 8:20:37 AM

(Reuters) - Coca-Cola Co reported lower-than-expected quarterly revenue as sales volumes in North America, its biggest market, failed to show growth for the second straight quarter.

7/22/2014 8:06:43 AM

ZURICH (Reuters) - Credit Suisse Group AG will quit commodities trading after chalking up its biggest loss since the financial crisis in 2008, the result of a 1.6 billion Swiss franc ($1.78 billion) fine from U.S. authorities for helping its clients evade taxes.

7/22/2014 7:49:35 AM

LONDON/MUMBAI (Reuters) - Indian generics firm Lupin , some U.S. drugmakers looking for a tax-saving deal in Europe and private equity funds are planning to bid for a range of older drugs being auctioned by GlaxoSmithKline (GSK) , five sources familiar with the matter said.

7/22/2014 7:37:00 AM

WASHINGTON (Reuters) - U.S. consumer prices rose in June as the cost of gasoline surged, but the underlying trend remained consistent with a gradual build-up of inflationary pressures.

7/22/2014 7:17:01 AM

WASHINGTON (Reuters) - JPMorgan Chase & Co has begun to provide the debt forgiveness and other help to struggling homeowners under last year's $13 billion accord with federal and state authorities, though it has only turned over a handful of details, a monitor of the deal said in a report released on Tuesday.

7/22/2014 7:02:49 AM

LONDON (Reuters) - European markets rode a global rebound in risk appetite on Tuesday, helped by the first signs of cooperation from Ukraine's pro-Russian separatists over the downed Malaysian Airlines plane.

7/22/2014 5:42:20 AM
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