Mortgage and Finance

Mortgage News Daily

Posted To: MBS Commentary

Overnight trading was uneventful for bond markets and made for a just slightly weaker open for both Treasuries and MBS. Economic data was completely and utterly ignored. It wasn't until headlines out of the UK concerning a "severe" terrorism alert sent UK bond yields sharply lower that US bond markets finally found some motivation to get moving. From there, liquidity waned severely, leaving the market open to any significant month-end trade flows. In other words, if there were to be even a normal amount of month-end trading around the 3pm Treasury close, it would have an inordinate impact considering it would comprise such a comparatively large piece of the action. That's exactly what happened as tradeflows began picking up at 2:59pm. Volume spiked easily to the highest levels...(read more)

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8/29/2014 2:07:53 PM

Posted To: Mortgage Rate Watch

Mortgage rates barely budged today. A few lenders were a bit higher than yesterday. A few more were a bit lower, but most hadn't moved enough to be considered anything more than unchanged. Most borrowers would see the exact same quote today compared to yesterday. 4.125% remains the most prevalently quoted conforming 30yr fixed rate, but 4.0% is as close as it's been since May 28th. The lack of material improvement in mortgage rates is notable today, considering the underlying markets that most directly affect rates would indicate some improvement. This is one of the few instances where mortgage-backed-securities (MBS) will be in better shape without any noticeable effect on loan pricing. This phenomenon actually isn't that uncommon on the day before a 3-day weekend, and especially when it happens...(read more)

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8/29/2014 12:49:00 PM

Posted To: MND NewsWire

FICO, the company that develops proprietary scoring models for credit bureaus and lenders, announced August 7 that a new model (FICO Score 9) would be released this fall. FICO's press release caught buyers', Realtors', and lenders' attention, as the new model was touted as significantly more “borrower friendly”. Paid collections would no longer impact credit scores. Medical debts (paid or not) would hurt scores less as well. FICO predicted some consumers' scores could rise by 25 points, an amount that would significantly reduce their loan costs or interest rates. The pending changes (which followed a CFPB study on the fairness of FICO's scoring models) ignited a frenzy of optimism from Steve Brown, president of the National Assn of Realtors who gushed they would “make a real...(read more)

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8/29/2014 10:48:54 AM

Posted To: MND NewsWire

RealtyTrac estimated that home sales in July were at an annualized rate of 4.63 million units , a decrease of 3 percent from June and down 12 percent from July 2013. This would be the third consecutive month in which RealtyTrac has projected a decrease in sales volume and the report is sharp contrast to the Existing Home Sales report issued last week by the National Association of Realtors® (NAR). That report showed existing home sales rose 2.4 percent from June to July, the fourth straight month-over-month increases, to an annualized total of 5.15 million sales and a rate down only 4.3 percent from the previous July. The RealtyTrac report points to a decreasing share of distressed sales - bank owned real estate (REO) and short sales - in the transaction mix. REO accounted for 8.0 percent...(read more)

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8/29/2014 10:42:05 AM

Posted To: MBS Commentary

Right there in the title of the first commentary of the day: "more economic data that probably won't matter." There's always some small tinge of doubt in my mind before I preemptively dismiss the importance of things that have historically been important. That's probably why I qualified it with the "probably." But now we see that was probably unnecessary. Probably. Who knows how markets might have reacted if this morning's wage/spending data had been much farther from expectations? Considering that this morning's batch of economic data would certainly have been a market mover at most other moments in market history, the fact that it was completely overlooked says a lot about the current environment. Some market-watchers out there may even be a bit confused...(read more)

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8/29/2014 10:23:05 AM

Posted To: Pipeline Press

Cleverness is alive and well in lending, and the "free Russian cat with your loan funding" story yesterday brought a few e-mails. Chris L. contributes, "Thanks for sharing the idea about giving a cat at closing. That could be the 'purrrr-fect' house warming gift for our new borrowers. My concern is with our compliance department. If we give the cat as a gift, the single family residential property might then be viewed by them as mixed use since it is now a 'cat-house'. And Brian M. offers, "Those Russian Bank cats don't come free, I hope the cost is reflected on a separate Fee Line. If adopted here, this practice could be a catastrophe. Does the appli-cat-ion process determine who qualifies?" There is little cleverness or humor in commercial & multi-family servicing , and in fact is quite...(read more)

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8/29/2014 8:11:13 AM

Posted To: MBS Commentary

NOTE: Bond markets and mortgage lenders (and banks, among other things) will be closed on Monday for Labor Day. This morning's headline suggests that economic data "probably" won't matter, but if yesterday's activity is any indication, "probably" is far too generous. Markets shrugged off a trifecta of stronger data in favor of European market influence and to some extent, geopolitical risk. On top of that, there's also the matter of "month-end" which compels some bond market participants to hold a certain balance of Treasuries in order comply with their portfolio requirements. Keep in mind though, that there's usually an underlying theme in place, regardless of economic data or geopolitical events. When the data and events support the theme...(read more)

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8/29/2014 5:42:52 AM

Posted To: MBS Commentary

In yesterday's recap, we discussed the phenomenon whereby most of the market movement has been happening overnight during these Euro-centric times, with the US trading hours seeing comparatively less volatility. Same old story today, but more impressive! Bond markets managed to shrug off THREE stronger-than-expected economic reports, including a revision to GDP that took Q2 up to 4.2%. Yet not only did that data never materialize into selling pressure, but neither did the rest of the data or stock market gains. Fannie 3.5s traded a fairly narrow range and never dipped into negative territory. They're heading out an eighth of a point higher. The scariest dip happened heading into 2pm, but bonds bounced back. There was brief, modest reprice risk at the lows today. MBS Pricing Snapshot...(read more)

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8/28/2014 2:45:09 PM

Posted To: Mortgage Rate Watch

Mortgage rates fell modestly for an impressive sixth straight day today. Yet again, we're seeing little attention paid to the events in the US that NORMALLY influence interest rates. Case in point, stronger economic data typically pushes rates higher, and three out of three economic reports were stronger than expected today. The dark horse market consideration continues to be Europe. Specifically, expectations for further accommodation from the European Central Bank combined with real economic deterioration in the Eurozone are motivating record low rates in European bond markets and US markets are interconnected enough to get some of that benefit. We talked about this in more detail on Tuesday: ( Read More: How Long Will Low, Flat Mortgage Rates Last? ). The cumulative effect of the 6 days...(read more)

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8/28/2014 1:45:00 PM

Posted To: MBS Commentary

Even the confirmation of a 4%+ GDP and the strongest read on Pending Home Sales in 11 months were not enough to wrest control of bond market momentum from Europe. Particularly, market participants widely expect the European Central Bank (ECB) to announce some form of quantitative easing (QE) by March 2015. The ECB has not been shy about telegraphing that likelihood and markets have not been shy about pricing it in. It's dominated bond market momentum since early April and continues to make domestic economic data look irrelevant for Treasuries and MBS. After all, ALL THREE of this morning's economic reports were stronger than expected, yet MBS are up 5 ticks and 10yr yields are down 2.5bps. Both are at the best levels in weeks and near their best levels in over a year. Bottom line, we...(read more)

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8/28/2014 9:42:35 AM

Reuters Business News

Reuters: Business News

LONDON (Reuters) - European markets cautiously navigated warnings that the conflict in Ukraine was sliding out of control, focusing instead on whether the European Central Bank will strengthen its stimulus plans when it meets this week.

9/1/2014 6:33:01 AM

NEW YORK (Reuters) - U.S. investors are back in the hunt for inflation protection for the first time in two years as rising housing costs - particularly for rent - suggest inflation may finally be waking from its post-recession slumber.

9/1/2014 6:20:27 AM

BANGALORE/SYDNEY (Reuters) - Factory activity in Europe and Asia cooled in August after a strong July, as new orders dwindled in the face of escalating tensions in Ukraine and a patchy recovery in China, purchasing managers indexes showed.

9/1/2014 5:57:15 AM

LISBON (Reuters) - Auditor KPMG has refused to approve bailed-out Banco Espirito Santo's first-half report and accounts, published on Monday, citing the bank's failure to provide adequate information on its financial position and also warned of possible further losses.

9/1/2014 5:30:04 AM

PRAGUE (Reuters) - Polish manufacturing activity shrank for a second straight month in August and Czech expansion slowed more than expected, adding to signs weaker euro zone economies and crisis in Ukraine are cooling growth in the EU's east.

9/1/2014 5:03:24 AM

PARIS (Reuters) - German Finance Minister Wolfgang Schaeuble renewed a call for a core group of European Union countries to move ahead faster with economic and political integration, 20 years after his ground-breaking proposal fell on deaf ears in key partner France.

9/1/2014 4:14:22 AM

BEIJING (Reuters) - A Chinese anti-trust regulator said on Monday it has given Microsoft Corp 20 days to reply to queries on the compatibility of its Windows operating system and Office software suite amid a probe into the world's largest software company.

9/1/2014 4:00:52 AM

LONDON, (Reuters) - Euro zone manufacturing growth slowed slightly more than initially thought last month as new orders dwindled and factories suffered amid rising tensions in Ukraine, a business survey showed on Monday.

9/1/2014 2:12:33 AM

TOKYO (Reuters) - The Bank of Japan will maintain its existing stimulus policy and optimistic economic view when it meets on Thursday, sources say, preferring to take more time to gauge whether a run of weak data is sufficient to threaten a fragile recovery.

9/1/2014 1:24:38 AM

BERLIN (Reuters) - Weak investment spending and slow trade led Germany to contract for the first time in over a year in the second quarter, data showed, suggesting Europe's largest economy is running out of steam just as the impact of the crisis in Ukraine starts to bite.

9/1/2014 1:21:06 AM
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