Posted To: MBS Commentary

Earlier in the day we discussed movement in MBS prices that brought 4.5's to their lowest levels of the session, but we mentioned some support for MBS as well as some support for tsy yields that had been weakening at the same time. By closing time, those ranges identified much earlier in the day held up, carrying us into tomorrow, a data-free options expirations Friday with little to no suggestion for directionality. Turns out that 101-21 was a pretty solid area for 4.5 support. And in 10's, despite a couple exploratory movements toward 3.36, 10's finished in better territory vs. their support. Volume was evenly distributed and nothing to write home about as we were mostly on par with yesterday's levels. To reiterate the sense of uncertainty going into tomorrow, today did nothing…(read more)

Posted To: MND NewsWire

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the five trading days between November 12 and November 18, the Federal Reserve purchased a total of $17.23 billion agency MBS. In those five days the Federal Reserve sold $1.23 billion agency MBS (dollar rolls) bringing net purchases to a total of $16.00 billion, $2.5 more than the previous, holiday shortened week. The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and…(read more)

Posted To: MND NewsWire

Mortgage loan delinquencies continued to rise in the third quarter according to information released on Thursday by the Mortgage Bankers Association (MBA). Loans on one-to-four unit family homes that were delinquent, but not yet in foreclosure, reached 9.64 percent of all loans during the third quarter. This is an increase of 40 basis points over the second quarter of 2009, breaking the all time record set at that time . The rate is 265 basis points higher than the 6.99 percent delinquency rate reported one year ago. 3.57 percent of all loans were 30 days past due compared to 3.68 percent last quarter and 3.39 percent one year ago. 1.67 percent of all loans were 60 days delinquent compared to 1.68 percent and 1.40 percent on year ago Seriously delinquent loans - those over 90 days or in foreclosure…(read more)

Posted To: MBS Commentary

Heading into the close, the FN 4.0 is trading +0-02 at 99-09 yielding 4.078% and the FN 4.5 is +0-02 at 101-24 yielding 4.286%. The secondary market current coupon (CC) is 4.13%. The CC is +78/10yr TSY and +67/10yr swap. As you can see in the chart below, after prices fell early in the week, "rate sheet influential" MBS prices haven't made much progress in either direction with most of the price action occurring between 101-26 and 101-20. This should continue into today's close. Again…lock!…(read more)

Posted To: MBS Commentary

This is one of those obligatory alerts where price action in context doesn't justify an alert, but MBS prices have touched their lows of the day. In addition tsy's have broken out of their trend of improvement on the day with the 10yr backing up 3.35. Will there be reprices? Tough to say, considering the nice, flat resistance going back to yesterday at 11am. That coincides with some internal support at just over 3.35 in tsys. So personally, I wouldn't be rushing to lock anything that wasn't locked already. However, given the lock bias of the hedge ratio, that might constitute a different swath of your pipeline… If you can risk it, roll with it and wait to see if 3.35 tsy's break or 101-21 MBS breaks. Some lenders will reprice for the worse, but many will not (not unless…(read more)

Posted To: Voice of Housing

On the same day that Treasury Secretary Tim Geithner was in downtown Washington calling on banks to boost lending , up on Capitol Hill the House Financial Services Committee passed an amendment to that would do just the opposite. At an Obama administration summit on strengthening credit flows to small businesses, Geithner said “We need banks to be working with us, not against recovery." At the very same time on Wednesday, an amendment from Reps. Brad Miller and Dennis Moore would allow the FDIC to impose a 20 percent haircut on all secured creditors, including the 12 Home Loan banks, when resolving systemically important institutions that fail. The amendment, said to be pushed by FDIC chair Sheila Bair, is aimed at ending the Home Loan banks' priority status in the event of a…(read more)

Posted To: MND NewsWire

The interest rate on 15-year fixed-rate mortgages (FRM) set another record low this week, according to information released this morning by Freddie Mac. The Primary Mortgage Market Survey for the week ended November 19 showed rates down across the board, with the 15 year FRM averaging 4.32 percent, the lowest rate since Freddie Mac began tracking the mortgage in 1991. Last week the 15-year averaged 4.36 percent. Fees and points were unchanged at 0.6 point. The 30-year FRM averaged 4.83 percent with 0.7 point, down from the average of 4.91 percent also with 0.7 point a week earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.25 percent, a decrease of 4 basis points. Fees and points were unchanged at 0.6 point. One-year Treasury-indexed ARMs had an average rate…(read more)

Posted To: Mortgage Rate Watch

Trading action in the rates market yesterday was similiar to the previous session: early morning weakness, followed by a move higher in the lunch hour, which was then lost heading into the close. News and events were fairly positive for the fixed income sector which helped spark the move higher in price, however profit takers were quick to step in and temper gains. Sounds like a lot of back and forth with no real progress in either direction right? EXACTLY! This choppy price action illustrates a market that is "range trading", which is what we have been discussing since early summer. This morning the Department of Labor released the weekly unemployment claims report, aka jobless claims. This data totals the number of Americans who filed for first time unemployment benefits in the…(read more)

Posted To: MBS Commentary

Thursday's tend to be data-rich and today is no exception. After the "with us as always" jobless claims at 830, a concentrated dose of data and headlines hit at 10am. In the ongoing court case of Reality v. Stable Economic Recovery , Philly Fed survey served as chief counsel for the defense, topping expectations of 12.0 with a 16.7 reading. That was up from 11.5 reading in the prior month but did little to help already plummeting stocks. Philly Fed results did, however, give pause the the rally in bonds, but after a minor retracement, the LEI reading combined with the soothing words from Timayyy to bring bonds back to their strongest points of the past 2 days. Leading indicators printed down a tenth from from the .4, and the 0.3 actual was significantly lower than the previous…(read more)

Posted To: Pipeline Press

When I talk to realtors in many parts of the nation, they admit that foreclosures and short sales continue to be a key part of the housing activity in their area. Many analysts feel that the pace of short sales is likely to increase, especially given market conditions and the opinion that short sales are an alternative to foreclosure that can benefit the borrower and the lender. The lender sees potentially lower losses on the loan, and the borrower avoids the stigma of having a foreclosure on their credit history. The government continues to use various tools, such as modifications or foreclosure moratoria (moratoriums?) to prevent more loans from entering the REO market. The short sale option is mostly offered to borrowers who are ineligible for or have failed to succeed in loan modifications…(read more)