Posted To: MND NewsWire

Existing home sales fell hard in April, the numbers coming in about where analysts expected them but breaking a nine-month string of annual gains. The National Association of Realtors® said total sales of single-family homes, townhouses, condos, and cooperative were at a seasonally adjusted annual rate of 4.33 million, down from the 5.27 million sold in March, a 17.8 percent decline. It was the lowest level of sales since July 2010 (3.45 million) and the largest month-over-month drop since July 2010 (-22.5 percent). The loss, which NAR said was due to the coronavirus pandemic, brings the aggregate decline over the last two months to 26.3 percent. Sales are now down 17.2 percent from the 5.23 million rate in April 2019 The rate of sales almost matched the 4.325 million-unit consensus estimate...(read more)

5/21/2020 10:33:46 AM

Posted To: MND NewsWire

Interest rates on closed loans continued to decline in April, falling from 3.65 percent in March to 3.48 percent according to the Origination Insight Report from Ellie Mae. That prompted another surge in refinancing , with that portion of originations jumping from 55 percent in March to 65 percent. The refinancing share of conventional loans also rose 10 percentage points to 73 percent. The share of conventional loans also surged , from 76 percent to 81 percent and continuing a trend that began in January. Conventional loans accounted for 71 percent of originations that month. The April share of FHA loans dropped 3 points to 10 percent in April and the VA share dipped to 1 point to 6 percent. The time to close all loans increased from 40 to 42 days, although refinancing time lengthened by four...(read more)

5/21/2020 8:58:50 AM

Posted To: MND NewsWire

Maybe all of the talk about ending the GSE's long term incarceration in conservatorship is more than talk this time. Earlier this week both Freddie Mac and Fannie Mae announced they would be issuing Requests for Proposals (RFPs) seeking to hire financial advisors to that end. Then, late Wednesday, the Federal Housing Finance Agency (FHFA), the GSE conservator, said it was seeking comments on proposed revisions to its own 2018 proposal to establish a new regulator capital framework for the two companies. FHFA said the changes to its proposal "ensure each [GSE's] safety and soundness and its ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress. The re-proposal is also a critical step toward responsibly ending the conservatorships...(read more)

5/21/2020 8:13:26 AM

Posted To: MBS Commentary

Treasuries held onto yesterday's gains in the overnight session and are starting the day in slightly better shape (MBS are roughly unchanged). This means that 10yr yields continue adhering to a technical pattern we've been following for the past few weeks AND that we may get to see that pattern put to the test in the day ahead. The pattern in question is one of the simplest: a trend channel consisting of parallel lines drawn along the recent highs and lows in any given market instrument. Placement of these lines is open to some degree of interpretation. For instance, in our version, I have the lines set based on opening and closing levels and some of the intraday noise has been tuned out. That doesn't mean the intraday levels are irrelevant, just that I needed/wanted lines that...(read more)

5/21/2020 8:03:26 AM

Posted To: Pipeline Press

Some lenders and vendors are easing back into offices, or at least planning voluntary phases. (Hmmm… wear a mask and have 2 per elevator, or work from home with no commute and wear sweats. Let me think.) Instead of thermal scanners in every office lobby, can’t we just have our mothers kiss our foreheads to test our temperature like when we were kids? And when we were kids, we could get away with saying, “I don’t wanna!” Apparently some still can say that when it comes to making mortgage payments, since 4.1 million borrowers are in forbearance right now but, per Forbes, over 70% don't need the help ! The FHFA is keeping abreast of forbearance trends, and it released a notice of proposed rulemaking (NPR) outlining a new capital rule for the Enterprises (aka, Freddie...(read more)

5/21/2020 8:00:28 AM

Posted To: Mortgage Rate Watch

Mortgage rates fell again today. Whereas yesterday's improvements arrived in choppy fashion only after many lenders quoted higher rates in the morning. Today's improvement was more conclusive and more consistent from lender to lender. While there were a handful of mid-day improvements in response to bond market strength, most lenders were at least as low as they'd ever been to start the day. Many lenders were decidedly lower, bringing the average top tier conventional 30yr fixed quote dangerously close to cracking below the 3.0% barrier. If you're hearing about rates in the high 2% range, shaking your head, and scoffing , know that you are not alone. It continues to be the case that rate offerings vary quite a bit from lender to lender. They can also be vastly different for different scenarios...(read more)

5/20/2020 4:53:00 PM

Posted To: MND NewsWire

With the number of homeowners under forbearance plans nearing 10 percent of all of those having a mortgage, a Lending Tree survey indicates that most of those borrowers did not actually need the help. One quarter of the homeowners surveyed by the company said they had applied for forbearance because of a COVID-19 hardship, and of those, 80 percent were granted one. However, only 5 percent said they wouldn't have been able to pay their mortgage without forbearance. Lending Tree says that lenders typically require borrowers to prove they're experiencing a financial hardship in order to qualify for forbearance. However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress lets homeowners with government-backed loans apply for forbearance without having to prove a hardship...(read more)

5/20/2020 9:44:50 AM

Posted To: MBS Commentary

I've been mentioning MBS outperformance and underperformance quite a bit recently, but what do these terms really mean and why do we care? First off, we always care about strength and weakness in mortgage bonds as they are the primary building block in determining mortgage rates (i.e. higher MBS prices = lower rates , all other things being equal). We also care about strength and weakness in Treasuries because mortgage bonds typically correlate amazingly well with Treasuries (so much so that many mistakenly believe 10yr Treasury yields serve as a basis for mortgage rates). The type of volatility seen in March exposed a few eye-opening truths. The first was that mortgage bonds can and do deviate from 10yr yields at times. March offered the most extreme example we've seen since the financial...(read more)

5/20/2020 8:50:00 AM

Posted To: Pipeline Press

Jury trial by Zoom? Leave it to Texas to give it a shot. Michigan and Indiana are now offering the bar exam online for aspiring attorneys. Out of Pennsylvania comes news that Gov. Tom Wolf issued an executive order that allows real estate to open on a statewide basis effective yesterday, subject to certain guidelines. Florida has entered “Phase 1” of re-opening, with gyms, retail stores, and restaurants at 50 percent capacity. California , home to nearly 25% of the residential mortgage production of the United States, has entered “ Phase 2 ” but of great concern to every residential lender is AB 2501 with its draconian penalties. (Here’s an analysis of the bill which yesterday moved from the Assembly Banking Committee to its Appropriations Committee.) Nationwide...(read more)

5/20/2020 7:47:18 AM

Posted To: MND NewsWire

Purchase mortgage applications extended their recent run of gains through the week ended May 15. The Mortgage Bankers Association (MBA) said its Purchase Index rose 6 percent compared to the previous week on both a seasonally adjusted and unadjusted basis. It was the fifth straight week of improvement, and the index, which was down by as much as 35 percent from a year earlier in much of April has narrowed that gap to 1.5 percent. MBA's Market Composite Index, a measure of overall application volume, was down 2.6 percent on a seasonally adjusted basis and 2 percent unadjusted, dragged down by the 5 th consecutive decline in refinancing. The Refinancing Index fell back by 6 percent compared to the prior week, but was still 160 percent higher than during the same week in 2019. Refinancing applications...(read more)

5/20/2020 7:25:56 AM