Mortgage Loans

Harmony Of The Trends And The Whole Day Explained In One Chart

Posted To: MBS Commentary

(A bit long, but another worthwhile closing post to read... with some not-often-phrased-in-such-a-way explanations. I enjoyed writing it at least. Let me know what you think.) You know the "stock lever?" If not, that's the term we use to describe the common occurrence of stock prices and bond prices moving in opposite directions. Doesn't happen all the time, but in a general sense, sure. Last night we talked about both stock and bond markets closing at some pretty long term "on the fence levels" and so it was a reasonable assumption that it was up to retail sales and whatever else Friday could muster to convince stocks to go one way and bonds to go the other. I didn't have the minerals to offer a solid prediction, but simply that it could be a big day either...(read more)

Posted: Fri, 12 Mar 2010 23:47:00 GMT

Mortgage Rates Higher After Retail Sales Data. Floating into Monday

Posted To: Mortgage Rate Watch

While benchmark Treasury yields moved slowly higher throughout the course of the week as our government auctioned debt to raise spending money, mortgage-backed securities managed to maintain a pretty consistent price range. After all was said and done and the auctions were behind us, mortgage rates were left basically unharmed, near the best levels of 2010. There was one more test to pass though: RETAIL SALES DATA. The Commerce Department released Retail Sales data at 8:30 am eastern this morning This report shows the monthly change in the total receipts at retail stores. Since consumer spending accounts for a large majority of GDP, market participants track retail sales to gauge economic growth. Last month’s report posted a 0.5% increase, a notable improvement from December’s disappointing...(read more)

Posted: Fri, 12 Mar 2010 21:20:57 GMT

What Did Top Performing Mortgage Bankers Earn in 2009?

Posted To: The Garrett Watts Report

Audited financials are starting to come in, and they’re confirming what we saw all year. Top performing mortgage bankers made 90-100 bps per loan. That means, for every $100 million you closed, you should have (and could have) earned $900,000 to $1 million. If you didn’t make this much, you need to look carefully at why you didn’t. Or call us for a FOCIS-plus diagnostic to see what you can do to boost earnings per loan. The top quintile of companies we worked with over the year made over 100 bps per loan, with the top performer making 121 bps. For every $100 million they closed, they made $1.21 million. What most mortgage company Boards are somewhat clueless about is their earnings broken down into bps per loan. We see companies that did, say, $1 billion last year and earned...(read more)

Posted: Fri, 12 Mar 2010 20:51:21 GMT

MBS LUNCH: Mortgages Left Behind as Benchmarks Rally

Posted To: MBS Commentary

It was an interesting morning in the rates world. Let's start with our fearless leader, the benchmark 10 year note. In below average trading volume, yields rose marginally (at most) in the overnight session before popping higher on the heels of a much better than expected Retail Sales print at 830. After that we noticed some nibbling from real money accounts as 10s hit session price lows (yield highs). This bargain buying coupled with a short covering bid helped push yields lower ahead of the release of Consumer Sentiment survey results, which turned out to be worse than expected at 72.5 vs. forecasts for 73.6. The reading was however not far from the six month average and much improved from levels one year ago. Here is a table of the results: On the surface this data appears to be bond...(read more)

Posted: Fri, 12 Mar 2010 19:50:00 GMT

Fitch Ratings: Expiring Housing Incentives Likely to Increase Loan Losses this Year

Posted To: MND NewsWire

Fitch Ratings is warning that the expiring homebuyer tax credits, the end of the Fed's MBS Purchase Program , and the growing maturity of various government loan modifications programs are likely to increase loss severities on distressed mortgage loans later this year. The report says that these factors as well as low interest rates and the Federal Reserve's $1.25 trillion mortgage-backed securities purchase program have led to an improvement in both home prices and loss severities since the second quarter of 2009, but this is unlikely to continue. The $8,000 tax credit for first-time homebuyers and $6,500 credit for move-up buyers will be effectively expiring with the deadline for signed sales contracts on April 30. Buyers must complete the sale by June 30 so any drop off in sales...(read more)

Posted: Fri, 12 Mar 2010 17:51:11 GMT

USDA Rural Housing Funds to Run Dry by April. Lenders Already Dropping the Program

Posted To: MND NewsWire

USDA Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. There is no required down payment. The lender must determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt. John Rodgers called my attention to the following bulletin released by the USDA: This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010 . Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds. ” This...(read more)

Posted: Fri, 12 Mar 2010 17:04:00 GMT

Freddie Mac Announces Cut Off Date for Interest Only Loan Apps

Posted To: MND NewsWire

As reported on February 26 , Freddie Mac has decided to stop purchasing and securitizating loans utilizing the interest only payment option. Freddie's deadline for PURCHASING these loans was set as September 2010, however no application/LP approval date cut-off was provided in the bulletin. This deadline was announced yesterday in Bulletin 2010-7 Here is the verbiage from the release: Effective for mortgages with application dates on or after June 13, 2010 , and for mortgages with Freddie Mac settlements on or after September 1, 2010 we are: Retiring our Initial InterestSM Mortgage offering. Beginning June 13, Initial Interest Mortgages will not be eligible for submission or resubmission to Loan Prospector® . Plain and Simple : if you want to sell Freddie Mac an interest only loan,...(read more)

Posted: Fri, 12 Mar 2010 15:43:00 GMT

Fed MBS Program Update: 98.1% of Funding Used. Looming Exit Yet to Hurt Rates

Posted To: MND NewsWire

The Federal Reserve reported on their weekly purchases of agency mortgage-backed securities (MBS). In the week ending March 10, 2010, the Federal Reserve purchased a gross total of $29.4 billion agency MBS. In that week the Fed sold $19.4 billion mortgage-backeds (supported the roll), for a net total of $10.0 billion agency MBS purchases. While this amount is unchanged from the previous week, the broader trend of a decline in weekly purchases continues. 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...(read more)

Posted: Fri, 12 Mar 2010 14:46:00 GMT

Loan Officers Who Sell Real Estate; Wells Expands Market Making in Mortgage-Backeds; FDIC Acts on a Thursday; Freddie Mac Bulletin

Posted To: Pipeline Press

Don't forget to "Spring Ahead" this Sunday morning. We lose an hour of sleep. The FDIC made a rare Thursday move and shut down LibertyPointe Bank This bank catered to the Orthodox Jewish community in Manhattan and Brooklyn, and will be taken over by Valley National. For anyone hedging with securities, there's a new broker dealer in town. Well, maybe not so new, but Wells Fargo Securities , who apparently is making a market in trading MBS's, according to news sources will add Kevin Jackson to its residential mortgage-backed securities (MBS) team. Jackson is leaving Merrill Lynch Bank of America to join Wells as part of a broader move to expand that platform. Did you hear the one about the parrot and Bank of America ? A nun and a parrot walked into a branch... never mind...(read more)

Posted: Fri, 12 Mar 2010 14:42:42 GMT

Retail Sales Improve Across the Board. Rates Move Higher

Posted To: MBS Commentary

Retail Sales data has hit screens. It was much better than expected. Rates no likely. February, Retail Sales rose 0.3% vs. an expected decline of 0.2%vs. a revised for the worse +0.1% print in January (from +0.5%) . Excluding autos, sales rose 0.8%, crushing forecasts for a 0.1% improvement. Looking deeper into the data, percentage gains were led by the electronics/appliances category as well as food and beverage buying (snow storm help that out?). Miscellaneous store sales were up 2.5% too. Year over year, retail sales are up 3.9%. Remember how bad things were at this time last year.... Looking at the data in terms of actual dollars spent. Excluding autos...retail sales improved in every category except health care. Food and beverage and general merchandise sales were notably large, also note...(read more)

Posted: Fri, 12 Mar 2010 14:20:00 GMT

The Day Ahead: Euro Data Pushes Stocks up Ahead of Retail Sales

Posted To: MND NewsWire

Equities are higher and the dollar is weaker following positive data from Europe and ahead of key retail sales numbers at home. More than two hours before the opening bell, markets edging higher with Dow futures are up 21 points to 10,569 and the S&P 500 pointing up by 2.25 points to 1,148.25. Meantime, the dollar is slightly weaker, WTI crude oil is up 51 cents to $82.62 per barrel, and Spot Gold is up $7.93 to $1,117.43. Sentiment was boosted as Eurozone industrial production hammered expectations and jumped 1.7% in January, marking the biggest gain in more than two decades. Figures for December were also revised up. Industrial production also jumped 2.7% in Japan, also beating expectations. Back in the US, headlines are beaming that Janet Yellen, president of the San Francisco Fed, has...(read more)

Posted: Fri, 12 Mar 2010 13:06:54 GMT

MBS OPEN: Rates at Crossroads. What Range Will Prevail?

Posted To: MBS Commentary

Good Morning. Once again, rate futures prices moved modestly lower in the overnight session...albeit in below average volume (again). What is obvious to me is the 10 yr contract's failiure to break through what I have been calling "position resistance". This is the price range where the most recent high volume sell off occurred 116-24 and 116-30 I suppose it is appropriate to take some solace from the fact that 10s are not doing worse, especially when you consider that stock futures made further gains overnight. After four days of a limited data, which made it easy for traders to bake in a concessionary backup in TSY yields, the week's most important econ event is upon us: RETAIL SALES In the MBS CLOSE , MG called attention to a technical crossroads in benchmark 10s, "rate...(read more)

Posted: Fri, 12 Mar 2010 12:40:00 GMT