Mortgage News - Mike McCatty

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MORTGAGE NEWS

Keep current with what's happening in the mortgage market place. Below are links to news articles that pertain to the mortgage industry.

Mortgage News Daily
HUD Ready with FY2013 Budget	2/13/2012 4:14 PM
Posted To: MND NewsWire The Department of Housing and Urban Development (HUD) unveiled its 2013 budget proposal today, asking Congress for about $44 billion. The amount is roughly the same as the amount Congress authorized for the 2012 budget year. In addition, HUD is asking for authority to guarantee $400 billion in mortgages through FHA's Mutual Mortgage Insurance Fund which is expected to provide 1.2 million single family mortgages, $149 billion in loan volume, during the year and $500 billion in Ginnie Mae guarantee authority in order to help finance a wide array of government-insured products. In addition it requests $25 billion in loan guarantee authority for the General and Special Risk Insurance Panel which will provide an estimated 156,000 units in multifamily housing properties and 80,600 beds in health...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS RECAP: 2/13/2012	2/13/2012 3:24 PM
Posted To: MBS Commentary MBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 103-17 : +0-03 FNMA 4.0 105-10 : +0-02 FNMA 4.5 106-21 : +0-01 FNMA 5.0 108-01 : +0-02 GNMA 3.5 105-04 : +0-05 GNMA 4.0 107-25 : +0-04 GNMA 4.5 109-08 : +0-02 GNMA 5.0 111-02 : +0-02 FHLMC 3.5 103-08 : +0-04 FHLMC 4.0 104-30 : +0-02 FHLMC 4.5 106-06 : +0-03 FHLMC 5.0 107-23 : +0-01 Pricing as of 4:03 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 2:54PM : Fed Releases Orders Related to Banks in Mortgage Settlement The Federal Reserve Board on Monday released the orders related to the previously announced monetary sanctions against five banking organizations for unsafe and unsound processes and practices in residential mortgage loan servicing and processing...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage Rates Hold Steady To Begin Busy Week	2/13/2012 2:03 PM
Posted To: Mortgage Rate Watch Mortgages Rates held steady over the weekend. In fact, rates were so steady that our measured averages on Friday were the same as today's reading , which is a fairly uncommon occurrence. Friday had been a fairly stable day, and markets traded in better territory than Thursday. Rates had come under pressure recently, pushing the 30yr Fixed Best-Execution rate up to 4.0% in some cases, with Friday and now today offering some moderation back into the 3.875% range. (We explain even more about Best-Execution calculations in THIS POST ). News and events surrounding the current Greek bailout negotiations continue to drive markets, and it is perhaps the relative lull in those events that has bond markets and MBS (the "mortgage-backed securities" that most directly govern mortgage rates) trading near...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
AMI Takes Position against Mortgage Servicing Settlement	2/13/2012 11:42 AM
Posted To: MND NewsWire In a strongly worded statement on behalf of the American Association of Mortgage Investors (AMI), Jonathan Lieberman, Managing Director of Angelo, Gordon & Company, criticized the recent settlement agreement over alleged mortgage servicing and foreclosure processing abuses. Lieberman, told the Association's bondholders in a conference call that the settlement, reached last week between five major banks and their servicing subsidiaries, the Departments of Justice and Health Education and Welfare, and 49 of the 50 states' attorneys general that, "Current press reports tell a story of regulators imposing penalties not only on the bad actors but also on Americans' investors, pension funds, and retirees," and that "the rush to finalize a flawed and opaque settlement smells funny. Members of...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
After Morning Volatility, Bond Markets Back in Friday's Range	2/13/2012 11:20 AM
Posted To: MBS Commentary MBS and Treasuries continue to trade at significantly improved levels from this morning . Bond markets put in their first major bounce shortly after the domestic open on rumors that the private sector announcement that was set to follow Wednesday's Eurogroup meeting would be delayed. Since then, limited European headlines (none really...) and non-existent economic data left today's scheduled Fed buying as the primary market mover. Even though today's Fed buying was in the longest maturities, it provided an excuse to run the ball back up the field after overnight weakness. Volume has been quite light as markets are no doubt more interested in Wednesday's Greece-related headlines than those seen yesterday and this morning. 10's moved almost precisely to Friday's lowest yields and held there through...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS MID-DAY: 2/13/2012	2/13/2012 10:19 AM
Posted To: MBS Commentary MBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-18 : +0-05 FNMA 4.0 105-11 : +0-03 FNMA 4.5 106-22 : +0-02 FNMA 5.0 108-01 : +0-02 GNMA 3.5 105-04 : +0-05 GNMA 4.0 107-26 : +0-05 GNMA 4.5 109-09 : +0-03 GNMA 5.0 111-06 : +0-06 FHLMC 3.5 103-10 : +0-05 FHLMC 4.0 104-31 : +0-03 FHLMC 4.5 106-06 : +0-03 FHLMC 5.0 107-23 : +0-01 Pricing as of 11:04 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 9:59AM : ALERT: MBS Pop Higher on Meeting Delay Rumors Greece had been slated to announce the terms of Private Sector Investors' involvement in the bailout. This was expected to follow Wednesday's Eurogroup meeting and to indicate a hefty 70% haircut. Rumors that this announcement will not only be delayed...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Some 2011 Mortgage Volume Stats; EverBank to Buy MetLife Warehouse Lending	2/13/2012 8:47 AM
Posted To: Pipeline Press Sometimes, at 4AM PST, my cat disdainfully watches CNBC while I work on the finishing touches in the daily commentary. Cats spend an inordinate amount of time being disdainful, but my cat has the perfect outlook while watching, which is to remember that much of the show is slanted toward entertaining, which can be enjoyable but much of which detracts from the substantive economic news. (For one thing, they're always talking about "economic uncertainty" - heck, there is always uncertainty - it's the future!) Paul Jacob with Banc of Manhattan put out a good piece late last week talking about the markets which is not so uncertain and sums things up. "This is one of those periods where the bond market feels a lot more volatile than it really is. The range since November 1 has been 1.80-2.09% on...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Week Ahead: Domestic Data, Possible Greek Bailout Approval	2/13/2012 7:01 AM
Posted To: MBS Commentary Bond markets begin the week in slightly worse territory than Friday's after Greek parliament voted to approve the austerity measures requisite for the country's bailout funds. But in and of itself, the passing of austerity doesn't guarantee the release of Greece's next aid tranche . That fate is set to be decided at a Eurogroup meeting on Wednesday. Incidentally, a similar meeting stood out as an important economic event last week, but Greece was unable to reach a consensus on requisite austerity measures. As a results, this week's meeting was announced as a follow-up, ostensibly allowing Greek political leaders an opportunity to get on the same page. (As a bit of an aside, recall that Greece's PM Papademos last week said that any members of the government who didn't support austerity measures...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Saturday Lender Updates, Gossip and Interesting Letters from the Trenches	2/11/2012 1:34 PM
Posted To: Pipeline Press On the heels of the State of the Union address, the MBA has issued its annual State of the Mortgage Industry release, and the assessment is generally positive . The consensus was that states hit hardest by the housing crisis will continue to deal with the aftermath but that 2012 should see some degree of recovery. The MBA pointed to a number of recent upticks. Upheavals in the single family market have actually helped the multi-family market, for one. The rental market has seen some very positive activity, as more lenders, many of them life insurance companies, have moved into the sector. Of course, the residential market and refinancing remain thorns in the industry's side. MBA President and CEO Dave Stevens attributes the dearth of financing to market uncertainty, which has been aggravated...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS RECAP: 2/10/2012	2/10/2012 3:22 PM
Posted To: MBS Commentary MBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 103-15 : +0-06 FNMA 4.0 105-09 : +0-04 FNMA 4.5 106-19 : +0-04 FNMA 5.0 107-31 : +0-05 GNMA 3.5 105-00 : +0-06 GNMA 4.0 107-22 : +0-06 GNMA 4.5 109-05 : +0-07 GNMA 5.0 110-31 : +0-10 FHLMC 3.5 103-06 : +0-06 FHLMC 4.0 104-29 : +0-02 FHLMC 4.5 106-04 : +0-04 FHLMC 5.0 107-22 : +0-04 Pricing as of 4:04 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 2:09PM : ALERT: MBS Stable Into Afternoon. Positive Reprice Potential Increasing As we said earlier in the day, lenders are normally more conservative with positive reprices around the MBS Settlement cycle, not to mention the same is also true for Friday afternoons. So all we can really say is that the shape of...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Bernanke Speaks to Home Builders on Housing's Role in Recovery	2/10/2012 2:12 PM
Posted To: MND NewsWire Federal Reserve Bank Chairman Ben S. Bernanke , speaking to the National Association of Home Builders, said that the typical post-recession behavior of the housing market , resurging to help fuel reemployment and rising incomes, has not played out this time and housing remains a key impediment to a recovery. The chairman reviewed the current state of the housing market, telling the builders of a major imbalance between supply and demand with 1-2/4 million homes currently unoccupied and for sale and 2 million more in the foreclosure process. At the same time, factors are constraining demand such as a decline in household formation, high unemployment and uncertain job prospects, and wariness about home ownership as an investment. The availability of credit is another constraint. This imbalance...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage Rates Battle Back From The Edge	2/10/2012 1:59 PM
Posted To: Mortgage Rate Watch With yesterday's increases, Mortgages Rates moved to the edge of their recently long and stable stay at a 3.875% Best-Execution level. While some lenders are still best-priced at 4.0%, the average Best-Execution rate moved back down into 3.875% territory today. Keep in mind that "best-execution" refers to the most ideal possible rate/fee scenario and we track this because it's the most consistent way to benchmark the movement of the broader collection of lender rate offerings. (We explain even more about Best-Execution calculations in THIS POST ). The same thing that has been moving markets and mortgage rates around all week, is once again behind today's general bounce back. Early this morning, one of the leaders of a political party in Greece said that his party could not back the bailout...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Hidden Mortgage Tax and it's Effect on Loan Pricing	2/10/2012 1:21 PM
Posted To: Secondary Markets The latest hot issue in the mortgage markets has been the 10 basis point addition to G-fees mandated by the payroll tax cut passed late last year. Unfortunately, the media has only recently picked up on the fact that this “tax cut” was financed by a hidden tax on mortgages. However, since neither Congress nor the President know much about mortgages, details on how this tax would be imposed were not included in the bill. The legislation did not state, for example, whether the 10 basis point g-fee surcharge was considered part of the guaranty fee or a separate add-on to the loan’s rate. Read: Tax Cut Extension Now Officially Raising Mortgage Rates This ambiguity created a number of issues for lenders. Most servicing contracts specify that the total amount of interest either bought up or down with the GSEs cannot exceed a fixed sum, i.e., 37.5 basis points (which is fairly standard language). If the total g-fee (including the surcharge) is increased by 10 basis points, the amount of excess servicing that can be “bought up” is thus reduced by the same 10 bps. While buy-ups used to be relatively rare (since Freddie and Fannie both assign putrid multiples to the cash flow), the lack of ready buyers for servicing means that another avenue for selling excess servicing has been rendered uneconomical. The additional fee also has played havoc with loan pricing. As I understand it, the GSEs’g-fee buy-down multiple (i.e., what they will charge to convert the g-fee into a single payment paid when the loan is pooled) is around 6x. This means that the 10 bp surcharge is worth around 60 basis points in price (or 0.6% of a loan’s face value). The uncertainty surrounding the surcharge also threatened to disrupt pooling practices. To this point, there has been no guidance on whether the entire g-fee (including the surcharge) actually can be bought down. If it couldn’t, that would mean that 30-year 3.75% loans could not be securitized into agency 3.5% pools, the lowest coupon with good liquidity and well-behaved pricing. If these loans can only be pooled into Fannie or Gold 3s, this could severely disrupt both the MBS market and loan pricing. (As I discuss later, heavy originator selling will in turn increase the points required for lenders to offer these loans—or, more simply, make it more expensive for borrowers to obtain low rates.) I’ve been told that both Freddie and Fannie will have a call today (Friday, 2/10) to clarify the treatment of the surcharge. As I understand it, the surcharge will be treated as part of the g-fee, meaning that it can be bought down entirely. This will allow 3.75% loans to be pooled in 3.5% pools; while it will be relatively expensive to buy down the entire g-fee, it does give lenders the option of either pooling down (into 3s) and holding/selling the servicing, or pooling into 3.5s by buying down the g-fee. This in turn raises the interesting and important issue of how the lower coupons are trading. There is decent liquidity in 15yr 2.5s, with average monthly issuance of 585mm over the last three months. However, the market for 30-year conventional 3s remains relatively illiquid, although production seems to be ramping up; according to Fannie Mae, roughly 230mm 3% pools have been created thus far in February. While the overall price performance of Fannie 3s is better than it has been in the past (when prices could move up or down by a half-point or more on minimal volume), the dollar rolls remain pretty volatile. A decent origination day will push prices in the back months (April and May) sharply lower, while front months (February and March) remain roughly in line with other coupons, duration-adjusted. This week, for example, saw the March/April roll (i.e., the price difference between March and April) for Fannie 3s as wide as 30/32s (equal to a financing rate of -7%); the roll is now 21/64s (for a more moderate -0.71%). There is a complex interactive relationship between a security’s price performance and issuance. A coupon won’t perform well if its outstanding balance remains small; a small tradeable “float” means that prices can get pushed around on very limited volume. However, no originators will issue pools for securities with erratic performance. The biggest factor inhibiting the growth of the market for 30-year 3s is the belief that there is no natural clientele for the security. Its coupon is too low, and its duration too long, for banks and depositories; insurance companies and pension funds that would buy their long average lives and durations need higher returns on their portfolios. In my mind, the only natural holder is the government (or, more to the point, the Fed). A program to purchase 30-year 3s (and 15-year 2.5s, to a lesser extent) would be the most direct way for the government to positively influence the mortgage markets. ...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS MID-DAY: 2/10/2012	2/10/2012 10:22 AM
Posted To: MBS Commentary MBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-17 : +0-07 FNMA 4.0 105-10 : +0-04 FNMA 4.5 106-19 : +0-04 FNMA 5.0 107-29 : +0-03 GNMA 3.5 105-02 : +0-08 GNMA 4.0 107-23 : +0-07 GNMA 4.5 109-04 : +0-06 GNMA 5.0 110-28 : +0-06 FHLMC 3.5 103-08 : +0-08 FHLMC 4.0 104-30 : +0-03 FHLMC 4.5 106-03 : +0-03 FHLMC 5.0 107-19 : +0-01 Pricing as of 11:03 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 10:35AM : ALERT: Bond Markets Doing Their Best To Hold Overnight Gains Things have been fairly calm so far this morning, especially considering the raft of overnight and early morning headlines indicating that one of Greece's political party leaders will not vote to approve the bailout package. 10yr yields...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Settlements Actually Mean Anything? FinCen's Impact on Non-bank Mortgage Lenders	2/10/2012 8:31 AM
Posted To: Pipeline Press "Fat, drunk & stupid is no way to go through life son." One probably doesn't hear that admonishment much in the halls of the Financial Crimes Enforcement Network (FinCEN), which finalized regulations that require non-bank residential mortgage lenders and originators to establish anti-money laundering (AML) programs and file suspicious activity reports (SARs) , as FinCEN requires of other types of financial institutions. Law firm Ballard Spahr was quick to set up a free webinar for its attorneys to explain the new requirements and discuss the steps non-bank residential mortgage lenders and originators must take now to comply with the new requirements. Mortgage banks, who now have this new regulatory worry on their plate, may want to have someone sit in next Thursday (2/16) from 12-1 EST...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.