How much will my mortgage be

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Mortgage News Daily

5/22/2018 1:52:59 PM

Posted To: MBS Commentary

For the 2nd straight day , trading levels in bond markets held inside a narrow range--far narrower than that seen on any given day last week, let alone the entire week. This could be incidental or it could be in anticipation of some future event. The leading candidates as far as future events would be tomorrow's release of the Fed Minutes at 2pm as well as the first serious Treasury auction of the week (5yr Notes at 1pm). Given that the bigger of the two events hits an hour later, that's where we'd be looking for intraday risk-- at least it would be if we were in a more normal environment. As it stands, the bond market is exceptionally well availed of the Fed's plans and it's unlikely that new information is going to be gleaned from this or any near-term release. The only...(read more)

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5/22/2018 12:09:00 PM

Posted To: Mortgage Rate Watch

After quite a bit of volatility and a move up to 7-year highs last week, mortgage rates have managed to avoid any semblance of drama so far this week. In fact, each of the past 2 days has seen the average lender keep 30yr fixed rates perfectly in-line with Friday's latest levels. The worst that could be said of these rates is that they're very close to last week's highs. The second worst thing that could be said of these rates is that they're the latest in a series of gradual moves higher over the past few years. The general expectation is that rates can continue to move higher as long as the economy continues to tolerate higher borrowing costs. Mortgage lenders know that we are now in a rising rate environment. That means they're less likely to offer huge improvements on rate sheets unless...(read more)

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5/22/2018 9:18:59 AM

Posted To: MND NewsWire

As if the new home inventory wasn't tight enough, the National Association of Home Builders (NAHB) say a higher proportion of those homes are being built as rentals rather than owner occupancy . Robert Dietz, writing in NAHB's Eye on Housing blog says the numbers are small, but the increase has continued for several recent quarters. From the first quarter of 2017 through the first three months of 2018, construction starts for homes built specifically as rental property rose from 33,000 to 37,000. Seven thousand of those starts were in the first quarter of this year. According to Census Bureau estimates, the market share of single-family homes built to be rented (and not including those built and sold to someone who then rents them out) accounted, on a one-year moving average basis, for 4.3...(read more)

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5/22/2018 7:19:28 AM

Posted To: MND NewsWire

It only impacts auto lending, but if Mick Mulvaney, acting director of the Consumer Financial Protection Agency (CFPB) keeps his word, a Congressional resolution signed by the President on Monday is likely to have an eventual impact on mortgage and other lending as well. The Joint Resolution, S.J. Res. 57, sponsored by Senator Jerry Moral (R-KS) and Rep Lee Zeldin (R-N.Y.) used the Congressional Review Act (CRA) to formally disapprove a rule from CFPB relating to "Indirect Auto Lending and Compliance with the Equal Credit Opportunity Act"(ECOA). This causes that rule to "have no force or effect." Some background, and because today there always seem to be two various of facts, we summarize the story from both perspectives, that of the National Auto Dealers Association (NADA) and of The Leadership...(read more)

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5/22/2018 6:21:40 AM

Posted To: MBS Commentary

Today begins the 3rd day where US Treasuries aren't imploding after hitting 7 year highs last Thursday. At this point, we might consider the resilience to be some sort of fledgling bounce attempt, even though we can continue to be concerned about technical floors (discussed here ). But let's say that 3.06% is convincingly broken today and confirmed tomorrow. Then what? If that happens, I will be looking squarely at the Italian political drama and European bond markets. What follows is a bit of an outline for a more robust primer on the topic of European bond markets as they interact with US bond markets. Does rate volatility in Europe really affect US rates? There can be no greater proof of this than the summer of 2012, when the EU debt crisis was at its apex. There's no way we...(read more)

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5/22/2018 6:10:47 AM

Posted To: Pipeline Press

The U.S. mortgage industry likely recorded an operating loss in the first three months of 2018 due to falling loan volumes and growing expenses, the Mortgage Bankers Association’s chief economist, Michael Fratantoni, said yesterday here in New York. On a personal note, I know many owners and CEOs of residential lenders, however, and would never bet against their success. They represent a very savvy, entrepreneurial, and street-smart group of individuals but are faced with many risks, with LO comp, technology, housing inventory, and shrinking margins in the forefront. Check out The Plight of the Small Independent Lender . Company News Saturday this commentary mentioned that bitcoins were not suitable for a down payment in Fannie’s guidelines. David T. showed me that there are state...(read more)

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5/21/2018 1:56:51 PM

Posted To: MBS Commentary

There were no significant economic reports or events today, and only a few newsworthy developments. The biggest of these also happened the earliest (yesterday night, in fact) when the White House announced the suspension of certain tariffs on China. Stock futures liked the news (after all, the threat of a trade war has been a big deal), but bonds didn't react much. As the overnight session progressed, a familiar trade took shape in European bond markets with core yields continuing to rally. Whereas that had been helpful for US bond markets on Friday, they were less responsive today. Both before and after the European rally, US yields approached and bounced at the 3.06% technical level (to be fair, it's more like 3.055%). This is right were bonds ran into resistance on Friday afternoon...(read more)

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5/21/2018 12:38:00 PM

Posted To: Mortgage Rate Watch

Mortgage rates held steady today, which is better than what could be said for most of last week when rates shot up to the highest levels in 7 years. Friday was the only day of improvement, but it was scarcely enough to undo the damage from the previous 4 days. That said, it did raise questions. Specifically, was Friday some sort of indication that the worst was behind us in terms if upward rate momentum? Answering that question is tricky business because the time frame matters greatly. In the short term, there's always a possibility that a prevailing trend toward higher rates will cool-off and reverse course. While that's also technically possible over longer time horizons, we can begin to talk more about probabilities and less about random chance. With that in mind, we've be discussing the...(read more)

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5/21/2018 12:07:24 PM

Posted To: MND NewsWire

In a prior article we summarized the options the Trump Administration might utilize to reform the residential mortgage financing system should Congress continue to drop the ball. Two noted economists, Jim Parrott and Mark Zandi, writing for the Urban Institute, address the notion of shrinking Fannie Mae and Freddie Mac's (the GSEs) footprints and eliminating their cross-subsidy of higher risk borrowers. This article summarizes their alternatives for ending the 10-year government conservatorship of the two companies. The director appointed to replace Melvin Watt when his term as director of the Federal Housing Finance Administration (FHFA) expires next year will undoubtedly reflect the attitudes of the Administration including their claimed commitment to changing the GSEs' status. The authors...(read more)

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5/21/2018 8:10:55 AM

Posted To: MND NewsWire

Late last year Fannie Mae included questions in one of its National Housing Surveys about working in the "gig" economy. About a fifth of respondents claimed they earned at least some of their income through such employment. Gig-economy workers tend to have flexible work arrangements, working on single projects or tasks preforming on-demand services such as transportation (Uber, Lyft) lodging rental (Airbnb and VRBO) food/goods delivery, and personal tasks (TaskRabbit). Because of its "on-demand" nature, the income stream from gigging can be less stable and its source less reliable . With the numbers involved increasing, this is likely to become an issue in mortgage lending, so Fannie Mae's Economic and Strategic Research (ESR) group included some self-employment and gig-economy related questions...(read more)

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5/21/2018 7:36:00 AM

Posted To: MND NewsWire

Last week the National Association of Home Builders (NAHB) reported that severe shortages of construction tradespeople were slowing homebuilding and increasing costs. The shortages, as reported by NAHB's new home builder members, affected all trades from rough carpenters to plumbers and masons. Now, from Australia, comes news that brick masons at least may not have as much job security as that NAHB report would suggest. The Hadrian X, developed by Perth-based Fastbrick Robotics, can lay more than 1,000 bricks an hour and, in tests, has framed a small home in two days. Hadrian, essentially a long robotic arm that can be mounted on a track, crane, or barge, uses a 3-D model of the house, cuts its own bricks, applies adhesive, then conveys them to the arm which puts them in place. The plumbing...(read more)

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5/21/2018 6:54:05 AM

Posted To: MBS Commentary

Much like last week , this week's event calendar is limited in terms of top tier data and events, but nonetheless carries the potential for technical momentum. The underlying reasons are a bit different , however. Last week, the risk was that rates had been super flat and narrow for 2+ weeks. The longer and narrower those sideways streaks become, the more likely a breakout becomes (obviously), and those breakouts tend to have more momentum than normal. This week's set-up is somewhat similar to the highs in rates seen at the end of April. In both cases, we'd just spiked to the highest rates seen in a long time and then saw one really solid day of improvement. In the late-April case, it was that day of improvement that preceded the sideways drift. In this week's case, today would...(read more)

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5/21/2018 6:12:45 AM

Posted To: Pipeline Press

Hello from the MBA Secondary Conference in NY! Lenders are talking about LO comp (“they need to share the margin pain, but no one wants to be the first to outright cut it”) and Amazon…but anyone afraid of Amazon creating a mortgage company should learn a little something about it. For example, Amazon is relentless regarding the customer experience, even if it cuts into short-term results. Every employee, including CEO Jeff Bezos, spends at least two days a year working in the call center or sales department. This ensures a companywide understanding of customer satisfaction and it might be an interesting idea for bankers to consider. How much time does a lender’s CEO spend on the phone with borrowers, processing, or servicing loans? Lender Products Join this week’s...(read more)

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5/18/2018 1:43:51 PM

Posted To: MBS Commentary

Bonds rallied today for the first time all week, and fairly well at that! 10yr yields fell more than 5bps and Fannie 3.5 MBS rose nearly 3/8ths of a point. Not much to be mad about there, right? Indeed, there's nothing to be mad about , but there are all sorts of reasons to remain cautious. The rally was driven by a combination of European political drama and short-covering in US bond markets. Here's an external link that does a better job than I can of explaining the Eurodrama quickly. And here's a homegrown link the goes into greater detail on short-covering. The day's best gains were seen during the 2nd half of the European session (which effectively ends at noon ET), but short-covering kept the positive trend intact through the domestic close. To reiterate what I said earlier...(read more)

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5/18/2018 12:31:00 PM

Posted To: Mortgage Rate Watch

Mortgage rates caught some small semblance of a break today. If it's not apparent based on that assessment in conjunction with the headline, the improvements certainly left something to be desired, even though that's to be expected, given the circumstances. Here's what I mean by that: Rates are based on the bond market. Trading levels in the bond market are back in line with (or slightly better than) Tuesday's levels. But mortgage rates are still higher than those seen on Tuesday. It's really that simple. Why is it to be expected? Mortgage rates aren't created automatically based on the bond market. The bond market is merely the primary input. Lenders use bond prices/levels as a baseline for determining rates. If the market has been more volatile, lenders are quicker to raise rates and slower...(read more)

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5/18/2018 6:21:24 AM

Posted To: MBS Commentary

The notion of "positions" is extremely important to the bond market (and to any market for that matter). At the most basic level, a LONG position seeks to profit from prices rising (or yields falling) and a SHORT position seeks to profit from prices falling (or yields rising). Quite often, the structure of accumulated positions in the Treasury market acts as its own driver of momentum . The key reason for this is the very logical practice of traders protecting themselves from undue losses with automatic trades unsurprisingly known as "stop losses" or simply "stops." For instance, if the market is overly long, and if a big chunk of longs were set-up around a specific trading level, if yields happen to move higher than that trading level (or something close to it...(read more)

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5/18/2018 6:18:19 AM

Posted To: Pipeline Press

Folks heading to the MBA’s Secondary conference should know that there are 329 street-level newsstands in New York City. (The peak was 1,500 in the 1950s.) By law, the maximum price for anything at a newsstand is $10, meaning that newspapers are a significant part of that business. Finance & news about it make the world go ‘round, and thanks to Steve A. for passing along a new essay where Pope Francis calls for intensified regulation of the "sophisticated technologies" of financial markets. Private Mortgage Insurance News “The Community Home Lenders Association (CHLA) writes to ask FHFA to investigate the pricing practices of private mortgage insurers (PMIs) with respect to use of volume discounts and other proxies for this in the offering of mortgage insurance for Fannie...(read more)

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5/18/2018 6:09:19 AM

Posted To: MND NewsWire

In the face of continuing inventory shortages, declining consumer sentiment in favor of buying a home, and concern about the homeownership impacts of the 2017 tax cut bill, the National Association of Realtors® (NAR) has revised down, albeit only slightly, its forecast for home sales this year. Chief Economist Lawrence Yun told Realtors attending NAR's Legislative Meetings & Trade Expo that, after accelerating 3.8 percent in 2016, existing home sales rose only 1.1 percent to 5.5 million in 2017. He forecasts they will finish this year around 5.6 million, a gain of 1.8 percent. In his initial 2018 forecast last November Yun said he expected sales to increase by 3.7 percent to 5.67 million units. Looking further into the future, he sees 2019 sales totaling 5.7 million existing homes....(read more)

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5/17/2018 2:40:13 PM

Posted To: MBS Commentary

Today was the calmest of the past 3 days of craziness, although the higher-than-average volume suggests things are still happening behind the scenes. Specifically , that volume can be largely attributed to traders cashing in previous bets on higher rates. This is accomplished by buying bonds (to close out a bond transaction that was previously "sold short"). In other words, there was less selling and/or more buying today compared to other days because many of the sellers were cleaning up their positions. The net effect wasn't very beneficial as yields still managed to end the day at new cycle highs (3.115%). MBS did slightly better and managed to end the day unchanged. Economic data looked like it might have been interesting at first with Philly Fed coming in much higher than...(read more)

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5/17/2018 1:48:00 PM

Posted To: Mortgage Rate Watch

It's Thursday, which is when Freddie Mac's weekly Mortgage rate survey comes out. The survey is the most widely quoted source material for major media outlets. As such, headlines abound about the "highest mortgage rates in 7 years." Of course, we've already discussed these 7 year highs earlier in the week when they actually occurred. And I even pointed out that Freddie would almost certainly be following suit in yesterday's post . But enough about me. How about those rates?! Well, they're pretty high , but as far as individual days go, today saw the lowest amount of carnage compared to Tuesday and Wednesday. The bad news is that reality is a bit worse than Freddie Mac's weekly numbers. Instead of 4.625% (the nearest common mortgage rate to the Freddie survey), the most prevalent quote for top...(read more)

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5/17/2018 7:39:22 AM

Posted To: MBS Commentary

It's been pretty doomy and gloomy around here so far this week, what with the spike to the highest 10yr yields in nearly 7 years and what not. So how about an op-ed counterpoint to all the gloom? I'll go ahead and write it myself, since you have to have mild MPD to be an objective bond market commentator anyway. But in the interest of stay objective, I will bring in an opposing personality to write a quick counterpoint. Here goes: Bond Bullish Matt: Remember a few weeks (or maybe it was more than month?) ago when I talked about the 25 and 50 day moving averages? As you know, I don't much care for moving averages as timely indicators of bond market shifts (largely because they suck for those purposes... seriously, don't use them in a reprice risk forecasting routine). But I do...(read more)

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5/17/2018 6:45:26 AM

Posted To: Pipeline Press

I don’t go anywhere without my sugar glider, including most of this week spent in Austin, TX with TMS . No, a sugar glider is not a risqué pet name for a body part, it is pretty much a flying possum. Okay, I don’t have a flying possum, but starting July 1 American Airlines is banning sugar gliders from being allowed onboard as service animals, along with goats, birds of prey, and hedgehogs. What is the world coming to when airports aren’t zoos? Disaster Updates The other night I knocked it out of the park when I came up with this gem during Scrabble: Pneumonoultramicroscopicsilicovolcanoconiosis. It is the longest word in the English language (46 letters). It means the lung disease caused by inhaling volcanic ash. Okay, I didn’t come up with that one, but it is...(read more)

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5/17/2018 6:25:05 AM

Posted To: MND NewsWire

Two noted economists seem to be holding little hope that Congress will take up in any way changing the status quo of the government-sponsored enterprises (GSEs) before adjourning next January. However, they say it is an issue on the Trump Administration agenda and they expect the Executive Branch will step into the fray. In a paper published by the Urban Institute titled GSE Reform is Dead - Long Live GSE Reform , Jim Parrott and Mark Zandi ask, if Congress does fail to address GSE reform, what will the executive branch do with the opportunity? Parrot is a nonresident fellow at the Urban Institute. He owns Falling Creek Advisors, a financial institution consulting firm and previously served as White House senior advisor on the National Economic Council. Zandi is chief economist of Moody's Analytics...(read more)

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5/17/2018 6:06:43 AM

Posted To: MND NewsWire

The interest rates on loans that closed in April were the highest since Ellie Mae started tracking data in 2011. According to the company's Origination Insight Report for April, the 30-year fixed rate for loans averaged 4.79 percent, up from 4.69 percent in March. Not unrelated to that rapid rise is the increased domination of purchase loans. Their percentage share increased 4 percentage points to 66 percent in April as refinancing shrunk to a 34 percent share. The percentage of Adjustable Rate Mortgages also increased, claiming the highest share of total loans, 6.6 percent, since June 2014. The declining numbers of refinances affected all lenders. FHA refinances fell from 23 percent in March to 22 percent in April. Conventional refinances dropped from 43 percent to 38 percent, and VA refinances...(read more)

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5/16/2018 3:39:53 PM

Posted To: MBS Commentary

If you happened to be out of the office yesterday, 10yr yields finally broke out of their most recent consolidation pattern and moved quickly to the highest levels in just under 7 years. Big spikes can sometimes be isolated. That means today could have seen a decent move back in the other direction. For a few fleeting moments this morning, that possibility remained on the table, but by mid-morning, it was gone. Bonds taunted optimists one more time with a bounce right at yesterday's high yields. In other words, it looked like we had a chance to form a 2-day double top at 3.0945%. But the afternoon hours crushed that little dream with a linear move up to 3.1038% by the close. Specific motivations were in short supply. One of the only cogent arguments in the bond trading community was that...(read more)

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