Navigating the Latest Shifts in Mortgage Backed Securities: What Today’s Trends Mean for Borrowers

The momentum has been building, and the focus is shifting in the bond market. Over the past few years, inflation reports have been vying for attention alongside the jobs report. However, the market is now reverting to the traditional trend seen over the past decades, where the Employment Situation report holds paramount importance. This shift is being underscored by the Federal Reserve’s messages, indicating a more composed stance on inflation and a heightened emphasis on the labor market. As we anticipate Friday’s jobs report, other reports and events throughout the week also deserve attention. Today features a lighter schedule, with the highlight being a speech by Powell at 1:55 pm ET.

Navigating Market Volatility: Strategies for Mortgage Professionals in 2024

This week marks the highly anticipated Fat Bear Week, capturing the attention of nearly 600 mortgage professionals gathered in Las Vegas for the ACUMA event. Conversations are largely dominated by the excitement of Fat Bear Week and the challenges of navigating the sprawling city. However, a more pressing issue on the table is the intensifying storm activity, most recently highlighted by Hurricane Helene, which has tragically caused fatalities in five states. In response, Fairway Independent is committing $1 million towards the essential relief efforts. CEO Steve Jacobson has called on the major IMBs and wholesale lenders to match this contribution, emphasizing the industry’s duty to collectively support regions in need.

In other industry news, Candor has sponsored this week’s podcast, which you can find linked in today’s content. Candor’s sophisticated Expert System AI has flawlessly underwritten over 2 million mortgages, providing a warranty on every credit risk decision to alleviate repurchase concerns. Also featured is an interview with Andy Duane from Polunsky Beitel Green on potential changes to the Basel III capital requirements.

Shifting focus to loan programs and services, Longbridge Financial, LLC (NMLS #957935) introduces the Blueprint for Reverse Mortgage Success. This new initiative aims to help mortgage professionals tap into the reverse

Understanding the Latest Shift in Mortgage Rates: Insights and Implications

As the season progresses, there’s a notable trend of things being portrayed differently than they actually are. Lenders are discussing new loan limits, but no official changes have been made. Meanwhile, news reports claim that rates have dropped this week, but in reality, they’ve risen. Additionally, rumors of a major refinancing surge are circulating, but that isn’t accurate either.

Rates did indeed climb slightly higher, remaining near long-term lows. A chart tracking 10-year Treasury yields, which often serve as a benchmark for longer-term rates like mortgages, highlights the recent positive momentum and the mild correction following last week’s Fed rate cut. Mortgage rates appear even milder; one measure, Freddie Mac’s weekly survey, erroneously reported a drop in rates this week. Unfortunately, Freddie’s figures don’t match the current reality. Under normal circumstances, discrepancies like this can be reconciled using daily numbers from MND, but not this time. For a more in-depth analysis, it’s clear: Mortgage rates are definitely not lower this week.

Regarding loan limits and home prices, some lenders are prematurely advertising new conforming loan limits around or above $800k. However, the official conforming loan limits won’t be announced until the end of November. Hence, any current claims about these

Navigating Market Uncertainty: Today’s Insights on Mortgage Rates

A few months ago, major inflation reports had a significant impact on the bond market, comparable to the jobs report. As CPI and PCE inflation data have stabilized over the past five months, the focus has shifted toward the jobs report and other labor market indicators for influencing bonds and Federal Reserve decisions. However, inflation still plays a role until it becomes negligible, and we’re not there yet. Today’s inflation report was slightly better than expected, helping bonds to maintain their overnight gains.

Looking at the recent behavior of inflation data, it’s evident that the trend over the past several months has been showing signs of improvement. This trend becomes clear when examining the month-over-month data, rather than the annual charts, which still reflect last year’s higher inflation months.

The key takeaway remains consistent, even when considering unrounded figures.

Navigating Mortgage Rates Amid Financial Market Turbulence: Insights and Strategies

Moses can be considered the first to use technology; he carried two tablets that were connected to the cloud. However, technology is a double-edged sword. While having everything on your phone is convenient, it can quickly become problematic if you lose your device or it gets confiscated. It’s generally advised not to voluntarily hand your phone to the police. The rise of technology has boosted the popularity of Zoom and Team calls, though many still prefer in-person events and workshops. For instance, STRATMOR is hosting a well-attended Consumer Direct Workshop focused on the CD channel in Dallas this November.

Mortgage servicing companies have access to a wide array of technological tools. The granularity of current data allows more entities than ever to identify which loans and borrowers are candidates for refinancing. Those holding the servicing rights are in the best position to analyze this data and reach out to borrowers, although loan officers maintain personal relationships with clients.

Today’s podcast, sponsored by Silk Title Co., discusses technology in the lending industry. Silk Title Co. supports centralized, tech-driven, and process-oriented operations, emphasizing borrower experience, standardization, and collaboration. An interview with CNET Money’s Katherine Watt reveals that 40 percent of U.S. adults are pessimistic about mortgage rates becoming

Interest Rate Volatility Causes Market Turbulence: Insights from September 26, 2024

Currently, the bond market is still grappling with its trajectory following last week’s Federal Reserve announcement. Early-week trading on Monday and Tuesday experienced significant morning volatility that gave way to calmer and more robust afternoons, sparking optimism that the market’s reaction to the Fed’s moves had stabilized. However, Wednesday brought overnight losses that extended throughout the day, indicating the market’s adjustment phase might not yet be finished. Thursday displayed a mixture of trends, including gains overnight, morning losses, and a commendable afternoon rebound. A key factor influencing these movements has been the continuous impact of relevant economic data.

Economic Data and Events:

– **Jobless Claims**: Reported at 218k, compared to the forecast of 225k and a previous count of 219k.
– **Durable Goods Orders**: Recorded at 0.0, significantly better than the expected -2.6 but down from the previous 9.8.
– **Core Durable Goods**: Registered at 0.2, beating the forecast of 0.0 and improving from the previous -0.2.
– **GDP (Q2, revision)**: Remained steady at 3.0, consistent with the previous estimate.

Market Movement Recap:

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Navigating Rising Mortgage Rates: What You Need to Know Today

We created the industry’s first daily mortgage rate index based on actual lender rate sheets, without subjective distortions. In comparison, the longest-standing mortgage rate index in the U.S. is a weekly survey that often includes subjective distortions and quirky methodology. As a result, we frequently find ourselves clarifying the actual state of mortgage rates, especially on Thursday afternoons when the weekly survey is published. In almost every instance we recall, there have been quantifiable explanations for periodic discrepancies. However, today stands out as a notable example where Freddie Mac’s weekly survey data appears completely off base. Freddie reported a decrease in rates for the week— which, according to their methodology, covers the five days from Thursday to the following Wednesday. This means the average rate from September 19th to 25th was supposedly lower than from September 12th to 18th. The issue is that rates were clearly and quantifiably higher during that period, even if only slightly. Typically, when we apply Freddie’s method to our own daily rate tracking, we can at least rationalize any directional differences. What matters most for mortgage rate indices is the change in rates, not the absolute levels.

Navigating Market Movements: Key Insights from the Latest MBS Report

Discussing a potential stabilization of the post-Fed market correction carries some risk, but recent activity in the overnight session suggests the correction may have finally settled. Rather than focusing solely on the absolute gains in longer-term yields, the more persuasive evidence lies in the yield curve’s behavior over the past two days. During this period, the yield curve hit a peak and remained consistently flat for the most extended timeframe since the Fed meeting.

Although there was an improvement in yields, it was soon overshadowed by stronger economic data released at 8:30am.

It’s crucial to avoid concluding that movements in the yield curve will dictate a specific direction for long-term rates. The curve has the potential to widen or rise even as rates decrease, a pattern observed frequently in recent months. Regardless, it would be least surprising if the trend depicted in the subsequent chart continues to show widening.

Key Factors Influencing Mortgage Rates in 2024: Industry Insights and Predictions

The ongoing news around Hurricane Helene has captured our attention, especially concerning its effects on lives and the housing market. As Will Rogers once hinted about gaining knowledge through news reports, I find myself relying heavily on industry predictions. iEmergent, a forecasting and advisory firm specializing in financial services, mortgage, and real estate, has just adjusted its 2024–2026 U.S. Mortgage Origination Forecast downward. They attribute this revision to current economic trends, resulting in a less optimistic outlook for the purchase mortgage market over the next two years. Conversely, refinance volumes are expected to increase as mortgage interest rates gradually decline.

On a related note, a contact deeply involved in mergers and acquisitions warned that lenders without servicing portfolios and with shrinking cash reserves may resort to drastic rate cuts, leading to significant financial losses and possible closures unless they opt to sell.

This week’s podcast, sponsored by Silk Title Co., features an insightful conversation with Silk Title’s Marc Trachtenberg. The discussion covers various aspects of the title process, exploring potential improvements in origination and the qualities that define an effective title process.

Market Recalibration: Understanding the Impacts on Mortgage Rates in Late September 2024

Is It Time to Be Concerned About Bond Market Losses?

Since the recent Fed update, the bond market has predominantly trended in a single, rather undesirable direction, despite the necessity of such movements to maintain market stability. While the post-Fed adjustment seems essential, its implications for the future remain questionable. In essence, the answer is no. The forthcoming significant shifts in interest rates are still largely dependent on economic data. This current market adjustment appears to be a minor and temporary deviation, even if it persists for another week at its current rate.

Economic Data / Events

New Home Sales: 716k (forecast: 700k, previous: 751k)
5-year Treasury Auction: Aligned with expectations

Market Movement Recap

09:39 AM: Moderate overnight losses, primarily in Europe. MBS down 0.125 points, 10-year Treasury yield up 3.7 bps to 3.766%
10:32 AM: Further declines after early recovery attempts. MBS down 0.19 points, 10-year yield up 4.7 bps to 3.776%
01:21 PM: Slight dip following the 5-year auction. 10-year yield up 5.