Category Archives for "Mortgage Industry News"

“Analyzing Weekly Shifts in Mortgage Application Volume: A February 2022 Overview”

For the week ending on February 23, there was a noted drop in mortgage activity, marking the third week in a row of this trend. This has been confirmed by the Mortgage Bankers Association (MBA) whose Market Composite Index, used to track mortgage loan application volume, reported a 5.6 percent decrease on a seasonally-adjusted basis from the previous week; a 3.0 percent decrease before adjustment. The Refinance Index fell 7.0 percent compared to the week before and was also 1.0 percent lower than the same period last year. The volume of mortgage activity for refinancing shrank to 31.2 percent from 32.6 percent the week prior. The Purchase Index dropped by 5.0 percent on a seasonally-adjusted basis and 1.0 percent unadjusted. The volume was 12.0 percent less compared to the same week in the previous year. The Chief Economist at MBA, Mike Fratantoni, announced the slight decrease of the 30-year conforming rate to 7.04 percent, which is still approximately a quarter-percent higher than the rate at the start of the year. This rise in rates in the past few weeks has slowed down activity, particularly for those looking to refinance FHA and VA. However, applications for new homes have increased 19 percent, a glaring contrast to the 12 percent lag in purchasing existing homes when compared to last year. The evident disparity underlines the absence of existing inventory as the main obstacle to increase in purchase volume, yet mortgage rates exceeding 7 percent are also inimical to this growth.

Continue reading

“Unpacking the Complex Current State of the Mortgage Market: Analysis and Insights of February 2024”

After a period of stagnant economic information, crucial updates were released regarding Durable Goods, which is the first significant series of data since last week. The bond market displayed mixed reactions, with most standard factors appearing beneficial. An unexpected upset came from the core capital goods shipments’ result, which suggested a negative impact on Q1 GDP for bonds. Despite the initial minor gain, this data reversed any potential progress.

In the grand scheme, all these minor fluctuations may seem irrelevant as bonds consistently await significant information that can cause substantial changes. A somewhat lackluster change was also observed around the 7yr Treasury auction, but the total value remained below the standard technical cap of 4.32%.

Several economic data and events were presented:

Durable Goods

– A decrease of 6.1 against a forecasted decrease of 4.5, previously -0.3

Durables excluding Defense and Aircraft

– Remained steady at 0.1, same as the forecast, previously -0.6

Consumer Confidence

– Dropped to 106.7 against 115 as expected, previously 110.9

Yearly Home Prices Reports

– FHFA report dropped slightly to 6.6, previously 6.7
– Case Shiller report increased a bit to 6.1 against a forecast of 6.0, previously 5.4

Market movements were sporadic:

12:16 PM – Showed minor strength initially, weakening following the morning economic data. 10-year yield rose by 1.6bps to 4.299. MBS decreased by 2 ticks (.06).

01:46 PM – Initial improvement after a satisfactory 7-year auction, which was later lost. 10-year yield rose to 4.295 by 1.2bps. MBS decreased by 2 ticks (.06).

02:30 PM – The day’s weakest levels showing MBS down by 5 ticks (.16) and 10-year yield rising 2.5 bps to 4.307.

04:00 PM – As additional selling took place just before 3 pm, it finally came off from the weakened stages, showing MBS down by an eighth. The 10-year yield increased further by 2.8bps to 4.311, peaking at 4.321 for a brief period.

Continue reading

“Understanding Surprising Changes in Today’s Mortgage Rates: A Comprehensive Analysis”

The recent surge in rates, having reached near-peaks of several months, implies that any slight increase can set new records. This was almost the case today, with lenders marginally increasing rates compared to the previous day. Although the average loan seeker may not discern a considerable shift in loan quotations in the last 24 hours, it was adequate to drive 30-year fixed rates close to the maximums last noted in November 2023.

There were no discernible triggers for this fluctuation, which is not particularly unusual given the volatility typically observed on any given day in the past fortnight. The benchmark for a prime, conventional 30-year fixed plan now lies solidly within the 7% range for a typical lender. While this is still a significant drop from the heights reached in October, it marks a noticeable spike from the closing rates of 2023 when lenders hovered around the 6.625% mark.

Even though substantial economic data that could potentially influence rates will not be available until next week, there are still some lesser contributing factors expected over the coming days. Depending on how much they deviate from projections, these upcoming economic reports could induce more extensive variations than what has been observed over the past couple of weeks.

Continue reading

“Exploring Current Trends and Strategies in the Mortgage Industry: A Comprehensive Analysis”

In a revision to yesterday’s commentary, the upcoming Memorial Day holiday is actually three months away, not two as previously stated, according to a few communication exchanges. During the TMBA Secondary Conference in Texas, a prominent issue debated was the paradox of refusing athletes to bet on games they participate in, while Congress members are free to invest in the companies they regulate. Another key theme was the intelligent application of technology, exemplified by today’s discussion on Mortgages With Millennials. Further discussions included the need for improved mortgage regulations rather than additional ones, the misplaced focus of many politicians on their reelection rather than positive change, and the future implication of Ginnie Mae, Fannie Mae, and Freddie Mac. There was also insight offered by this week’s podcast, sponsored by nCino, creators of the modern nCino Mortgage Suite, encompassing three major products. The podcast guest was Peter Idziak from Polunsky Beitel Green, discussing a proposed rule from the U.S. Treasury Department insisting on transparency from real estate professionals about anonymous LLCs involved in closures and settlements. Lastly, regarding Lender and Broker Services, Products, and Software, the importance of a loan origination system (LOS) in promoting efficiency and meeting borrower needs was emphasised. Planning for operational wellness now can significantly benefit potential success. Advantages of a good LOS and how Encompass® can optimize these elements were some of the key takeaways from a recently published blog.

Continue reading

“Exploring the Market Trends: A Comprehensive Recap of Mortgage Backed Securities for February-2024”

The bond market has breathed a collective sigh of relief after the conclusion of the 5-year Treasury auction. While the auction did contribute to a mild sense of weakness, it was mainly responsible for the uptick seen earlier in the day. This perception is backed by the afternoon outperformance of the Treasury over the MBS, following their earlier underperformance. In spite of the fluctuation experienced throughout the day, none of the broader range borders were endangered, and there were no noteworthy aftereffects on bond market momentum. “Majorly steady post-CPI and awaiting the next large data input” accurately summarizes the state of affairs from the past two weeks.

Details of Market Movement:

At 9:48 AM, there was initial strength overnight, slightly declining into the local hours. The MBS was still up 1 tick (.03), and the 10-year was up 1.4bps at 4.262.

By 10:49 AM, there was some selling leading into the 10 am hour. The MBS reduced 2 ticks (.06), and the 10-year rose 3.2bps to 4.28.

At 1:06 PM, there was a minor increase in weakness both pre and post the 5-year Treasury auction. The 10-year surged 5.5bps to 4.303, while the MBS dropped 5 ticks (.16).

By 3:48 PM, the market had started recuperating after the conclusion of the auction. MBS was still down 5 ticks, having been down almost a quarter point a little while back. The 10-year was up by only 3.3bps at 4.281.

Continue reading

“Decoding the Latest Mortgage Rates: Analysis and Predictions for 2024”

At the start of the new week, mortgage rates saw a moderate rise, continuing to stay just beneath the high levels witnessed the previous Thursday. A good number of lenders initiated the day with rates almost the same but were compelled to implement increases during the day due to prevailing frailty in the bond market. The bond market directly influences mortgage rates’ daily fluctuations. When bonds show enough change within a day, lenders are obligated to respond, despite their inclination to establish rates once daily for functional purposes. The changes over the weekend, as well as those during the day, were not substantial in the broader scope. The main focus is on the significant economic data due in the forthcoming weeks, which hold the potential for the most substantial effect on rates. While some data from this week could potentially influence rates, data from the following week poses a considerably larger risk (or opportunity).

Continue reading

“Exploring the Dynamics of Mortgage-Backed Securities Market: A Detailed Review”

The forthcoming Treasury auction cycle might not be the most influential market determinant of the week, but it’s certainly a contender. Unlike the usual Tuesday to Thursday structure, this cycle is streamlined into the first two days of the week due to calendar-specific reasons. The Treasury hopes this arrangement simplifies investor involvement, tying the auctions neatly into their February fiscal diaries. Preliminary market activity seems to validate the role of the auction cycle due to a slight underperformance relative to MBS, a trend routinely spotted prior to an auction cycle.

The cycle also serves as a trial of sorts for the shorter end of the yield curve, which shows symptoms of nearing technical threshold breaks more than the longer end. For instance, 2-year yields are just 2bps shy of their two-month high, whereas 10-year yields have a safety margin of at least 6bps.

Continue reading

“Analyzing the Future of Mortgage: Low Rates, New Policies and Technological Advancements”

Celebrated musician George Thorogood recently marked his 74th birthday, a man famed for penning a memorable narrative regarding rent, landlord-tenant interactions, and delay of payment. While time tends to move quickly, this week presents a unique change as there’s a full five-day working week ahead with no Federal holiday looming until May 27th, Memorial Day. This seems a bit daunting, given that it’s still two months away. Nevertheless, participants at the TMBA’s Southern Secondary Conference held in Houston are taking advantage of the time at their disposal. The discussions revolve around topics like superior execution techniques, warehouse strategies, leadership strategies, economic patterns, the market’s attitude towards servicing, and ways to enhance operational efficiency. As someone deeply entrenched in the world of capital markets, my mathematical skills are fairly solid, though I admit the calculations involved here seem a bit complex! Among the favorite topics at the conference is the comparison between MBS and cash sales pickups, notwithstanding the fact that last year saw a surge of excessive servicing transactions. There is also a keen interest in the purchasing of home equity lines of credit (HELOCs) and second mortgages in both bulk and piece by piece. Furthermore, some attendees are also looking into the effects of climate change and the incremental hike in insurance costs. Additionally, this week’s podcast, which is sponsored by nCino, manufacturers of the nCino Mortgage Suite, features an intriguing interview with Matt Lucido from Yardsworth. The discussion revolves around innovative methods homeowners could utilize to leverage their available equity, and potential ways to bring more supply to the market. Finally, the conference also focuses on matters related to lender and broker services, products, and software.

Continue reading

“Unpacking the Latest Trends in Mortgage Rates: An Insightful Overview for February 23, 2024”

A stagnant rate market has its advantages, as demonstrated this week when a modest uptick effectively balanced out several days of losses. Without any significant or intriguing causes, the day saw a favorable turn, starting with lenders offering rates that were already near the week’s peak. Throughout the day, the improving bond market enabled lenders to revise their rate proposals. As a result, our daily average, factoring in these adjustments, comfortably reached the week’s highest rates. More economic data expected next week might lead to a slight increase in instability. The most pertinent data, which carries the highest potential for fluctuation for better or worse, will not be available until the first week of March.

Continue reading

“Decoding the Dip in Treasury Yields: A Comprehensive Analysis of the February 2024 Mortgage Market Trends”

The week appeared prone to be predominantly dull, with little change (assuming “destiny” has any foretelling capacity). Perhaps it would be more equitable to suggest that a “dull and unchanged” outcome was anticipated due to the noticeably limited event schedule. The sheer volume of European policy discussions and data has affected the bonds significantly, predominantly impacting negatively on Wednesday, but showing signs of improvement today. Consequently, Treasuries have rebounded to the levels seen on Wednesday morning, setting the course for the week to conclude almost identical to the previous week.

Continue reading