Category Archives for "Mortgage Industry News"

“Exploring the Impact of Economic, Political, and Social Factors on the Mortgage Landscape: A Deep Dive”

The statehood of Florida dates back to 1845, followed by the unique use of kites during the American Civil War to relay letters, news, and periodicals. Fast forward to the current era, defined by the internet, and the recent MBA Florida Conference in Sarasota made waves with its latest proposal from the CFPB. This proposed regulation intends to omit medical bills from the majority of credit reports, bolstering the confidentiality of personal information, potentially boosting credit ratings and loan confirmations, limiting the power of debt collectors, and discouraging the sharing of medical debts among credit reporting agencies and lenders. It also endeavors to ensure that lending decisions remain unaffected by medical data. The mixed response to the proposal ranged from allegorical baseball references to concerns over the housing market and a sarcastic suggestion about excluding late payments or mortgage payments from credit reports. For more information and updates, keep following this space! (Check out this week’s podcasts sponsored by Richey May, a reputable expert in specialized advisory, audit, tax, cybersecurity, and more, including an enlightening interview with Zavvie’s Maya Velazquez discussing modern bridge solutions and perspectives on cash offers and buy-before-you-sell strategies). On a related note, mortgage initiation is in decline, with homeowners not keen on renouncing low-interest rates for new properties demanding over 6% interest. Consequently, lenders are improvising with unique loan products like ARMs, buydowns, and SCRA loans to attract borrowers. We recommend ICE’s latest blog post for an in-depth understanding of the appeal of these special loan products, as well as insights from the ICE Mortgage Technology Professional Services pros on adapting your team to these changes.

Continue reading

“Exploring the Intricacies of Market Reactions and Mortgage Trends: A Deep Dive into June 12, 2024’s Report”

Interpreting the CPI data can be challenging given the numerous line items it consists of, making it difficult to produce a flawless analysis. The persistently high “shelter” element, which hasn’t changed since last month, and the delayed reflection of recent metrics in the shelter category, are aspects worth noting, as indicated by a graphical representation by Ernie Tedeschi.

However, today’s CPI data brings uniqueness in regard to the commonly sought-after but seldom achieved “target rate” of 2.0% at the core level. Though 2.0% hasn’t been reached on a yearly basis, this month’s before-rounding rate was recorded at 0.163%, which gives us less than 2.0% if continued for a year. This is the lowest it has been since 2021 when it was still increasing.

As it currently stands, the yearly core inflation continues to decrease, yet it needs to reduce further before touching 2.0%.

The bond market responded rationally with a noticeable leap, marking the highest rates in recent months. The future direction of this rally, whether it continues or steadies, relies heavily on the Federal Reserve’s subsequent actions. A look at the rally in relation to Friday’s job report downfall gives some valuable insight.

If not for traders anticipating the Federal Reserve’s announcement, trading volume and movement might have exceeded what was observed post jobs report.

Continue reading

“Exploring the Fluctuations in Mortgage Application Volume: A Closer Look”

A notable rebound was observed in mortgage application activities last week after experiencing a slump during the holiday-shortened week beforehand. This change can be attributed to a temporary decrease in interest rates. Based on the data provided by the Mortgage Bankers Association (MBA), their Market Composite Index, which is used to gauge mortgage application volume, saw a seasonally adjusted rise of 15.6 percent and an unadjusted surge of 26.0 percent. Similarly, there was a significant 28.0 percent increase in the Refinance Index compared to its value in the previous week and it surpassed its level from the same week in the previous year by 28 percent. Consequently, the proportion of refinance applications went up to 35.2 percent from 31.1 percent the week before. Applications for home purchases also saw an uptick for the first time since May 3. The seasonally adjusted Purchase Index rose by 9.0 percent and even before adjustment, it was still 19.0 percent higher. However, it remains 12.0 percent lower than during the corresponding week in 2023. Mike Fratantoni, SVP and Chief Economist at MBA, mentioned that the mortgage rates showed a declining trend last week until they got a boost from a much stronger employment report than anticipated, leading the weekly average for the 30-year fixed mortgage rate to fall to 7.02 percent. The drop in rates early in the week resulted in a surge of refinance activities, especially by VA borrowers, who seized the opportunity to decrease their rates. The total refinance activity last week was over 27 percent higher compared to the same period a year ago.

Continue reading

“Exploring the Resilient Bond Market: A Comprehensive Recap of June 11, 2024 Mortgage News”

The bond market received a shot of much-needed intrigue on Tuesday, thanks to a strong performance of the 10-year Treasury auction. The buying activity at the auction, despite anticipation about the unveiling of CPI data and Federal Reserve reports the next day, hinted at a positive inclination underlying the market since the previous week. However, this optimism can only be validated with concrete data. Therefore, attention steers towards Wednesday’s Consumer Price Index (CPI) details.

The 10-year Auction was a heartening surprise from the usual run of events, with yields at 4.438 against the expected 4.458. The bid-to-cover ratio revealed a favorable result at 2.67 compared to the average of 2.49.

Market dynamics showed indications of resilience. The 10-year note decreased by 3.2bps to 4.451 at 10:08 AM, whereas Mortgage-Backed Securities (MBS) rose by an eighth of a point. Close to the auction, weakest levels were observed with MBS remaining constant and the 10-year note sliding down to 4.463. Post-auction, the 10-year note enjoyed solid gain by reducing 5.2bps to 4.434 and MBS prices improved with 6.0 coupons. By late afternoon, both the 10-year note and MBS almost matched their opening highs. The Treasury note was down 7bps at 4.414, and MBS notable surged by six ticks (.19).

Continue reading

“Understanding the Fluctuations: An Examination of Mortgage Rates in June 2024”

The mortgage rates for the current day are hardly different from those of the preceding two business days, showing a steady pattern. The last sizeable fluctuation was seen on Friday, when an optimistic jobs report caused a spike. Since then, each of the following two days only saw a minor 0.01% change at most mortgage lending agencies.

The absence of significant movement seemed logical yesterday, considering mortgage rates rely on bond market performance, which was close to that of Friday’s. However, today’s unchanged rates feel problematic as the bond market notably improved, particularly after the 1 PM Eastern auction of 10-year Treasury notes.

Mortgage rates and the yield on 10-year Treasury notes often move in parallel, serving as a benchmark comparison. Despite a 0.07% decrease in the 10-year Treasury yield today, the average mortgage rate only dropped by 0.01% at the time of writing.

As Treasury notes are prone to larger swings post-auction, and the timing of today’s late auction, a few mortgage lenders have consequently reduced their initial rates. However, these adjustments won’t reflect in our rate index until the following day.

Looking ahead, there might be significant changes. The release of the May Consumer Price Index (CPI) is due to happen tomorrow, prior to when mortgage lenders announce the daily rates. The CPI carries substantial influence over rate fluctuations, for better or worse, depending on the result. Preempting such volatility might discourage lenders from making any last-minute alterations.

Continue reading

“Exploring Affordable Housing, Non-QM Lending, and Lender Updates for 2024: A Comprehensive Outlook”

I embarked on a journey to Sarasota, Florida this dawn, not in pursuit of the infamous Florida Man, but to attend the MBA Florida Conference. One key subject of discussion will definitely be homeowner’s insurance. Allstate, Liberty Mutual, State Farm, USAA, and Travelers Insurance have all been earmarked as reliable insurance providers in the region. This is valuable information for Loan Originators (LOs), particularly against the backdrop of Florida’s demographic boom. Data unveiled by the United States Census Bureau indicates that Florida housed four out of the five most rapidly expanding metropolitan statistical areas in the country, and three out of the top ten that witnessed the most substantial population increase from 2022 to 2023, underscoring an enduring population surge throughout the South. From 2022 to 2023, three metro areas collectively welcomed nearly 150,000 new inhabitants: Orlando-Kissimmee-Sanford (54,916); Tampa-St.Petersburg-Clearwater (51,622); and Miami-Fort Lauderdale-West Palm Beach (43,387). Be sure not to miss today’s podcast episode, which includes an enlightening conversation with NEXA Mortgage’s Mike Kortas about the thriving broker model and the latest company developments. Our weekly podcast episodes are graciously sponsored by Richey May, a widely-acknowledged market leader in delivering specialized counsel, audit, tax, cybersecurity, technological, and other services to the mortgage industry sector. PlainsCapital Bank National Warehouse Lending, a Hilltop Holdings (NYSE: HTH) branch, is firmly committed to ensuring that mortgage lenders have access to reliable funding sources in this swiftly changing market. Boasting over three decades of industry experience and the solid backing of a well-resourced, multi-faceted financial holding company, PlainsCapital Bank National Warehouse Lending stands ready to meet all of our mortgage lending partners’ financing needs. Our strategic focus on establishing strong relationships, impressive operational performance, and long-term success set us apart from the competition. Moreover, we firmly believe in keeping everything transparent and straightforward, without any hidden or unnecessary fees. Learn more about PlainsCapital Bank National Warehouse Lending by reaching Deric Barnett at 469-955-6786.

Continue reading

“Unraveling the Complex World of Mortgage Bonds: An In-Depth Analysis of the Industry – June 2024”

Not every single day brings impactful changes or even much intrigue to the bond market. Accordingly, today might serve as a ‘filler’ day, depending solely on the result of this afternoon’s 10-year Treasury auction – the only notable event on the calendar. Despite the lack of thrills, the day compensates by being directionally harmless. Case in point, the yields have pleasantly decreased overnight and the terrain remains sturdy following a mild morning rollback. Even if the auction brings about substantial changes, it’s unlikely to match the potential turbulence that could come with tomorrow’s dual CPI/Fed event.

When it comes to interpreting today’s market shifts, conventional correlations aren’t presenting much clarity. That said, the most apparent link involves recent events that are both fresh and noteworthy. Unless you’ve kept up with foreign news, you’re not to be blamed for missing this, as it’s connected to political turbulence in France. Simply put, the associated apprehensions prompted French yields to steeply rise overnight, initiating a safety-seeking migration that was advantageous for U.S. and German debt. As of this morning, the minor fallback in Treasuries also aligns with a correction in the French market downturn.

Continue reading

“Exploring the Impacts and Implications of Today’s MBS Market Movements”

Monday saw a relatively calm trading day for bonds, even though it marked the start of a significant period of trading. No substantial economic reports were announced, though a somewhat undervalued 3-year Treasury auction prompted a minor increase in sales. However, this effect was short-term, with trading values returning to their initial state in just an hour and a half. This kept the day’s overall market mood veering between stable and slightly weaker as traders held their breath for potentially impactful data and events set for Wednesday.

Quick Review of Market Activity

At 09:58 AM, the market displayed minor weakness overnight and remained mostly unchanged since. The Mortgage-Backed Securities (MBS) dropped 3 ticks (.09), and the 10-year yield rose 1.5bps to 4.476.

By 01:40 PM, the market weakened slightly following the 3-year Treasury auction. The 10-year yield climbed by 2.8bps overall, reaching 4.489 on the day. Concurrently, the MBS in 6.0 coupons dipped by an eighth of a point.

At 03:20 PM, the market began to regain some of the losses recorded post-auction. MBS again dropped 3 ticks (.09), and the 10-year yield rose by 1.9bps, reaching 4.48.

Continue reading

“Decoding 2024: A Comprehensive Analysis of Mortgage Rates Fluctuations”

Mortgage rates have been fluctuating notably in the last fortnight, experiencing a significant increase at May’s end, a considerable dip in early June, followed by another rise after Friday’s employment statistics were revealed. In absolute figures, these events represented around an up and down movement of approximately 0.30% for the traditional 30-year fixed rate mortgages. In comparison, today’s minor increase of 0.02% from Friday’s rates by the average lender almost goes unnoticed, which is to be expected considering the absence of significant information for bond market players (who fundamentally influence daily mortgage rate trends). However, this situation won’t last for long. Things are poised to alter rapidly with imminent key inflation data release and an anticipated updated rate announcement and outlook by the Federal Reserve on Wednesday. Despite the certainty of no rate alterations in this session, there should be more lucidity regarding the Federal Reserve’s perspective on the most current inflation tendencies.

Continue reading

“Analyzing Market Movement and Economic Indicators: A Recap of June 10th Mortgage Activities”

For the past year, the bond market has significantly been influenced by the Consumer Price Index (CPI). There were moments in mid and late 2023 when the CPI brought a sense of optimism, indicating a potential decrease in inflation closer to the target. However, the story was different in Q1 2024, when a possible inflation rebound was suggested. This week’s CPI report does little to settle ongoing debates. Should the report exceed expectations, market players may continue their patient wait for stronger signs of inflationary shifts. On the other hand, if the CPI is lower than expected, Q1 could increasingly be seen as the final unpredicted inflationary push before a probable inflection point.

The release of the Federal Reserve’s latest dot plot only adds to this week’s significance – a factor that may not readily appear given the calm, sideways market performance at the start of the week.

In terms of events to watch out for today, the 1pm auction of 3-year Treasury notes stands out. Although shorter-term auctions are unlikely to trigger significant market reactions, they are nonetheless not to be ruled out.

Continue reading