Freddie and Fannie Will Pay Up; Rates and Bonds Little-Changed in Q1

After gathering little attention for nearly a decade, the two GSEs, Fannie Mae and Freddie Mac are making news on several fronts. Two developments in the last few days are worth noting. The Federal Housing Finance Agency confirmed on Thursday that the two GSEs will pay their fourth quarter dividends to the Treasury as scheduled. As we reported here earlier this week, there is growing concern about the ultimate result of the net dividend sweep, in which each of the GSEs is required pay Treasury all of the previous quarter's profits, less a steadily reserving cash reserve. That reserve reaches zero at the end of this year, leaving the GSE's with no capital with which to manage any downturn in the housing market. Concern about the GSE's capital reserves sparked a letter to Treasury and FHFA from

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/31/2719

For Rates, Once Again, It Depends; MLS and Public Records Aligned on Comps; ARMs on The Upswing

For the third day in a row, day-over-day mortgage rate movement depends heavily on the lender. That means some lenders will be in noticeably better shape vs their latest offerings from yesterday while others will now be quoting higher rates. At issue is the volatility in bond markets (which dictate mortgage rates). Moreover, the timing of the volatility over the past 3 days resulted in some lenders making late-day adjustments to rate sheets while others simply waited for the following morning. If that leads you to think of phrases like "it all comes out in the wash," you have the right idea. Looking past recent volatility, most lenders are right in line with their rate sheets from late last week. They've simply walked slightly different paths to get there. As far as markets are concerned, the

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/30/2717

Pending Sales Surge; Time for FHA to Ease Credit; Rates Steady; Refi Share Back to 2008 Levels

Pending home sales in February surprised everyone with an unexpected jump of 5.5 percent . The National Association of Realtors® said its Pending Home Sales Index, which is a leading indicator based on signed home purchase contracts, rose to 112.3 in February from 106.4 in January. The reading is 2.6 percent above a year earlier, and surpassed index readings for every month since May 2006 with the exception of last April. Lackluster pending home sales in recent months have worried the housing industry , indicating that the spring market might be less successful than hoped. Analysts had expected pending sales to recover from their 2.8 percent downturn in January, but they undershot the market in their estimates for February. Those polled by Econoday had been looking for an increase ranging

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/29/2715

Experian Fined for Misrepresenting Credit Scores; Rates Wait on Policy Progress

It wasn't exactly bait and switch, maybe unlawful substitution is closer to the mark. Whatever, Experian, the credit reporting company, has been handing consumers a line about their credit scoring system and CFPB caught them. The Consumer Financial Protection Bureau (CFPB) announced on Thursday Experian and its subsidiaries have agreed to a $3 million civil penalty for deceiving consumers about its own proprietary brand of credit scores. The company claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decision. CFPB says, in fact, lenders do not use these scores. Credit scores are numerical summaries designed to predict consumer payment behavior in using credit. CFPB states that no single credit score or credit scoring model is used by every lender

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/24/2707

Mortgage Rates Stumble as Political Uncertainty Weighs; New Home Sales Build on January's Strength; Arguments to Restructure CFPB

Mortgage rates were slightly higher for the first time in 8 days as markets braced for the impact of political developments. The big issue of the day was (and still is) the healthcare bill set to be debated in the House of Representatives tonight. In general, if the bill is passed, investors will be more keen to believe in the viability of other legislation more germane to financial markets (like tax cuts, other stimulus, and regulatory reform). Those "other" policy points were key reasons for the sharp move higher in rates at the end of 2016. If confidence increases , it could put the same pressure back on rates. But if investors lose confidence in the policy potential, stocks and bonds would have more motivation to move lower (as they've both been doing for the past 2 weeks). As of yesterday

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/23/2705

Low Inventory Stifles Sales; Home Prices Slam on Brakes; Rates Slightly Lower; Volatility Looms

Mortgage rates were lower for the 7th day in a row today, further extending their push into the lowest levels of the month. At first, that positive movement was driven by relief that the Fed's rate hike outlook didn't accelerate as much as investors expected. That motivation ran its course by the end of last week. Since then, political uncertainty has been a hot button, with widespread doubt surrounding the new administration's ability to pass the new health care bill. There have been several other contributing factors driving political uncertainty, but Thursday night's health care vote is a focal point. Most media reports suggest passage is unlikely, but that a modified version of the bill might be able to clear the House. Even though the Senate would still need to vote, if any sort of healthcare

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/22/2703

Rates Down to March Lows; Mortgage Profits Plummet; More on Zillow

Mortgage rates continued lower today as political uncertainty sparked the biggest day of stock market losses since the election. In general, short term pain for stocks benefits bonds. When demand for bonds increases, rates move lower. Today was no exception. Bond yields (which correlate with mortgage rates) fell in lock-step with stocks in the late morning hours. Today's improvement makes for a nice addition to several days of lower rates. In less than a week, rates have fallen quickly from 3 year highs to the lowest levels of the month . The average lender is still quoting conventional 30yr fixed rates of 4.25% on top tier scenarios, but with lower upfront costs today. Several of the more aggressive lenders are already back down to 4.125%, and fewer laggards remain at 4.375%. Loan Originator

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/21/2701

Rates at 2 Week Lows; Zillow Saga Continues; CFPB Constitutionality Hearing

Mortgage rates were steady-to-slightly lower today, keeping them in line with the lowest levels in 2 weeks and very close to the lowest levels of the month. For most lenders, that means conventional 30yr fixed rate quotes of 4.25% on top tier scenarios. Some lenders are still up at 4.375% and an aggressive few are back down to 4.125%. Last week, we discussed the motivations for the rate improvements in detail. To recap: longer-term rates like mortgages had already risen in anticipation of the Fed rate hike. It wasn't a surprise. Instead, markets were focused on the Fed's forward-looking rate hike forecasts, which came out slightly slower than markets expected. Thus, rates were overly-prepared for a fast rate hike timeline and had some room to return to early March levels. From there, attention

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/20/2699

Rates Steady to Slightly Lower; How FHA is Driving Conventional Refi Demand; Criticism of OIG's DPAP Stance

Mortgage rates managed to maintain the improvement seen since Wednesday's Fed announcement. While the Fed did indeed hike its policy rate, the hike was widely expected and had already been accounted for in longer-term bond markets (like those that dictate mortgage rates). The easiest way to understand this is to consider that most bond market securities (like Treasuries and Mortgage-Backed-Securities) can move/change every millisecond of every business day. The Fed Funds rates, on the other hand, only changes/moves at the end of scheduled Fed meetings 8 times a year . If bond markets are reasonably confident the Fed is going to hike rates, they can begin trading accordingly well in advance. That exact scenario played out over the past month and accounts for much of the move higher in rates

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/17/2695

Mortgage Rates NOT at 2017 Highs; Residential Construction Starting at Quicker Pace Despite Decline in Permits

Mortgage rates are right in line with yesterday's levels , and yesterday saw rates fall at the fastest pace of the year, ultimately reaching the lowest levels in more than a week. As such, today's rates are still the lowest in more than a week! You might not know that if you happened to hear about rates today from a big media outlet. Most are reporting the "highest rates of 2017." Here's why that's happening. Freddie Mac publishes a weekly survey that's generally regarded as the final word in long-term mortgage rate tracking. If you were only interested in long-term trends in rates, the survey would suit you very well. It's tremendously accurate over the long haul. If, however, you're interested in day-to-day or even week-to-week movements, the survey numbers can often give false impressions

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/16/2693

Rates Drop at 2017's Fastest Pace After Fed; Builder Confidence at 12-Year High

Mortgage rates fell at their fastest pace of the year following today's rate hike announcement from the Fed. If you're wondering why mortgage rates fell while the Fed's rate moved up, you're not alone. Fortunately, the explanation is simple. Financial markets had already fully accounted for the chance that the Fed would hike rates today. They'd even gone a step further an begun to account for a faster pace of future rate hikes. And it was that future outlook that allowed for our pleasant surprise. As it turns out, the median forecast among Fed members didn't see the Fed Funds rate ending the year any higher than the previous batch of forecasts (both for 2017 AND 2018). While there was no way to know exactly how much markets had prepared for the forecasts to move higher, it was certainly more

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/15/2691

Credit Reporting Change Could Raise Scores; Rates on Edge Ahead of Fed; Purchase Apps Jump

The three major credit reporting agencies have announced a significant change in their credit reporting metrics that could both boost credit scores for millions of consumers and cause potential problems for lenders. The Consumer Data Industry Association, a trade group representing credit reporting companies said late Monday that the three major companies that provide credit data, Equifax, Experian, and TransUnion , will soon remove tax lien and civil judgment data from some consumer credit records. The removal will impact most such existing data and, going forward, the way new data must be reported from the source. Starting July 1, public records data must include three of four data points , the consumer's name, address, and either a social security number or a date of birth. Existing records

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/14/2689

Rates Approach 3-Year Highs Ahead of Fed; Jobs vs Rates; Zillow, RESPA and CFPB in Spotlight

Mortgage rates rose for the 10th time in the past 11 days today, bringing them very close to highest levels in 3 years. You'd have to go back to April 30th, 2014 to see the average lender offering higher rates. The most common conventional 30yr fixed quote is easily up to 4.375% on top tier scenarios with a growing number of lenders moving up to 4.5%. Despite that gloomy assessment, there were no new major developments causing bond markets to weaken (weaker bond markets imply lower bond prices and higher rates). Rather, this has simply been the trend since late February when several Fed speakers made comments intended to " convince " financial markets that the Fed was intent on hiking the Fed Funds Rate this week. The Fed Funds Rate is an "overnight" rate--the shortest possible term used by

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/13/2687

Rates Steady Despite Strong Jobs Data. Here's Why; Shift Out of FHA; Ginnie Record

Mortgage rates held steady today, despite a key report from the Labor Department showing stronger-than-expected job creation in February. Typically, a strong jobs report is bad for rates. This one likely would have been bad as well, but markets got advance notice from another report earlier in the week. Remember Wednesday's ADP data? It thoroughly trounced the 190k expectation, coming in at 298k. Given that the ADP data attempts to track/predict the Labor Department's report, rates were able to rise preemptively before this morning's data ever came out. With the official numbers not quite as stellar as ADP suggested, bond markets (and thus, mortgage rates) were able to hold their ground. While ground-holding is good, the ground itself could be better. Rates remain at 2017's highs with the average

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/10/2683

Disappearing Jumbos; Rates Farther Into 2017 Highs; 1 Million Homes Back Above Waterline

Mortgage rates rose again today, bringing them further into the highest levels of the year. If there's anything redeeming about the move it's that it wasn't nearly as abrupt as yesterday. In fact, several lenders were fairly close to yesterday's offerings. The average lender is back up to 4.375% on top tier conventional 30yr fixed quotes. A few remain at 4.25% and some are already up to 4.5%. Bond markets (which underlie rate movement) are feeling pretty pessimistic right now, primarily due to the recent and rapid increase in Fed rate hike expectations. Beyond that, things like economic data have the potential to drive nails deeper into coffins. We saw stark evidence of that with Yesterday's ADP employment numbers (much stronger than expected) fueling speculation for a similarly strong performance

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/9/2681

Housing Confidence Surges, but Home Price Gains Ebb; More Contraction Ahead?

Home prices measured by CoreLogic's Home Price Index (HPI) for January ended a six-month long pattern of accelerating annual gains. The increases also slowed on a month-over-month basis. The company said that nationally prices were up 6.9 percent from January 2016 to January 2017. The HPI had risen by a minimum of 0.1 percent more every month than it had in the preceding month since May, increasing from 5.7 percent that month and posting a 7.2 percent annual gain in December. Home prices increased from December to January by 0.7 percent. Month-over-month appreciation had been at 1.1 percent for each of the previous six months before slipping to an 0.8 percent gain from November to December. "With lean for-sale inventories and low rental vacancy rates, many markets have seen housing prices outpace

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/7/2677

Mortgage Rate Losing Streak Pauses; 2016 Originations Set 4-Year High

After moving higher for 5 days in a row, mortgage rates finally moved a bit lower today. The improvement was fairly small, however, merely undoing Friday's modest move higher. Bonds markets (which dictate rates) continue to price in extremely high chances of a Fed rate hike next week. That wasn't entirely the case before the recent 5-day losing streak. In fact, the odds of a Fed rate hike more than doubled last week based on market metrics. This doesn't mean the Fed was half as likely to hike 2 weeks ago. Rather, it has more to do with the fact that financial markets had been sort of complacent about adjusting bond prices to reflect the probability. Complacency ended early last week and bond yields (and thus "rates") quickly adjusted to their new, higher reality). In other words, the past week

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/6/2675

Rates Rise For 5th Straight Day; More Homeowners Cashing in on New Housing Wealthy; Record Bank Earnings

Mortgage rates rose by the smallest amount of the week today, but they rose nonetheless. That caps a streak of 5 straight days spent moving in an unfriendly direction. The caveat is that we continue to deal with an overall range that is generally very narrow. Between last week's lows and this week's highs, there's scarcely more than .125% in rate. And the biggest single-day movement (Wednesday) only saw an effective rate increase of 0.07%. Each of the remaining days was 0.03% or less. That big move on Wednesday was due to comments from NY Fed President Dudley on the likelihood of a Fed rate hike in March. Markets have remained somewhat tuned in to Fed speakers since then, but even when Yellen today confirmed that a March hike was likely, there wasn't much of a response. Bottom line , financial

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/3/2671

Market Shifts May Promote Mortgage Fraud; Rates and Volatility Higher This Week; Caliber Deal

The shifting of the mortgage market toward more purchases as well as declining origination volumes are expected to boost the incidence of mortgage fraud in 2017 according to CoreLogic. The company's Fraud Index is already on the move. It shot up to 122 in the fourth quarter of 2016, matching its highest level in 2014. The jump came even though there was more than a 20 percent drop in mortgage applications at about the same time. CoreLogic's Bridget Berg, senior director of Fraud Solutions Strategy, writes in the company's blog that mortgage fraud has been at a relatively low level since strong lending controls were put in place in response to the financial crisis. However, she says emerging trends may change that, raising the level of risk significantly. She sees the long-term increase in risk

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/2/2669

New Owners' Top Regrets; Rate Spike Driven by Fed, Not Trump; Inflation Baked In?

Some homeowners aren't breaking out the champagne after they've closed on their new home purchase. Nearly half of the homeowners in a recent NerdWallet survey said that they would take a different approach toward buying if they were going through the process again. The personal finance website polled 2,241 adults in January. "One thing I'd advise — and no buyer really follows it — is to shop around and do more research not just for your loan but for the home," said Tim Manni, who covers mortgages at NerdWallet. Younger homeowners — millennials and Gen Xers — expressed the most buyer's remorse after closing on a new dwelling. About 3 in 5 of these participants said they had regrets throughout the shopping and mortgage process. What they lament the most is that they should

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/3/1/2667