CoreLogic Sees Signs of Credit Cracks; Rates Unchanged Ahead of Fed Week

Here we go again? Sam Khater, CoreLogic's deputy chief economist, says loan performance is beginning to show some cracks in what has been a near perfect veneer. This might be an early signal of a downturn in the credit cycle. Khater is not issuing a warning, merely alerting those who should be watching such things to pay attention. He writes, in an article in the CoreLogic Insights blog, that a typical economic expansion and recession are strongly driven by loan performance. When times are good, lenders take on more marginal borrowers then tend to become more conservative when loan performance begins to deteriorate. That often exacerbates an economic downturn. Loan performance across the four major types of loans (agricultural, business, personal consumption, and real estate) all improved throughout

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/28/2765

Rates Fight to Stay Low; Painfully Low Inventory Saps Pending Home Sales

Mortgage rates moved lower today, following a policy announcement from the European Central Bank (ECB). Some investors were concerned the ECB might begin sprinkling in clues about rate hikes or an early end to bond buying programs, but there was no such drama in the announcement or the press conference that followed. If you're not familiar with the ECB, it's essentially Europe's version of the Federal Reserve. Both wield tremendously large balance sheets (used to control supply and demand in rates markets, and thus, rates themselves). While central banks can only truly control the shortest term rates, investors who trade the bonds that drive longer-term rates (like mortgages) are nonetheless paying very close attention . Bottom line: with the ECB not sending any threating messages about shorter

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/27/2763

Rates Hold Ground After Tax Plan; Refinance Volume Improves; Another GSE Plan; Flood Insurance Developments

Mortgage rates were relatively unchanged today, but only after averaging the disparate changes from various lenders. That means some lenders are in much better shape versus yesterday while others are noticeably worse. This sort of disparate movement isn't typical of mortgage rates across lenders, but it can happen when underlying bond markets experience volatility on back-to-back afternoons. That was indeed the case over the past 48 hours. Bond markets weakened (which pushes rates higher) yesterday afternoon, but only a handful of lenders issued reprices (new, higher rates, in response to intraday market movement). Today's volatility was in our favor resulting in several lenders issuing POSITIVE reprices. Bonds made gains into the afternoon after Trump's tax plan was released. Stock markets

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/26/2761

Fannie's Big Student Loan Changes; at 2 Week Highs; New Home Sales Surge; Prices Not Cooling

Mortgage rates moved moderately higher again higher today, as global financial markets continued reacting to recent geopolitical flashpoints (like the French election, discussed yesterday). Markets are also moving in anticipation of future flashpoints (like tomorrow's tax reform announcement). In general, investors have piled back into riskier assets like stocks because the French election reduces long-term risks to the European Union. Investors previously were more willing to buy bonds--a safe haven asset frequently used to insulate investors from increased risk. The prospects for tax reform have a similar effect in that they encourage investors to favor riskier assets at the expense of bonds . When demand for bonds decreases relative to supply, rates move higher . To be clear, we can't have

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/25/2759

Home Prices Hit Post Crisis Peak; Unexpected Impact of Tax Season; French Election Pushes Rates Higher

Home prices in February rose at their fastest pace since last June, up 0.8 percent on a month-over-month basis. Black Knight Financial Services said its national-level Home Price Index (HPI) hit $268,000 during the month, a new post-crisis peak. Prices are now up 5.7 percent compared to March 2016 and have risen 1.0 percent since the first of this year. Washington State had the largest monthly gain, up 2.2 percent. Colorado and Oregon followed with 1.6 percent and 1.5 percent growth respectively. Prices did not fall in even the worst performing of the states: West Virginia and Connecticut, were unchanged from January. They were followed by Rhode Island and Ohio with, each with 0.1 percent gains. For the third month in a row Tuscaloosa was the poorest performing metropolitan area. Prices there

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/24/2757

Lenders Speed Up Loan Processing; Existing Sales Highest Since 2007; Rates Hold Ground

The share of purchase loans originated in March climbed to 63 percent of all originations from 57 percent in February. Ellie Mae's Origination Insight Report for the month noted that this was the highest share for purchase mortgages since July 2016 when they made up 65 percent of the total. The average time to close all loans decreased to 43 days in March, down from 46 days in February, the shortest time to close since February of 2015. Similarly, the time to close a refinance dropped to 43 days from 47 days and the timeline for a purchase mortgage was 43 days, down from 45 days in February. All types of loans had shorter timelines. Closing or pull-through rates were lower for all loan types except FHA refinances. The rate for all loans fell from 70.6 percent in February to 67.9 percent. The

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/21/2753

Ocwen Sued, Shut Down in Multiple States; MBA Lays Out GSE Reform Plan; Rates Rise

There are bad days, and worse days, and there are days like Ocwen Financial Corporation (OFC) had on Thursday. The company was not only sued on multiple grounds by both the Consumer Financial Protection Bureau (CFPB) and the State of Florida, but saw its operations effectively shut down by the North Carolina Commissioner of Banks. According to CFPB, Ocwen, headquartered in West Palm Beach, Fla., is one of the nation's largest nonbank mortgage servicers. As of Dec. 31, 2016, it serviced almost 1.4 million loans with an aggregate unpaid principal balance of $209 billion. It services loans for borrowers in all 50 states and the District of Columbia. First, the North Carolina commissioner, Ray Grace, issued a cease and desist order against the company after a determination that it "has engaged

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/20/2751

Rates Steady Despite Market Weakness; Fannie Sees Faster Hikes; Refi Apps Improve

Mortgage rates were steady to slightly higher today, depending on the lender, despite bond market weakness. Typically, bond market weakness results in rates moving higher, but the timing of market movements can be important. Specifically, yesterday saw bond markets move to their best levels of the day in the afternoon--too late in the day for many lenders to react with lower rate offerings. Today's bond market weakness was intact right from the start of the trading session. As such, lenders simply kept rates close to unchanged as opposed to offering moderate improvements (something they likely would have done if bond markets held steady). Most lenders continue to quote conventional 30yr fixed rates of 4.0% on top tier scenarios. The more aggressive lenders are now back into the high 3% territory

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/19/2749

Rates Pushing Deep Into Post-Election Range; Inventory is Key; Construction Numbers Trend Higher

After stumbling just slightly yesterday, mortgage rates returned to their recent habit of setting new 2017 lows today. At this point, we're getting closer and closer to post-election lows. You'd have to go all the way back to November, 14th 2016 to see anything lower. In specific terms, even more lenders have joined the majority in quoting conventional 30yr fixed rates of 4.0% on top tier scenarios. The more aggressive lenders are now back into the high 3% territory (3.875% mainly, with a very small minority at 3.75%). Many lenders are quoting the same NOTE rates as yesterday, but today's upfront costs are moderately lower on average. Rates are benefiting from geopolitical uncertainty and a cooling-off of investor optimism over the Trump administration's fiscal policy path. Loan Originator

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/18/2747

Builder Confidence Ebbs; Rates Still Near 2017 Lows; CFPB Invites Comments; Trend is Our Friend For Now

For the third day in a row, mortgage rates set new 2017 lows this morning. But as bond markets weakened into the afternoon, several lenders recalled rate sheets for "negative reprices." This brought the afternoon's rate sheet offerings back in line with those seen on Thursday afternoon. Although that's slightly worse than this morning, rates are still effectively at 2017 lows. The average lender continues to quote 4.0% on top tier conventional 30yr fixed scenarios. Any changes from Thursday would be seen in the form of slightly higher upfront costs. Many borrowers will see no difference. While there were several economic reports today, investors remain more interested in geopolitical developments, stock prices, and currency fluctuations. Indeed, today's bounce in rates coincided with a bounced

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/17/2744

Rates Hit 2017 Lows Again; Mortgage Banking Profits Rise; New Home Sales Soar

Mortgage rates set new 2017 lows for the third straight day today, although only in terms of "effective rates" (which take upfront costs into account). "Note rates" (which simply refer to the rate applied to one's loan balance) are unchanged from yesterday, with most lenders continuing to quote 4.0% for top tier conventional 30yr fixed scenarios. There are still quite a few lenders quoting 4.125% and a very small minority already down to 3.875%. There were no new motivations for bond market movement (which dictates rates) today, but in general, rates have benefited this week from geopolitical risks and Trump's comments on the strength of the US dollar yesterday. Markets will close early today in observance of the Good Friday holiday and will be closed tomorrow. Banks will also be closed, which

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/13/2741

Rates Move Deeper Into 2017 Lows After Trump Comments; Delinquencies at 10-Year Low; Purchase Loans Set New Price Record

Mortgage rates continued lower today, bringing them even deeper into new lows for 2017. Bond markets (which underlie rate movement) were already doing just fine this morning, but got a boost from Trump's comments on the strength of the US Dollar in the afternoon. Specifically, Trump said the dollar is "too strong." The implication is that the administration will do what it can to promote a weaker dollar, and such efforts are seen simultaneously putting downward pressure on rates. Whereas lenders were more evenly split between 4.0% and 4.125% yesterday, the former now enjoys a small majority. That means that 4.0% is now the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios and that some of the more aggressive lenders are quoting 3.875%. Whether or not this means it

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/12/2739

Mortgage Rates Hit New 2017 Lows; Vacation Home Sales Plunge; Renters Feeling Less Like Buying

Mortgage rates moved lower today--significantly in some cases--with the average lender making it back to 2017's lows for the first time since January. Rates came close to 2017's lows in late February and again last week before officially crossing the line today. Bond markets (which drive mortgage rates) benefited from investors seeking safe haven after headlines broke regarding North Korea's nuclear threats against South Korea and The U.S. Other geopolitical considerations regarding Russia's potential involvement with Syrian gas attacks and the French election added to the bond market gains. As bonds gain ground, prices rise and rates move lower. Lenders are now fairly evenly split between 4.0% and 4.125% in terms of the most prevalent conventional 30yr fixed quote on top tier scenarios. A

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/11/2737

Mortgage Rates Slightly Higher, But Steady Overall; Lender Changes to Fee/Price Caps

Mortgage rates rose slightly again today, despite moderate improvement in underlying bond markets. Typically, bond market improvement corresponds to lower rates. Today was an exception because of the timing of recent volatility. Friday afternoon saw a sharp deterioration in bond markets (implies rates moving higher), but for many lenders, it was too late in the day to reissue rate sheets. Those lenders had to wait until this morning to adjust rates higher to account for the bond market movement. In simpler terms, today's higher rates are merely a delayed reaction to Friday's bond market weakness. All that having been said, mortgage rate movement continues to take place inside an exceptionally narrow range . For the past 3 weeks, most borrowers would be quoted the exact same NOTE rate from most

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/10/2735

Rates Paradoxically Higher; Servicers May Have a Problem; Housing Sentiment Cools

Mortgage rates rose modestly today, compared to yesterday's latest levels. Compared to the morning's rate sheets however, the rise was sharper, but even then, we're talking about fairly small movement in the bigger picture. 4.125% is still easily the most prevalent conventional 30yr fixed quote for top tier scenarios, with the only change being in the form of slightly higher upfront cost. It was a volatile day for financial markets with news of air strikes in Syria being the focal point for overnight trading. Bond markets (which dictate mortgage rates) started the day off in much better shape as a result. Rates only found more benefit from the big jobs report, which was much weaker than expected. Weaker economic data tends to motivate bond buying and thus, lower rates. All of the rate-friendly

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/7/2731

Rates Steady Near 2017 Lows Ahead of Jobs Report; New Jumbo Programs Driving Credit Availability Index

Mortgage rates remained largely unchanged today, on average. Once again, there was a fair amount of volatility in bond markets (which dictate rates) during the day, but said volatility was contained in a narrow range that's persisted all week. In fact, all of this week's bond market movement has taken place inside the highs and lows set on Monday. There are less pleasant places for bonds/rates to be this indecisive. Indecision here means that rates continue to operate very close to their lowest levels of the year. Only a handful of days are better, and not by much. 4.125% remains the most prevalent conventional 30yr fixed quote on top tier scenarios. Tomorrow brings the typically-very-important Employment Situation (aka "the jobs report"). It always has the potential to cause a big move in

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/6/2729

Rates Unchanged With Help From Fed; Panel Explores New Credit Score Models; Purchase Apps Increase

Mortgage rates were noticeably higher to begin the day, but most lenders offered mid-day improvements after the release of the hotly-anticipated Fed Minutes (from the March 14-15 meeting). For those that don't necessarily follow every little movement in the bond market, it's ironic that tend to move down just after the Fed releases big news that should imply higher rates. For example, in the case of the past 3 Fed rate hikes, day-to-day mortgage rates had been moving higher leading up to the hike and then generally moved lower after the hike was announced. If you've heard the phrase "buy the rumor, sell the news," that's what this paradoxical movement is all about. Market participants are so tuned-in to what will PROBABLY happen that they've fully accounted for what ACTUALLY happens. Widespread

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/5/2727

Rates Hold Steady in Spite of Markets; First Read on Feb Home Prices Surprisingly Strong

Mortgage rates were steady to slightly lower today, even though bond market movement suggested a move higher. That's interesting because mortgage rates are driven primarily by bond market movement. It's not common to see the two moving in the opposite direction. So what gives? In today's case, the discrepancy is pretty easy to explain. Bonds and rates both improved fairly substantially yesterday. Bond markets improved a bit more in the afternoon and most lenders didn't have the time or the will to react with rate sheet improvements. The late day bond market gains also set a high bar for today's measurement of improvement. In other words, today's "day-over-day change" looks worse than it is, simply because yesterday's closing levels were so good. A more holistic view shows the bonds underlying

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/4/2725

Mortgage Rates Lowest in More Than a Month; Construction Spending Increases; Prepays Nosedive, but Cash-Out Near 50%

Mortgage rates fell fairly quickly today as investors adjusted bond market holdings for the new month (higher demand for bonds coincides with lower rates). Money managers have to hold a certain mix of bonds by the end of any given month and are then free to adjust holdings as the next month begins. This adjustment can often create some of its own momentum on the first day of any given month, but today saw more than normal. Most lenders are back to quoting conventional 30yr fixed rates of 4.125% on top tier scenarios. Last week, 4.25% was slightly more prevalent. That makes today's rates the lowest since February 24th, on average--just before the Fed began talking up its rate hike likelihood for the March meeting (resulting in a quick move higher for rates of all shapes and sizes). There are

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http://www.mortgagenewsdaily.com/reports/newsletter/2017/4/3/2723