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Posted To: MBS CommentaryStrong overnight pop in Treasuries, ECB headlines cited Record low 30yr bond yield and near-record low in 10yr yield Bonds lost ground after Europe ran out of steam Bonds lost more ground after ISM data, but held on to modest gains All in all, today managed to be fairly interesting, considering its status as a "half-day before a 3-day weekend." The overnight trade was driven by some important headlines out of Europe. These dealt with the recent rumors that the ECB was considering changing its rules for how much sovereign debt it could buy from any given country. Under the current system, bond buying is based on the level of contribution that a country has made into the ECB. In other words, it's proportionate and fair. The rumor was that the ECB would consider buying more bonds...(read more)
Posted To: Mortgage Rate WatchMortgage rates fell moderately today, adding a 6th day to a winning streak that began with last week's Brexit news and bringing rates right to the brink of all-time lows. Mortgage rate movement can be measured in large and small chunks. The large chunks would be the changes in the actual interest rates being quoted and the small chunks would be the changes in the points associated with any given rate. "Points" have a historically negative connotation to some, but they're very objective, simply referring to the upfront costs or credit on a rate quote. For instance, if you were quoted a rate of 3.5% with no origination fee, you might also have the option to get a rate of 3.375% with an origination fee of 0.7% of the loan amount. Moving the other direction, a rate of 3.625% could result in the...(read more)
Posted To: MND NewsWireInvestors who purchase distressed loans through the FHA's Distressed Asset Stabilization Program (DASP) are going to have to toe a stricter line when it comes to how those loans are managed. The Department of Housing and Urban Development (HUD) has announced a series of "enhancements" to the program in response to claims by lawmakers and others that buyers have been reluctant to work with homeowners and quick to foreclose. According to a press release from HUD, the changes to the program would have purchasers of severely delinquent mortgages offer qualified borrowers principal reductions and protection from "payment shock." The new rules would also prohibit investors from abandoning low-value properties in neighborhoods hard-hit by foreclosures in order to prevent blight and increase opportunities...(read more)
Posted To: Pipeline PressThe Fourth of July is Monday...the date of the Declaration of Independence (quibble all you want about late signers); the next commentary will be Tuesday. The U.S. Census Bureau tells us when the U.S. became an independent nation on July 4, 1776 there only 2.5 million people living here; last4th of July there were 321.4 million. And everyone is talking about the UK & Brexit: $114.1 billion was the value of trade with the UK. Back in 1776, they were our enemy; now they are our 8th leading trading partner. A quick correction to a note yesterday in the commentary fortunately pointed out by several readers. BHLB, the buyer of First Choice Bank, is not Berkshire Hathaway. It's Berkshire Hills Bancorp in Western Massachusetts. Fannie Mae and the Mortgage Bankers Association (MBA) released updated...(read more)
Posted To: MBS Commentary10yr yield hit 1.382 overnight All-time low was 1.381 in July 2012 Welcome to the New Normal We had a great discussion in the live chat on MBS Live yesterday about the origins of the phrase "the new normal." Back in 2009, the "new normal" was, at its core, merely a reference to the "differentness" of this recession/recovery cycle. Analysts and investors were grasping at ways to convey that the so-called recovery would be much less fulfilling than recoveries of the past. Incidentally, two of the tenets of the "new normal" at the time were "runaway inflation" and "a bear market for stocks ." If you're at all familiar with what's happened in stocks and inflation since 2009, you know how those bets panned out. One thing the proponents...(read more)