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You are viewing Micro News from Monday, Apr 30, 2012 - View all recent Micro News
  • 4/30/12
    Fed's Loan Survey Asks New, Specific Questions Re: Mortgages
    A set of special questions asked survey respondents about residential real estate lending policies at their institutions. Banks were asked to compare their willingness to originate a GSE-eligible 30-year fixed-rate mortgage loan intended for home purchase today with their willingness in 2006 for borrowers with FICO (or equivalent) credit risk scores of 620, 680, and 720, and down payments of 10 or 20 percent (for a total of six categories of borrowers).

    A large majority of banks indicated that they were less likely to originate a GSE-eligible mortgage loan to potential borrowers with a FICO score of 620 and a 10 percent down payment than they were in 2006. Raising the down payment to 20 percent reduced the fraction of banks less likely to originate such a loan somewhat.

    A moderate net fraction of banks were less likely to originate loans to borrowers with a FICO score of 680, regardless of down payment size. A modest net fraction of banks were less likely to originate loans to borrowers with a FICO score of 720 and a 10 percent down payment, although survey respondents indicated that they were about as likely to originate loans now as they were in 2006 if such borrowers had a down payment of 20 percent.

    Most banks cited borrowers having higher costs for, or greater difficulty in obtaining, mortgage insurance coverage as an important factor contributing to the reduced likelihood of originating GSE-eligible mortgage loans. About as many respondents noted the higher risk of putbacks of delinquent mortgages by the GSEs as an important factor, and that factor was listed as the most important one by the largest number of banks.

    Similar fractions of respondents pointed to less favorable or more uncertain outlooks for house prices or for the economy more broadly as factors. A majority of respondents reported as at least somewhat important factors greater concern about their bank's exposure to residential real estate loans; increased concerns about effects of legislative changes, supervisory actions, or accounting standards; higher servicing costs if mortgages were to become delinquent; the prevailing spread of mortgage rates over cost of funds being insufficient to compensate for risks; and borrowers having higher costs of greater difficulty in obtaining simultaneous second liens.
    Category: MBS, FED, INDUSTRY
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  • 4/30/12
    If it's possible for things to be so far from exciting...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS
    Share:   
  • 4/30/12
    Census Bureau Releases Home Ownership/Rental Statistics for Q1
    National vacancy rates in the first quarter 2012 were 8.8 percent for rental housing and 2.2 percent for homeowner housing, the Department of Commerce’s Census Bureau announced today. The rental vacancy rate of 8.8 percent was 0.9 percentage points lower than the rate recorded in the first quarter 2011 (+/-0.4 percentage points) and 0.6 percentage points lower than last quarter (+/-0.4). The homeowner vacancy rate of 2.2 percent was 0.4 percentage points lower than the first quarter 2011 rate (+/-0.2) and 0.1 percentage point lower (+/-0.1)* than the rate last quarter (2.3 percent).

    The homeownership rate of 65.4 percent was 1.0 percentage points (+/-0.4) lower than the first quarter 2011 rate (66.4 percent) and 0.6 percentage points (+/-0.4) lower than the rate last quarter (66.0 percent).

    Charts, Tables, and More Data:
    Category: MBS, INDUSTRY
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  • 4/30/12
    ECON: Chicago PMI Much Weaker Than Expected
    The Chicago Institute for Supply Management today reported that its Purchasing Management Index fell to 56.2 in April vs 62.2 in March. Economists surveyed by Reuters expected today's reading to hit 61.0.

    Although this is the lowest level for the index since November 2009, a reading above 50.0 indicates that business activity continues to expand, a trend that has remained intact since October 2009.

    Drops in New Orders and Production accounted for a majority of the weakness while the Employment component actually improved to 58.7 from March's 56.3.

    market reaction: perhaps even weaker than the report itself with both MBS and Treasuries gesturing toward the morning's best levels only to shy away rather quickly. That said, the story isn't over yet. Volumes are still on the low side and further stock selling could have a beneficial effect for bond markets given the low volume and absence of other market moving data.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    Volume and volatility were all but absent overnight...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 4/30/12
    ECON: Incomes Accelerate, Spending Decelerates, Inflation Tame
    * Income +0.4 pct vs +0.3 pct consensus
    * Spending +0.3 pct vs +0.4 pct consensus
    * Core PCE +0.1583 vs +0.2 pct consensus
    * Savings rate 3.8 vs 3.7 previously
    * 'Real' consumer spending +0.1 pct vs +0.5 pct previously

    Personal income increased $50.3 billion, or 0.4 percent, and disposable personal income (DPI) increased $42.5 billion, or 0.4 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $29.6 billion, or 0.3 percent. In February, personal income increased $39.6 billion, or 0.3 percent, DPI increased $29.4 billion, or 0.2 percent, and PCE increased $93.7 billion, or 0.9 percent, based on revised estimates.

    Real disposable income increased 0.2 percent in March, in contrast to a decrease of 0.1 percent in February. Real PCE increased 0.1 percent, compared with an increase of 0.5 percent.

    Private wage and salary disbursements increased $17.3 billion in March, compared with an increase of $24.1 billion in February. Goods-producing industries' payrolls decreased $1.3 billion, in contrast to an increase of $1.8 billion; manufacturing payrolls increased $0.1 billion, compared with an increase of $1.6 billion. Services-producing industries' payrolls increased $18.6 billion, compared with an increase of $22.3 billion. Government wage and salary disbursements increased $1.4 billion, compared with an increase of $0.7 billion.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    Fed's Loan Survey Asks New, Specific Questions Re: Mortgages
    A set of special questions asked survey respondents about residential real estate lending policies at their institutions. Banks were asked to compare their willingness to originate a GSE-eligible 30-year fixed-rate mortgage loan intended for home purchase today with their willingness in 2006 for borrowers with FICO (or equivalent) credit risk scores of 620, 680, and 720, and down payments of 10 or 20 percent (for a total of six categories of borrowers).

    A large majority of banks indicated that they were less likely to originate a GSE-eligible mortgage loan to potential borrowers with a FICO score of 620 and a 10 percent down payment than they were in 2006. Raising the down payment to 20 percent reduced the fraction of banks less likely to originate such a loan somewhat.

    A moderate net fraction of banks were less likely to originate loans to borrowers with a FICO score of 680, regardless of down payment size. A modest net fraction of banks were less likely to originate loans to borrowers with a FICO score of 720 and a 10 percent down payment, although survey respondents indicated that they were about as likely to originate loans now as they were in 2006 if such borrowers had a down payment of 20 percent.

    Most banks cited borrowers having higher costs for, or greater difficulty in obtaining, mortgage insurance coverage as an important factor contributing to the reduced likelihood of originating GSE-eligible mortgage loans. About as many respondents noted the higher risk of putbacks of delinquent mortgages by the GSEs as an important factor, and that factor was listed as the most important one by the largest number of banks.

    Similar fractions of respondents pointed to less favorable or more uncertain outlooks for house prices or for the economy more broadly as factors. A majority of respondents reported as at least somewhat important factors greater concern about their bank's exposure to residential real estate loans; increased concerns about effects of legislative changes, supervisory actions, or accounting standards; higher servicing costs if mortgages were to become delinquent; the prevailing spread of mortgage rates over cost of funds being insufficient to compensate for risks; and borrowers having higher costs of greater difficulty in obtaining simultaneous second liens.
    Category: MBS, FED, INDUSTRY
    Share:   
  • 4/30/12
    Census Bureau Releases Home Ownership/Rental Statistics for Q1
    National vacancy rates in the first quarter 2012 were 8.8 percent for rental housing and 2.2 percent for homeowner housing, the Department of Commerce’s Census Bureau announced today. The rental vacancy rate of 8.8 percent was 0.9 percentage points lower than the rate recorded in the first quarter 2011 (+/-0.4 percentage points) and 0.6 percentage points lower than last quarter (+/-0.4). The homeowner vacancy rate of 2.2 percent was 0.4 percentage points lower than the first quarter 2011 rate (+/-0.2) and 0.1 percentage point lower (+/-0.1)* than the rate last quarter (2.3 percent).

    The homeownership rate of 65.4 percent was 1.0 percentage points (+/-0.4) lower than the first quarter 2011 rate (66.4 percent) and 0.6 percentage points (+/-0.4) lower than the rate last quarter (66.0 percent).

    Charts, Tables, and More Data:
    Category: MBS, INDUSTRY
    Share:   
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  • 4/30/12
    A set of special questions asked survey respondents about residential real estate lending policies at their institutions. Banks were asked to compare their willingness to originate a GSE-eligible 30-year fixed-rate mortgage loan intended for home purchase today with their willingness in 2006 for borrowers with FICO (or equivalent) credit risk scores of 620, 680, and 720, and down payments of 10 or 20 percent (for a total of six categories of borrowers).

    A large majority of banks indicated that they were less likely to originate a GSE-eligible mortgage loan to potential borrowers with a FICO score of 620 and a 10 percent down payment than they were in 2006. Raising the down payment to 20 percent reduced the fraction of banks less likely to originate such a loan somewhat.

    A moderate net fraction of banks were less likely to originate loans to borrowers with a FICO score of 680, regardless of down payment size. A modest net fraction of banks were less likely to originate loans to borrowers with a FICO score of 720 and a 10 percent down payment, although survey respondents indicated that they were about as likely to originate loans now as they were in 2006 if such borrowers had a down payment of 20 percent.

    Most banks cited borrowers having higher costs for, or greater difficulty in obtaining, mortgage insurance coverage as an important factor contributing to the reduced likelihood of originating GSE-eligible mortgage loans. About as many respondents noted the higher risk of putbacks of delinquent mortgages by the GSEs as an important factor, and that factor was listed as the most important one by the largest number of banks.

    Similar fractions of respondents pointed to less favorable or more uncertain outlooks for house prices or for the economy more broadly as factors. A majority of respondents reported as at least somewhat important factors greater concern about their bank's exposure to residential real estate loans; increased concerns about effects of legislative changes, supervisory actions, or accounting standards; higher servicing costs if mortgages were to become delinquent; the prevailing spread of mortgage rates over cost of funds being insufficient to compensate for risks; and borrowers having higher costs of greater difficulty in obtaining simultaneous second liens.
    Category: MBS, FED, INDUSTRY
    Share:   
  • 4/30/12
    If it's possible for things to be so far from exciting...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS
    Share:   
  • 4/30/12
    National vacancy rates in the first quarter 2012 were 8.8 percent for rental housing and 2.2 percent for homeowner housing, the Department of Commerce’s Census Bureau announced today. The rental vacancy rate of 8.8 percent was 0.9 percentage points lower than the rate recorded in the first quarter 2011 (+/-0.4 percentage points) and 0.6 percentage points lower than last quarter (+/-0.4). The homeowner vacancy rate of 2.2 percent was 0.4 percentage points lower than the first quarter 2011 rate (+/-0.2) and 0.1 percentage point lower (+/-0.1)* than the rate last quarter (2.3 percent).

    The homeownership rate of 65.4 percent was 1.0 percentage points (+/-0.4) lower than the first quarter 2011 rate (66.4 percent) and 0.6 percentage points (+/-0.4) lower than the rate last quarter (66.0 percent).

    Charts, Tables, and More Data:
    Category: MBS, INDUSTRY
    Share:   
  • 4/30/12
    The Chicago Institute for Supply Management today reported that its Purchasing Management Index fell to 56.2 in April vs 62.2 in March. Economists surveyed by Reuters expected today's reading to hit 61.0.

    Although this is the lowest level for the index since November 2009, a reading above 50.0 indicates that business activity continues to expand, a trend that has remained intact since October 2009.

    Drops in New Orders and Production accounted for a majority of the weakness while the Employment component actually improved to 58.7 from March's 56.3.

    market reaction: perhaps even weaker than the report itself with both MBS and Treasuries gesturing toward the morning's best levels only to shy away rather quickly. That said, the story isn't over yet. Volumes are still on the low side and further stock selling could have a beneficial effect for bond markets given the low volume and absence of other market moving data.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    Volume and volatility were all but absent overnight...
    MBS Updates are a service provided to MBS Live! subscribers only.
    Learn More | Start a Free Trial | View MBS Prices
    Category: MBS, alert
    Share:   
  • 4/30/12
    * Income +0.4 pct vs +0.3 pct consensus
    * Spending +0.3 pct vs +0.4 pct consensus
    * Core PCE +0.1583 vs +0.2 pct consensus
    * Savings rate 3.8 vs 3.7 previously
    * 'Real' consumer spending +0.1 pct vs +0.5 pct previously

    Personal income increased $50.3 billion, or 0.4 percent, and disposable personal income (DPI) increased $42.5 billion, or 0.4 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $29.6 billion, or 0.3 percent. In February, personal income increased $39.6 billion, or 0.3 percent, DPI increased $29.4 billion, or 0.2 percent, and PCE increased $93.7 billion, or 0.9 percent, based on revised estimates.

    Real disposable income increased 0.2 percent in March, in contrast to a decrease of 0.1 percent in February. Real PCE increased 0.1 percent, compared with an increase of 0.5 percent.

    Private wage and salary disbursements increased $17.3 billion in March, compared with an increase of $24.1 billion in February. Goods-producing industries' payrolls decreased $1.3 billion, in contrast to an increase of $1.8 billion; manufacturing payrolls increased $0.1 billion, compared with an increase of $1.6 billion. Services-producing industries' payrolls increased $18.6 billion, compared with an increase of $22.3 billion. Government wage and salary disbursements increased $1.4 billion, compared with an increase of $0.7 billion.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    ECON: Chicago PMI Much Weaker Than Expected
    The Chicago Institute for Supply Management today reported that its Purchasing Management Index fell to 56.2 in April vs 62.2 in March. Economists surveyed by Reuters expected today's reading to hit 61.0.

    Although this is the lowest level for the index since November 2009, a reading above 50.0 indicates that business activity continues to expand, a trend that has remained intact since October 2009.

    Drops in New Orders and Production accounted for a majority of the weakness while the Employment component actually improved to 58.7 from March's 56.3.

    market reaction: perhaps even weaker than the report itself with both MBS and Treasuries gesturing toward the morning's best levels only to shy away rather quickly. That said, the story isn't over yet. Volumes are still on the low side and further stock selling could have a beneficial effect for bond markets given the low volume and absence of other market moving data.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    ECON: Incomes Accelerate, Spending Decelerates, Inflation Tame
    * Income +0.4 pct vs +0.3 pct consensus
    * Spending +0.3 pct vs +0.4 pct consensus
    * Core PCE +0.1583 vs +0.2 pct consensus
    * Savings rate 3.8 vs 3.7 previously
    * 'Real' consumer spending +0.1 pct vs +0.5 pct previously

    Personal income increased $50.3 billion, or 0.4 percent, and disposable personal income (DPI) increased $42.5 billion, or 0.4 percent, in March, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $29.6 billion, or 0.3 percent. In February, personal income increased $39.6 billion, or 0.3 percent, DPI increased $29.4 billion, or 0.2 percent, and PCE increased $93.7 billion, or 0.9 percent, based on revised estimates.

    Real disposable income increased 0.2 percent in March, in contrast to a decrease of 0.1 percent in February. Real PCE increased 0.1 percent, compared with an increase of 0.5 percent.

    Private wage and salary disbursements increased $17.3 billion in March, compared with an increase of $24.1 billion in February. Goods-producing industries' payrolls decreased $1.3 billion, in contrast to an increase of $1.8 billion; manufacturing payrolls increased $0.1 billion, compared with an increase of $1.6 billion. Services-producing industries' payrolls increased $18.6 billion, compared with an increase of $22.3 billion. Government wage and salary disbursements increased $1.4 billion, compared with an increase of $0.7 billion.
    Category: MBS, ECON
    Share:   
  • 4/30/12
    Fed's Loan Survey Asks New, Specific Questions Re: Mortgages
    A set of special questions asked survey respondents about residential real estate lending policies at their institutions. Banks were asked to compare their willingness to originate a GSE-eligible 30-year fixed-rate mortgage loan intended for home purchase today with their willingness in 2006 for borrowers with FICO (or equivalent) credit risk scores of 620, 680, and 720, and down payments of 10 or 20 percent (for a total of six categories of borrowers).

    A large majority of banks indicated that they were less likely to originate a GSE-eligible mortgage loan to potential borrowers with a FICO score of 620 and a 10 percent down payment than they were in 2006. Raising the down payment to 20 percent reduced the fraction of banks less likely to originate such a loan somewhat.

    A moderate net fraction of banks were less likely to originate loans to borrowers with a FICO score of 680, regardless of down payment size. A modest net fraction of banks were less likely to originate loans to borrowers with a FICO score of 720 and a 10 percent down payment, although survey respondents indicated that they were about as likely to originate loans now as they were in 2006 if such borrowers had a down payment of 20 percent.

    Most banks cited borrowers having higher costs for, or greater difficulty in obtaining, mortgage insurance coverage as an important factor contributing to the reduced likelihood of originating GSE-eligible mortgage loans. About as many respondents noted the higher risk of putbacks of delinquent mortgages by the GSEs as an important factor, and that factor was listed as the most important one by the largest number of banks.

    Similar fractions of respondents pointed to less favorable or more uncertain outlooks for house prices or for the economy more broadly as factors. A majority of respondents reported as at least somewhat important factors greater concern about their bank's exposure to residential real estate loans; increased concerns about effects of legislative changes, supervisory actions, or accounting standards; higher servicing costs if mortgages were to become delinquent; the prevailing spread of mortgage rates over cost of funds being insufficient to compensate for risks; and borrowers having higher costs of greater difficulty in obtaining simultaneous second liens.
    Category: MBS, FED, INDUSTRY
    Share:   
 
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