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Do you expect the home buyer tax credit extension to contribute to a noticeable pick up in loan production?

Created By: Adam Quinones
  • Yes, I anticipate an increase in activity (26.6%)
  • Only a modest upturn in production (44.5%)
  • Nope. 2009 demand stole from 2010 demand (28.9%)

Federal Reserve MBS Purchase Program





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  • MBS CLOSE: August Goes Out On A High Note

    Comments (1)
    by Matthew Graham on August 31 2009, 5:58 PM
    With prices hovering nearly a half point over par in 4.5's, these are the best levels since 7/31/09 which closed a scant 5 ticks higher at 100-20. Before then, you'd have to go all the way back to July 10th to see higher prices. But what's the risk that current trading is merely another iteration of the high side of the summer range bind? Or that once Class A settlement hits in a few weeks that the resulting price drop will leave us in the exact same range? Unknowns aside, we do know that today's gains are by no mean a definitive break of the trend, especially when viewed in the context of the following chart.
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  • MBS AFTERNOON: Rally Was Just Too Easy

    Comments (0)
    by Adam Quinones on August 31 2009, 4:23 PM
    Today's MBS rally was just too darn easy...speculative buying ahead of month index extension purchases added demand side support, then bid lists (BWIC:bids wanted in competition)benefited from looming prepayment reports. This is a factor of market participants wanting to buy "prepay protected" pools. These are MBS pools which have already proven themselves as stable performers...generally UIC players buy these specified pools. Then of course the Federal Reserve was around the absorb any and all originator offerings (lenders selling rate locks). It was just an easy day...all momentum was positive.
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  • MBS LUNCH: Perspective Amidst Reprices For The Better

    Comments (7)
    by Matthew Graham on August 31 2009, 1:38 PM
    Any time charts start to take shapes similar to those seen above, reprices for the better are usually not far behind. One thing we continually mention is the necessity of a stock market correction in order to validate any meaningful gains in the bond market. Though stock losses today and Friday (if you could call them that) are nothing to write home about. Overall, the improving range for stocks is not in jeopardy yet.
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  • MBS MORNING: Back to the Highs of the Day

    Comments (6)
    by Adam Quinones on August 31 2009, 11:40 AM
    Annnnnnd we're back to the highs of the day. The FN 4.5 is currently +0-07 at 100-13. From the 20 some odd mainstream rate sheets we've seen...mortgage rates are sliiightly lower today (rebates a little more robust). Just an FYI...we really hate sending ALERTS in the current market environment. The term ALERT implies PANIC...we're not panicking, neither should you. Current trading flows do not reflect a fundamental bias. We will begin to place more weight on trends when the market goes back to work at the end of this week/after Labor Day. Until then its more highs and lows in short time frames...
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  • MBS ALERT: Six Ticks Lower at Bad Time

    Comments (2)
    by Adam Quinones on August 31 2009, 10:08 AM
    The FN 4.5 has fallen 6 ticks from a bid of 100-13 to 100-07. Currently the rate sheet influential FN 4.5 is +0-01 on the day after being as high as +0-07 (7 ticks or 7/32nds). As many lenders are currently publishing rate sheets...this is bad timing. We wouldnt be surprised to see a slight delay in rate sheets as lenders wait for a range to develop. If you already received pricing this morning, it may be recalled. Again choppiness is expected to continue this week, lenders are aware of secondary market conditions and will likely keep a cushion in pricing to avoid rapidly changing price levels.
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  • MBS OPEN: More Erratic Action Expected

    Comments (1)
    by Adam Quinones on August 31 2009, 8:48 AM
    The Week Ahead... Supportive time of month for MBS. Massive index extension means increased demand for longer life MBS (RATE SHEET INFLUENTIAL). Implied volatility generally lower ahead of NFP. Prepayment reinvestments. Regardless of supportive events...if benchmark prices are lower, MBS prices will be lower and mortgage rates will increase. (Supportive events may help MBS outperform TSYs yield spread-wise). No TSY supply = helpful. More Seasonal Slowness, more choppy price action
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  • MBS CLOSE: August Highs... Any Higher? (part 2)

    Comments (5)
    by Matthew Graham on August 28 2009, 5:17 PM
    Cat Stevens was so close... If he had but included the word "trader's," his uber-hit could be dusted off and added to the market theme song shelf. I suppose he could also have replace the word "world" with "market" and acheived a similar effect. Whatever markets are doing and getting ready to do is wild--NOT "wild" in the sense of outrageous--but rather in the sense that it's just terribly terribly fascinating. Good-bye August:
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  • MBS AFTERNOON: Indecisive Marketplace Makes Us Nervous

    Comments (6)
    by Adam Quinones on August 28 2009, 3:35 PM
    Although we would love nothing more than to tell you that the market will happily continue to trade in this narrow region...given the current "BETTER THAN EXPECTED", cost cutting, GDP growth that is anticipated the third and fourth quarters.....the RECOVERY trade just might carry on in stock markets, which may not bode well for fixed income.
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  • MBS LUNCH: Range-Trade Continues To Mystify

    Comments (2)
    by Matthew Graham on August 28 2009, 12:46 PM
    I'm not exactly sure why, but even though we WRITE as if we expect price action like today's to occur, and even though it is getting to be less and less of a surprise, it somehow has not lost any of it's intrigue lo these many weeks. If you take a look at yesterday's close you can see the exact same damn thing happened today as yesterday. (more...). Prices did an AM head fake as if the fundamental data were going to be important, but shortly thereafter, ranges and volatilities moderated and most everything held within a channel implied by the previous trend. Same story today:
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  • MBS MORNING: Not Panicking in Choppy Price Action

    Comments (37)
    by Adam Quinones on August 28 2009, 10:12 AM
    Prior to the data release the FN 4.5 fell to an intraday low of 99-24. Usually this would warrant an MBS ALERT...but we didnt feel it was necessary, plus we didnt want to ruin your morning :-D. Knee jerk reactions have been a common occurrence in the rate market lately...no need to panic.
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  • MBS OPEN: Near Highest Yields of the Week

    Comments (3)
    by Adam Quinones on August 28 2009, 8:31 AM
    After ignoring logic all week, we hope the range doesnt breakdown as traders look to return "status quo" to the rates market. This could result yields pushing back to last Friday's closing marks near 3.56%. If so 100-00 would be a welcomed support level for the FN 4.5...mortgage rates should remain range bound, however given early morning price action your rebates should be a bit lighter this AM.
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  • MBS CLOSE: The Triangle Show

    Comments (3)
    by Matthew Graham on August 27 2009, 5:45 PM
    Another uninspiring and underwhelming day where after the customary bit of "chop-chop" (as in choppy price movements?) gives way to a fairly predictable range trade through the close. Well, at least this stuff is predictable in hindsight right? I mean, why did we even bother doing anything that could be considered analysis this AM right? Wouldn't it be easier to simply say, "oh, we're at 100-12? Plan on a range-bound moderation toward par by day's end, with unimportant choppiness in between..."
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  • MBS AFTERNOON: Looking at Lacker's MBS Related Comments

    Comments (1)
    by Adam Quinones on August 27 2009, 4:00 PM
    From the influx of emails I received it appears many readers are reacting negatively to statements made by Richmond Fed Pres. Jeffrey Lacker this morning. It's important to put his statement in context. So let's discuss the banking system...
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  • MBS ALERT: Lowest Prices Since Auction

    Comments (6)
    by Matthew Graham on August 27 2009, 1:55 PM
    This is one of those MBS UPDATE's that was conceived as just that: a simple update on how the post-auction trading is going. Shortly before beginning to write, we took the short move down from 100-07 to 100-03. There are several ways to interpret this, all of them valid. Unfortunately, there are several different eventualities for lenders as well. More likely than not, this is not a big enough move to warrant reprices, but if your lender has shown a predisposition in the past to base reprices off the movement from the last high as opposed to the overall movement of the day, it's not impossible to see reprices either.
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  • MBS LUNCH: 7 year Auction 2.74 BTC, 3.092 High Yield, 61.2% Indirects

    Comments (1)
    by Adam Quinones on August 27 2009, 1:00 PM
    The Treasury Department just auctioned $28 billion 7 year notes. This is the second consecutive auction at record size, July's being the first. In total this week's 2yr/5yr/7r auctions raised $90 billion for the Treasury. The bid to cover ratio, a measure of demand for the issuance, was 2.74%. The second highest demand since the issue reopened in February. Good Demand.Imediately following the auction, the FN 4.5 shot to the topside of the recent range, then retraced a few ticks, and is bouncing between 100-10 and 100-07.
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