MBSonMND: MBS MID-DAY
Open MBSonMND Dashboard
FNMA 3.5
100-18 : +0-04
FNMA 4.0
103-16 : -0-01
FNMA 4.5
105-12 : -0-04
FNMA 5.0
107-07 : -0-08
GNMA 3.5
102-02 : +0-10
GNMA 4.0
105-18 : +0-03
GNMA 4.5
107-23 : -0-04
GNMA 5.0
109-16 : -0-05
FHLMC 3.5
100-12 : +0-03
FHLMC 4.0
103-12 : -0-01
FHLMC 4.5
105-07 : -0-03
FHLMC 5.0
107-01 : -0-08
Pricing as of 11:00 AM EST
Morning Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard .
11:00AM  :  ECON: KC Fed Factory Index Shows Growth in August
(Reuters) - A gauge of factory activity in Kansas and surrounding states pointed to modest growth in August, standing in contrast with other surveys that have suggested weak U.S. manufacturing during the month. The Federal Reserve Bank of Kansas City said on Thursday its composite index of regional manufacturing held steady at 3 in August, unchanged from a month earlier. "Factory activity in our region continues to be buoyed by strong growth among agriculture and energy-related manufacturers," said Kansas City Fed economist Chad Wilkerson. Last week, the Philadelphia Fed's factory survey showed output plunged in the Mid-Atlantic region in August, dampening hopes for a quick revival in growth. Data from other regional Fed factory indexes has also been weak. Any reading below zero in the Kansas City Fed index indicates contraction in the region's manufacturing. The index is a measure of factory output, shipments, new orders and employment in the region. The index for output was minus 2 during August, pointing to contraction, while employment and new orders indexes pointed to growth. The survey covers factories in Kansas, Colorado, Nebraska, Oklahoma and Wyoming, as well as the western third of Missouri and the northern half of New Mexico. (Reporting by Jason Lange; Editing by Neil Stempleman)
9:51AM  :  MBS Green to Red to Green on Buffett-Inspired Stock Swing
MBS and Treasuries are recovering from news that Berkshire Hathaway will invest $5 bln in Bank of America. Stock futures exploded higher on the news, from around 1170 to 1185 in S&P futures, and ultimately up over 1190 in the cash market open. But since then, they must have gotten the phone call that despite Buffett's sagacious wisdom of the past, this BofA investment is dumb, and it doesn't fix the economy, because S&Ps are back down to 1182.24. After initially turning red on the stock rally, MBS and Treasuries are back to green. 4.0's are at 103-17 and 10yr notes at 2.2533. There's no other economic data or unexpected displays of "strategy" expected this morning. (OK, so maybe we're not actually sure if anything unexpected is expected, but given the ultimate course of trading that followed this "unexpected" announcement, it might as well have been expected). What we do know is that the next expected item of importance will be the 1pm auction of 7yr notes.
9:42AM  :  Fed: A Private Lender Cooperative Model for Residential Mortgage Finance
"We describe a set of six design principles for the reorganization of the U.S. housing finance system and apply them to one model for replacing Fannie Mae and Freddie Mac that has so far received frequent mention but little sustained analysis – the lender cooperative utility. We discuss the pros and cons of such a model and propose a method for organizing participation in a mutual loss pool and an explicit, priced government insurance mechanism. We also discuss how these principles and this model are consistent with preserving the “to-be-announced,” or TBA, market – particularly if the fixed-rate mortgage remains a focus of public policy."
9:01AM  :  U.S. May Back Refinance Plan for Mortgages
The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing. One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information. A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.
8:53AM  :  ALERT: MBS, Treasuries Improved this AM on Weak Jobless Claims
Despite a decent smattering of bond-bullish developments overnight, MBS and Treasuries were little changed earlier this morning. But a 417k print on weekly Jobless claims has things back into the green. Fannie 4.0's are back to yesterday's pre-auction levels at 103-20, and 10yr notes are down from 2.30+ to 2.273. On a disturbing note, 10yr yields just bounced off the trendline that initially provided support yesterday at 2.257. So we'll have to keep an eye on that to see if 10's have ongoing technical issues moving lower. If current levels hold, rate sheets should be improved today, but perhaps conservatively so given tomorrow's high impact event.
8:35AM  :  ECON: Jobless Claims Remain Over 400k
(Reuters) - Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 417,000, the Labor Department said, but still nowhere near levels that would signal a recession. Striking Verizon workers filed 8,500 claims for jobless benefits last week, after submitting 12,500 applications the previous week, which covered the period for the August nonfarm payrolls survey. That suggests that the strike would have a negative affect on the payrolls count, which will be reported on Sept. 2. The strike against Verizon has ended. Economists polled by Reuters had forecast claims rising to 405,000 last week. The prior week's claims were revised up to 412,000 from the previously reported 408,000. While the labor market regained some ground in July a new wave of layoffs especially in the financial sector, coupled with the deterioration in business sentiment, could reverse the trend in the months ahead. Employers added 117,000 new jobs in July after increasing payrolls by only 99,000 in May and June combined. A Labor Department official said there was nothing unusual in the state-level data. The four-week moving average of claims, considered a better measure of labor market trends, rose 4,000 to 407,500. The number of people still receiving benefits under regular state programs after an initial week of aid fell 80,000 to 3.64 million in the week ended Aug.13. Data for the so-called continuing claims covered the survey period for the household survey from which the unemployment rate is derived. The unemployment rate fell to 9.1 percent from 9.2 percent in June. The number of Americans on emergency unemployment benefits fell 43,827 to 3.09 million in the week ended Aug. 6, the latest week for which data is available. (Reporting by Lucia Mutikani; Editing by Neil Stempleman)
6:53AM  :  New MBS Commentary Post

Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard .
Adam Quinones  :  "Government Sponsored Refinance Program Not Likely. What About a 21st Century Homestead Act?: http://www.mortgagenewsdaily.com/channels/pipelinepress/08252011-berkshire-hathaway-bofa.aspx"
Daniel Kramer  :  "Gaius, yes, i do believe getting rid of LLPAs on the HARP programs would help greatly. You got a condo or 2-4 unit property, high ltv, under 700 credit, cltv over 100%, all those LLPAs will kill the refi and make it not worth doing for borrower"
Brett Boyke  :  "NYT article this morning not helping MBS"
Gaius Rossini  :  "DK you really think LLPAs would help that much - that's one of the things i can see them doing actually"
Victor Burek  :  "flagstar about .4 better this morning"
Alan Craft  :  "Buffett makes back 15% of $5 billion BofA deal fast August 25, 2011, 9:59 AM Warren Buffett’s already made back 15 percent of his $5 billion investment in Bank of America and the deal’s barely an hour old. Buffett’s Berkshire Hathaway BRK.A BRK.B is acquiring 50,000 preferred shares of Bank of America BAC with a 6% dividend and a 5% redemption premium. In addition, Berkshire’s getting 700 million warrants with an exercise price of $7.142857 a share. With Bank of America stock rallying to $8.2"
Daniel Kramer  :  "For HARP to work effectively and fairly, they need to get rid of all LLPA's, since they own the loan already, and have to seriously address the issue with borrowers with a 2nd lien that needs to be subordinated. Either let them combine them, or force the lenders holding the seconds, to agree to subordinate. 50% of my HARP deals die due to LLPAs and/or suborindation rejetcions."
Gaius Rossini  :  "CNBC just used the words, "national 4% refi". it's amazing how these things get blown out of proportion"
Matthew Graham  :  "RTRS- BANK OF AMERICA BAC.N CREDIT DEFAULT SWAP COSTS FALL 74 BPS TO 285 BPS ON BERKSHIRE INVESTMENT "
Bert Swyers  :  "10's makin a move, mbs is like Im cool"
Matthew Graham  :  "RTRS- BANK OF AMERICA'S MOYNIHAN SAYS "I REMAIN CONFIDENT THAT WE HAVE THE CAPITAL AND LIQUIDITY WE NEED TO RUN OUR BUSINESS" "
Matthew Graham  :  "RTRS - WARREN BUFFETT-"I AM IMPRESSED WITH THE PROFIT-GENERATING ABILITIES OF THIS FRANCHISE""
Matthew Graham  :  "RTRS - WARREN BUFFETT-"BANK OF AMERICA IS A STRONG, WELL-LED COMPANY, AND I CALLED BRIAN TO TELL HIM I WANTED TO INVEST IN IT" "
Matthew Graham  :  "RTRS- BANK OF AMERICA - ANNOUNCED TODAY THAT IT REACHED AN AGREEMENT TO SELL 50,000 SHARES OF CUMULATIVE PERPETUAL PREFERRED STOCK "
Matthew Graham  :  "RTRS - BERKSHIRE HATHAWAY TO INVEST $5 BILLION IN BANK OF AMERICA"
rford  :  "Damn you Buffet! must be nice to have a few extra billion laying around to save BofA and the stock market as a whole! "
Dean Gorenflo  :  "Persons covered. All persons must comply with the advertising provisions in §§226.16 and 226.24, not just those that meet the definition of creditor in §226.2(a)(17). Thus, home builders, merchants, and others who are not themselves creditors must comply with the advertising provisions of the regulation if they advertise consumer credit transactions. However, under section 145 of the act, the owner and the personnel of the medium, in which an advertisement appears, or through which it is dissemi"
Dean Gorenflo  :  "Reg Z. staff interpretation for you MH:"
Adam Dahill  :  "Everyone see Citimortgage's bulletin? They are waiving the .5pr margin for floatdown. free float downs for certain loans locked in Aug"
Grant R. Menard  :  "good morning all... not looking forward to lenders asking for drivebyes on current pipeline after IRENE here in mass.. UGH"
Victor Burek  :  "but anyone advertising a rate must show apr"
Brent Borcherding  :  "I believe the answer to that is no, Hodgie, they are not, but is the realtor REALLY advertising that rate or is someone he or she works with?"
Thomas Quann  :  "I think a realtor can't advertise rate period. Re: brokers we must disclose apr, terms etc when showing rate."
Matt Hodges  :  "RESPA question: we as lenders must advertise APR if we quote a specific scenario in a public way - advertisement or listing sheet. Are Realtors bound by the same? I ran across a condo complex specifically identifying a scenario with interest rate, but no APR"
Matthew Graham  :  "RTRS - US INSURED UNEMPLOYMENT RATE FELL TO 2.9 PCT AUG 13 WEEK FROM 3.0 PCT PRIOR WEEK (PREV 2.9 PCT) "
Matthew Graham  :  "RTRS- US CONTINUED CLAIMS FELL TO 3.641 MLN, LOWEST SINCE SEPT 2008, (CON. 3.700 MLN) AUG 13 WEEK FROM 3.721 MLN PRIOR WEEK (PREV 3.702 MLN) "
Matthew Graham  :  "RTRS - US JOBLESS CLAIMS 4-WK AVG ROSE TO 407,500 AUG 20 WEEK FROM 403,500 PRIOR WEEK (PREVIOUS 402,500) "
Matthew Graham  :  "RTRS - LABOR DEPT SAYS CWA STRIKE AGAINST VERIZON ADDED AT LEAST 8,500 NEW CLAIMS LAST WEEK, 12,500 IN AUG 13 WEEK "
Matthew Graham  :  "RTRS - US JOBLESS CLAIMS ROSE TO 417,000 AUG 20 WEEK (CONSENSUS 405,000) FROM 412,000 PRIOR WEEK (PREVIOUS 408,000) "