Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard
Boston Fed sought cut in discount rate in Jan
(Reuters) - The Boston Federal Reserve unsuccessfully wanted in January to trim the rate the Federal Reserve charges banks for emergency loans, in part to align the so-called discount rate with the rate the Fed charges foreign central banks for dollar swaps.
Forecasts for modest growth ahead, continuing weakness in housing markets and high unemployment were also among reasons why the directors of the regional Fed bank sought a cut to 0.5 percent from the current level of 0.75 percent, according to minutes of meetings released on Tuesday by the Fed.
The Fed cut its principal policy rate, the fed funds rate, to near zero in December 2008.
While Boston sought a decrease the Kansas City Fed wanted to raise the discount rate to 1 percent, in part to restore the 1 percentage point spread between the fed funds rate and the discount rate that prevailed before the financial crisis that began in 2007.
FHFA Sends Congress Strategic Plan for Conservatorships of Fannie Mae and Freddie Mac
Federal Housing Finance Agency (FHFA) Acting Director Edward J. DeMarco today sent to Congress a strategic plan for the next phase of the conservatorships of Fannie Mae and Freddie Mac (the Enterprises). The plan builds on the Acting Director’s February 2010 letter to Congress on the conservatorships and sets forth objectives and steps
FHFA is taking or will take to meet FHFA’s obligations as conservator. Fannie Mae and Freddie Mac were placed into conservatorships Sept. 6, 2008 and have since received more than $180 billion in taxpayer support. FHFA identifies three strategic goals for the next phase of the conservatorships:
-Build: Build a new infrastructure for the secondary mortgage market;
-Contract: Gradually contract the Enterprises’ dominant presence in the marketplace
while simplifying and shrinking their operations; and
-Maintain: Maintain foreclosure prevention activities and credit availability for new
and refinanced mortgages.
MBS Hit New Lows. Negative Reprice Risk Increasing
Whether or not you'll see a reprice for the worse here depends largely on the lender in question, but with Fannie 3.5's falling to 103-02--their lows of the day--it's an increasing risk.
10yr yields have moved out of their sideways trend and broken higher, now up to 2.07%. Even so, some lenders will have priced late enough or conservatively enough to not be at much of a risk to reprice, while the traditionally faster-to-act crowd could be fairly close at currently price levels.
MBS Live Service Notice: Day Over Day Price Change
Please be aware that day-over-day pricing is currently displaying incorrectly due to a trade that was reported yesterday while markets were closed.
This does not effect Treasuries, nor does it affect the accuracy of the currently reported pricing. The error is that the day-over-day change column for MBS will appear to be roughly 9/32nds higher than it should be. Using Fannie Mae 3.5 coupons for instance, Friday’s latest tick was at 103-10, but day-over-day changes are being calculated using 103-01.
We are working to resolve the issue.
Featured Market Discussion
Tony Hicks : "US Bank prices the FHA Jumbo 5/1 with no adjustor...puts them ahead on that product, but otherwise not strong on govts right now."
Andrew Russell : "US Bank used to be the most aggressive on the high balance, FHA"
Andrew Russell : "most aggressive is Wells for you? 50 bps?"
Ira Selwin : "Depends on the investor"
Ira Selwin : "Some lenders have adjusters, some have separate rate sheet pricing"
Andrew Russell : "what is the high balance adjustor for FHA? 50 bps is the norm? Are there lenders that do not have an adjustor or are more aggressive with FHA high balance?"
Andrew Russell : "my friends, a quick FHA pricing question if you don't mind, from good ol' AR"
Jason York : "REPRICE: 2:24 PM - Chase Worse"
Dan Clifton : "REPRICE: 2:15 PM - Flagstar Worse"
Adam Dahill : "took my lumps and got 4 locked before the wells reprice"
Matthew Graham : "REPRICE: 2:02 PM - Pinnacle Worse"
Matt Hodges : "REPRICE: 1:58 PM - Wells Fargo Worse"
Michael Tadros : "REPRICE: 1:54 PM - Interbank Worse"
Brent Borcherding : "REPRICE: 1:44 PM - Sierra Pacific Worse"
Chris Kopec : "REPRICE: 1:42 PM - Caliber Funding Worse"
Roger Moore : "REPRICE: 12:52 PM - Suntrust Worse"
MMNJ : "REPRICE: 12:51 PM - Provident Funding Worse"