Put another hash mark on the wall in the "uneventful, sideways trading day at all-time highs for MBS" column. With nothing on the calendar to offer any guidance, markets were left to their favorite past-time of late: trying to guess whether or not Greece will back out of austerity agreements and how long it would take from there for it to default and exit the EU. Such possibilities have been good for German debt which hit another record low today at 1.43+ on the 10yr Bund. US debt basks in some of that "flight-to-safety" sun with domestic 10yr Treasuries spending the day between 1.77 and 1.80. MBS Bask too, just not quite as much as the sovereign debt, but still trading a narrow range at all time highs. With Greece still in limbo, prices and yields had little cause to meaningfully test either side of ranges established by the end of the European session. Greece extended their own deadline to form a government before holding new elections. Expect more market moving Greek headlines tomorrow as well as the onset of the domestic economic data calendar. As far as how much impact scheduled Econ will have vs unscheduled European headlines, we'd expect things to stay fairly contained until a clearer picture starts to emerge for Greece.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing
is available via MBS Live.
Pricing as of 4:04 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts
and updates issued via email and text alert to MBS Live subscribers
Treasury Yields Modestly Higher, MBS Modestly Lower on Greece Updates
There has been a slow and steady unwinding of this morning's flight to safety--nothing too intense--but perhaps noticeable. The big question keeping yields low at the moment is "will Greece exit the European Union?" Between yesterday and today, hopes that Greek leaders could form a government and perhaps work toward a less cataclysmic result were waning quickly. So a few wires late in the session suggesting nothing more than those efforts will continue into tomorrow helped the undwinding process continue to some small extent.
Simply put: the overall trading levels continue to suggest there's little faith in a sweeping resolution for Greece. We've simply seen a minor adjustment from "very very very bad" to something "microscopically less bad but still pretty darn awful." In actuality, the magnitude of the recent moves seen with these newswires isn't worth writing about. The interesting part here is the fact that the moves coincided with the newswires provides valuable confirmation as to just how tuned-in markets remain to the Greece situation.
Speaking of those movements, MBS are only off a few ticks from the highs of the day, up 6 ticks still at 104-07. 10yr yields remain under 1.80, currently 4.8 bps lower vs Friday at 1.7928. Volume has been fairly strong on the day despite the narrow trading ranges.
Ally Hopes To End Mortgage Woes With ResCap Bankruptcy
(Reuters) - Ally Financial Inc's mortgage unit on Monday filed for bankruptcy and the auto lender said it will sell some international operations to help set it on a path to repaying $12 billion in bailout money.
Ally's mortgage unit, called Residential Capital, or ResCap, filed for bankruptcy protection in federal court in Manhattan under a plan that has the support of some of its creditors, although it was still expected to be a drawn-out and litigious process.
At the same time, Nationstar Mortgage Holdings, which is majority owned by Fortress Investment Group, struck a deal to buy substantially all the mortgage servicing and related assets from ResCap for about $2.4 billion, including debt. The deal will make Nationstar the opening bidder in an auction that will be held under bankruptcy court rules.
"The single-most important thing we can do for the U.S. taxpayer is to not put billions of dollars into this business on a going-forward basis," Ally CEO Michael Carpenter said in an interview.
Ally, the former lending arm of General Motors Co, has been besieged in the past few years by losses at ResCap, which was once a major subprime lender and profit engine. The company has considered bankruptcy and other ways to shed ResCap since at least 2009, but has never pulled the trigger.
A bankruptcy of ResCap now will help Ally, formerly known as GMAC, focus on its main auto lending business and put together a plan to pay back U.S. taxpayers.
Live Chat Featured Comments
EB : "wells will 100% buy it."
Edward Bohm : "steve, 1 day prior to application."
Steve Chizmadia : "Any of you guys know how long a property needs to be off the market if currently listed to do a O/O FHA streamline refi?"
Jason York : "everbank"
Curt Sandfort : "Who will accept open access with the HVE appraisal waiver at 125 ltv?"
Matthew Graham : "RTRS- GREEK RADICAL LEFT SYRIZA PARTY WILL ATTEND COALITION TALKS ON TUESDAY -PARTY SPOKESMAN "
Matthew Graham : "RTRS - GREEK SOCIALIST LEADER VENIZELOS SAYS HE IS NOT OPTIMISTIC GOVERNMENT CAN BE FORMED BUT ALL PARTIES MUST FIGHT FOR IT"
Matthew Graham : "RTRS- PRESIDENT INVITED ALL PARTIES EXCEPT FAR-RIGHT FOR MEETING AT 1100 GMT- STATE TV "
Matthew Graham : "RTRS- GREEK PRESIDENT WILL CONTINUE CONSULTATIONS TO FORM A GOVERNMENT ON TUESDAY -STATE TV "
Andrew Horowitz : "nah, I think they stick around, those divisions are making money"
John Paul Mulchay : "Na na na na, hey hey, ...."
Jeff Anderson : "Famous last words?"
Ira Selwin : "We would like to reassure all of our clients that your business relationship with Ally Bank will not be impacted by these changes. Ally remains an active participant in the Correspondent and Wholesale lending channels, and will continue to honor its commitments and purchase and fund those loans. Ally Bank continues to maintain lending relationships and continues to provide warehouse financing to those customers. In addition, Ally Bank is a direct seller to FNMA and FHLMC and maintains a servicin"
Ira Selwin : "Today, GMAC Residential Capital, LLC (ResCap) announced they have filed for bankruptcy protection. Ally Bank (dba GMAC Bank) is a separate legal entity from ResCap and operates independently of ResCap. Business Lending is an operating division of Ally Bank consisting of Warehouse Banking, Correspondent Lending and Wholesale Lending. The decisions made by ResCap do not impact ongoing operations of Ally Bank’s Business Lending Division."
Ira Selwin : "Anyone post the gmac memo today?"
MortgageMan007 : "5/3rd wholesale that is...of course retail can still do it...ugh"
Chris Kopec : "Yeah, got that email as well.....5/3 should have just renamed it "we are not duing HARP 2.0""
MortgageMan007 : "for 5/3rd I was referring to..."
MortgageMan007 : "I thought somebody typod the 105 versus 150 guess not huh"
Tony Cardinal : "We just received notice from 5/3 (both correspondent and broker), that they are no longer accepting HARP loans (DU or LP) with an LTV > 105%. Also effective immediately, they will no longer accept MI transfers on HARP loans.
If your loan was registered or locked prior to this notice, your loan is unaffected. If you have not registered or locked your loan with them, it will need to be taken elsewhere.
Tony Cardinal : "5/3rd news for anybody who hasnt heard:"
Gaius Rossini : "there is a covenant around the sanctity of that date, between the gov't and investors right now. moving that date would cause payups on this origination to fall considerably."
Gaius Rossini : "not sure about the date actually - banks would lose a good bit of money"
Gaius Rossini : "yeah chris that's why i was asking all those questions about the differences between manual and du last week."
Matthew Graham : "discussed at length in chat at the end of last week as A) unlikely to pass as is with Demarco in place but B) all agreed most facets of proposals would be generally helpful to mortgage industry and housing sector."
Matthew Graham : "and part 1: http://www.mortgagenewsdaily.com/05082012_shawn_donovan_refinancing.asp"
Matthew Graham : "yes, posted in a huge 2-parter on the congressional hearing that served as the primary source material for the discussion. Here's part 2: http://www.mortgagenewsdaily.com/05112012_refinancing_legislation.asp"
Christopher Max : "not sure if someone posted this but this would be great if passed.........Obama's proposal, from the Rob Chrisman Report, the key points are as follows, many of which are actually pretty good. 1) Extend the HARP eligibility date to May 31st 2010. (The bill mentions that May 31st 2010 was chosen because most of the loans originated after this date already have a mortgage rate below 5%.) 2) The bill would direct the GSEs to require the same streamline underwriting process..., and associated reps a"
Victor Burek : "30yr bond was the best of the 3"
Jason Wilborn : "how did our auctions go last week"
Michael Gannon : "Its not a game changer, but where does the line get drawn"
Michael Gannon : "well thats obvious lol.....but when the average loan in the midwest is 100k or smaller and the average loan in say NY is in the 300k range how can it not be prorated? Cost are higher in NY, rent, payroll, etc. "