MBS Live: MBS Morning Market Summary
MBS and, to a greater extent, Treasuries have been off to the races this morning where the latter is currently trading into the 1.63's--record territory within the scope of modern economic history, and largely driven by the record low yields in EU Benchmark German Bunds hitting record lows as well (currently under 1.27%).  This has created a clearly defined "triangle breakout" for 10yr US Treasuries on the chart of the converging trends that we've presented on a few occasions:
MBS, on the other hand, are just barely clawing their way back to previous all-time highs.  Considering that they're closer to delivery now than they were when they previously hit all-time highs, the fact that this looks like a challenge for them is very telling:

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
104-20 : +0-11
FNMA 4.0
106-09 : +0-07
FNMA 4.5
107-06 : +0-03
FNMA 5.0
108-11 : +0-02
GNMA 3.5
106-13 : +0-13
GNMA 4.0
109-03 : +0-09
GNMA 4.5
109-23 : +0-05
GNMA 5.0
110-19 : +0-02
104-14 : +0-11
105-29 : +0-06
106-23 : +0-04
107-22 : +0-02
Pricing as of 11:05 AM EST
Morning Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this morning.

10:14AM  :  MBA Announces David H. Stevens to Leave Association
Washington, DC (May 30, 2012)– The Mortgage Bankers Association (MBA) today announced that David H. Stevens, the association’s President and CEO, will be leaving the organization effective June 30, 2012. SunTrust Bank, a long-standing and active member of MBA, has announced that it has hired Stevens to be President of SunTrust Mortgage.

“Dave has been an exceptional leader for MBA,” said MBA Chairman Michael Young. “Although we are sorry to see him leave so soon, he leaves us well-positioned for the future. Dave delivered on his pledge to enhance MBA’s position as the industry’s leading voice in advocacy, policy, education and research and has developed a dynamic infrastructure for addressing member needs.

“His insights and leadership have demonstrated the importance of having one large platform where the entire industry can come together in an effort to provide a common voice on the critical issues of the day.” Young continued. “The MBA, its leadership and members remain steadfast in our focus to bring solutions that will benefit the entire housing market, borrowers and lenders alike.”

“MBA is nearly 100 years old and has gone through many changes. I am confident that our Board of Directors will ensure a smooth transition and select the best possible successor.” said Debra Still, MBA’s Chairman-elect.

Stevens was hired in May, 2011 after leaving his position as Assistant Secretary for Housing and Commissioner of the Federal Housing Administration at the US Department of Housing and Urban Development. Prior to HUD, Stevens held senior executive positions in the real estate and mortgage finance sectors.

Young announced that Chief of Staff and Senior Vice President, Marcia M. Davies, has been designated to be the interim head of the association pending the replacement of Mr. Stevens. A search for a permanent replacement is already underway.
10:12AM  :  SunTrust Names Mortgage Industry Veteran David Stevens to New Role as President
TLANTA, May 30, 2012 /PRNewswire/ -- SunTrust Banks, Inc., (NYSE: STI) announced today that David Stevens, currently President and CEO of the Mortgage Bankers Association (MBA), will join the Company as President of SunTrust Mortgage, Inc., effective July 16, 2012. He will assume responsibility for the day-to-day operations of the business, including sales, production, fulfillment, and mortgage capital markets, and report to SunTrust Mortgage CEO Jerome Lienhard.

Mr. Stevens, 55, will be based in Washington, D.C., and maintain offices in both Washington and Richmond, Va., where SunTrust Mortgage has a significant corporate presence.

"David Stevens is a high-caliber leader, professional and individual," said Mr. Lienhard. "His subject matter knowledge and leadership abilities are well known, as is his tireless commitment to our industry. I am personally delighted to welcome such a well-respected colleague to our business and look forward to the transformational change he will drive."

A graduate of the University of Colorado at Boulder, Mr. Stevens brings more than 25 years of professional experience from the banking, real estate and insurance industries, as well as the public sector. Prior to his role leading the MBA, he was Assistant Secretary and Federal Housing Administration Commissioner at HUD (Housing & Urban Development). Previously, he served as President and Chief Operating Officer of The Long & Foster Companies – the nation's largest privately held real estate company – and Executive Vice President and National Wholesale Manager at Wells Fargo. He began his professional career as a loan officer with World Savings. Source: PR Newswire (http://s.tt/1d0fM)
10:00AM  :  NAR: Pending Home Decline in April but Up Strongly From a Year Ago
"Pending home sales retrenched in April following three consecutive monthly gains, but are notably higher than a year ago, according to the National Association of RealtorsÒ. The Pending Home Sales Index,* a forward-looking indicator based on contract signings, declined 5.5 percent to 95.5 from a downwardly revised 101.1 in March but is 14.4 percent above April 2011 when it was 83.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said a one-month setback in light of many months of gains does not change the fundamentally improving housing market conditions. “Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” he said..."
9:14AM  :  ALERT ISSUED: EU Events Catalyze Big Rally Overnight, Holding For Now
1.674% was the lowest intraday tick seen in 10yr yields back on 9/23/11. Then about half an hour ago we hit 1.673%--record lows within the scope of modern economic history. 10's keep inching into record territory, currently at 1.6628 while Fannie 3.5's are up 9 ticks at 104-19.

10yr yields had declined steadily overnight, helped along by poor auctions in Italy and the ECB's refusal to take part in Spain's bank recapitalization plan. Yields bounced higher around the EU Commission's 7am wire that said the ESM "might be envisaged" as being used to recapitalize banks and that the EZ should move towards a banking union, but the slide was soon back on hitting a very stark technical pivot point just under 1.71.

Even then, Treasuries aren't moving of their own volition, but rather, are simply strapped firmly to EU Benchmarks this morning. MBS are trying to stay caught up, but can't even manage to regain mid-May highs in the low 104-20's. Disconnection... Frustration... But not surprising.

The most recent move down comes after the EU's Ollie Rehn said that the EU was ready to extend Spanish budget deadlines for another year, almost like a groundhog seeing his shadow and reminding lookers-on that there could be x amount of additional weeks of winter. Like we postulated, today looked to be a good day for European headline-watching and so far, that's where we are. Pending Home Sales will be released at 10am Eastern, but that seems like the least of the markets' concerns at the moment.
8:08AM  :  MBA: Mortgage Applications Fall 1.3%
"Mortgage applications decreased 1.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending May 25, 2012. This week’s results do not include an adjustment for early closings on Friday before the Memorial Day holiday.

The Market Composite Index, a measure of mortgage loan application volume, decreased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.6 percent compared with the previous week. The Refinance Index decreased 1.5 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.6 percent from one week earlier. The unadjusted Purchase Index decreased 1.8 percent compared with the previous week and was 3.9 percent lower than the same week one year ago..."
8:07AM  :  MBA: Mortgage Rates Drop to New Survey Lows
"The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.91 percent, the lowest rate in the history of the survey, from 3.93 percent, with points increasing to 0.46 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 4.23 percent from 4.25 percent, with points decreasing to 0.40 from 0.42 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week..."
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Adam Quinones  :  "~20% of orig at the moment"
Jason Wilborn  :  "any liquidity in the 3.0 yet"
Matthew Graham  :  "incidentally, 95.5 isn't out of line with a trend of improvement, just a pull-back from a bullish March reading. I would't take too much offense"
Matt Hodges  :  "that's not what i'm seeing, mg. ton of april contracts written"
Matthew Graham  :  "it's nothing spectacular, but more than it was, still not anywhere close to 3.5's"
Gus Floropoulos  :  "hey MG, hows volume on that 3 buddy"
Adam Quinones  :  "short covering!"
Matthew Graham  :  "there's a tactical component helping push this thing lower in addition to the flight-to-safety / panic bid"
Brent Borcherding  :  "Not looking for "return on investment, but return OF investment.""
Matthew Graham  :  "I think the folks buying at these yields are jumping on the bandwagon trying to force the ECB's hand."
Dean Gorenflo  :  "capital preservation"
Matthew Graham  :  "I have Bunds/Tsys overlaid in Eikon right now as one of my default views and it's like watching synchronized swimming"
Victor Burek  :  "safety"
Gus Floropoulos  :  "why would one buy at these yields?"
Matthew Graham  :  "Bunds just hit 1.298"
Matthew Graham  :  "9/26/11"
Matthew Graham  :  "yes"
Patrick Waldron  :  "1.674 was the "recent" historical low for the 10YR right?"
Jeff Anderson  :  "1.6849! Happy Hump Day!"

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