MBS Live: MBS Afternoon Market Summary
Bond Markets entered the domestic session slightly improved from yesterday's latest levels but soon began giving up those gains. This weakness really didn't let up until the noon hour and was fairly persistent without regard to the economic data. Rather, it seems clear that markets were simply waiting to hear what the president had to say about the fiscal cliff at 1pm. We'd surmised this morning that we might see some weakness in bonds as a hedge against any positive new information. After the short and rather inconsequential speech, bond markets clearly dug their heels in against further losses. Either we've been brilliantly fooled, or the correlation here is fairly over-the-top. Combine that with the fact that volumes were nothing to laugh at today and it's a good bit of confirmation that markets are already eagerly willing to move on the fiscal cliff topic.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.0
105-10 : -0-06
FNMA 3.5
106-22 : -0-06
FNMA 4.0
106-32 : -0-06
FNMA 4.5
107-21 : -0-06
GNMA 3.0
106-26 : -0-08
GNMA 3.5
108-25 : -0-09
GNMA 4.0
109-06 : -0-08
GNMA 4.5
108-06 : -0-06
104-31 : -0-06
106-11 : -0-04
106-16 : -0-06
107-02 : -0-04
Pricing as of 4:07 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 this afternoon.

12:20PM  :  ALERT ISSUED: MBS Hit Lows Of The Day, Continuing Selling Trend Since The Open
Bond markets keep ratcheting to slightly weaker levels and have finally crossed a line that could hearken some reprice risk. Fannie 3.0s are at their lows of the day now at 105-09, down 7 ticks and 10yr yields are up just over 2 bps at 1.6386. Markets are generally "risk-on" as can be seen in the steady gains for equities since the open.

The outright change from rate sheet time doesn't necessarily make negative reprices a "sure thing," but we could see a few of the "early crowd" pull the trigger if current levels persist.
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.

Clayton Sandy  :  "REPRICE: 2:05 PM - Provident Funding Better"
Joe Probst  :  "RM My head is still turning from This report. Others to follow? Can't wait...."
Ross Miller  :  "Joe, just wait til you get the deficieny report!"
Joe Probst  :  "First time I have had to do Call Reports. What a waist of time!!!"
Ira Selwin  :  "REPRICE: 12:53 PM - Wells Fargo Worse"
Ira Selwin  :  "REPRICE: 12:53 PM - Chase Worse"
Jason York  :  "I think wells is in the process of repricing"
Chris Kopec  :  "Dirk.....agreed.....beyond pathetic."
Dirk Postupack  :  "Everbank is horrible w/ HARP programs.....I lost 2 deals totaling $ 475K because of expiring docs etc. tony....4 months in the works and the people canceled"
Matt Hodges  :  "interesting...USBank seems to allow, but defers to Freddie - 20% equity gift"
Dennis Lykins  :  "only FHA allows gift of equity to my knowledge. Freddie used to allow "gift" of funds without borrower 5%, i believe it had to be a 10% gift. "
Matt Hodges  :  "anyone know if Freddie disallows gift of equity on a 2nd home purchase? (related to seller)"
Ken Crute  :  "not heard that one specifically, but hearing quite a few stories where the lender can't clear the loan (at the very end) due to some complications from the MI company or MI policy "
Robin Baran  :  "Anyone runnng into problems with Harp 2 loans and declining MI? Have a file in for 4 months, updated expiring docs, etc, locked and ready to close last Friday but investor said they could not transfer MI since it was declining. They can not provide any guideline changes and this is not addressed on FNMA guides or their own...I called MI company upfront and asked if it was transferable and what factor. No problem then!"
Andrew Horowitz  :  "advanced Charts tab Lynn"
Lynn ONeal  :  "can someone tell me how to chart a longer history on the 3.0 from this chart"
Matt Morrissey  :  "email sent! gonna take 8 months to pay off closing costs... figure if rates drop substantially I can always do it again next year"
Matt Hodges  :  "plus, without congress acting on MI deductibility, you can deduct the higher interest instead"
Matthew Graham  :  "I'd agree. You never know what markets are going to do, but at least you can know you're in good shape with that deal."
Ken Crute  :  "sounds like a solid deal, I would take it"
Matt Hodges  :  "LPMI add on appears very reasonable. I'd be happy and dock your floating boat"
Matt Morrissey  :  "Hi All - thinking about locking today... 3.75% (getting out of fha) on a 30 year refi, 95% ltv, LPMI, 45 day lock"

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