MBS Live: MBS Afternoon Market Summary
Bond markets were treated to  a surprise guest this afternoon as "MBS outperformance" returned after being absent for nearly a month.  In other words, MBS lost less ground than Treasuries, and the magnitude of that outperformance was as big as it has been in several weeks.  Granted, one of the biggest reasons for this is the sheer violence of the underperformance that we've seen over the past two weeks, but MBS were also willing to step back from the brink after the weaker ISM data. 

Indeed, heading into the ISM data, there was no outperformance.  The strong ADP numbers in the morning had MBS clearly counting the hours left of full-fledged QE.  ISM looked like it provided a small glimmer of hope.  More appropriately, ISM gave Treasuries what they needed to continue holding the supportive ceiling under 2.85% in 10yr yields and MBS took solace in that stability. 

Any way you slice it, ADP data hurt, technicals and ISM helped.  New Home Sales was 'suspect' due to revisions, and MBS turned a half point loss into just over a quarter of a point by day's end.  Don't expect that to be reflected in most rate sheets though.  Those are still .375-.625 weaker for the most part.
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
95-16 : -0-11
FNMA 3.5
99-30 : -0-09
FNMA 4.0
103-17 : -0-10
FNMA 4.5
106-10 : -0-03
GNMA 3.0
96-19 : -0-12
GNMA 3.5
101-02 : -0-11
GNMA 4.0
104-12 : -0-13
GNMA 4.5
107-01 : -0-04
95-02 : -0-10
99-22 : -0-10
103-07 : -0-08
106-04 : -0-03
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 this afternoon.

3:38PM  :  Drifting Sideways, Holding Near Highs After Hours
Fannie 4.0s are right in line with the prices seen immediately following this morning's weaker-than-expected ISM data (103-16). They've held between there and 103-13 ever since. If anything, they're erring toward the highs as we work our way through after hours for bond markets (3pm-5pm).

That strength is more a factor of their relative outperformance of a more decidedly flat/neutral Treasury complex. 10's aren't nearly as close to their best post-10am levels. In other words, after nearly two weeks of MBS getting trounced by Treasuries, we have a bit of a correction over the past 5 and a half hours. Not much else to it, and certainly nothing significant, though the stability has afforded a few lenders the opportunity to reprice positively.
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.

Ira Selwin  :  "They did hold their head up JA"
Ted Rood  :  "QM highlight for correspondents: Lo comp not counted against 3% fee cap UNLESS loan is brokered out, then LO comp is included."
Steve Chizmadia  :  "The 6% limitation also includes property seller payment for permanent and temporary interest rate buydowns and other payment supplements, mortgage payment protection insurance, and payment of UFMIP."
Steve Chizmadia  :  "Contributions exceeding 6% of the sales price or exceeding the actual cost of prepaid expenses, discount points and other financing concessions will be treated as inducements to purchase, thereby reducing the amount of the mortgage."
Steve Chizmadia  :  "1st time buyer and Fico should not impact max allowable concessions Ron. "
Ron Newsome  :  "Gents what is the max sellers or lender credit I can possibly give for a combat related disability and a FICO of 623. Also first time home buyer"
David Rudnick  :  "QM breakdown- Only lend money to people who can proved they dont need it"
Ira Selwin  :  "It's just such a long topic - there are really no short points. In addition, investors/lenders may have overlays to the new rules"
David Rudnick  :  "did I just freeze the forum.... only thing that sticks out to me is 3%.... although Im sure there are 500 pages to that book!"
Jason Anker  :  "thats a big question, too big for the space provided here"
David Rudnick  :  "refresh my memory someone pleas... besides getting jacked on broker comp. what qualification changes should we expect with QM?"
Matthew Graham  :  "It's largely an interdependent relationship DL. Treasuries give the best sense of overall market sentiment toward rates, but MBS diverge over shorter time frames. It's sort of like Treasuries are planet Earth and MBS are the moon. If you step far enough back, they're moving in the same orbit around the sun, but if you get close enough, you can see MBS moving to either side of Treasuries periodically."
David Lurvey  :  "Being new to watching these correlations...who is generally the leader?"
Matthew Graham  :  "I posted one in The Day Ahead this morning: http://www.mortgagenewsdaily.com/mortgage_rates/blog/334234.aspx"
David Lurvey  :  "MG do you have a chart that shows 10YR vs. MBS?"

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