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Do you expect the home buyer tax credit extension to contribute to a noticeable pick up in loan production?

Created By: Adam Quinones
  • Yes, I anticipate an increase in activity (26.7%)
  • Only a modest upturn in production (45.2%)
  • Nope. 2009 demand stole from 2010 demand (28.1%)

Federal Reserve MBS Purchase Program





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MBS OPEN: Jobless Claims Better Than Expected
by Matthew Graham
Posted
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Yesterday's Recap

  • Snowball Selling
  • All Data unfriendly, higher than expected CPI leads the charge
  • lost almost a full point in 4.5's
  • S&P breaks several tech ceilings
  • 10yr backs up BIG TIME to 3.63

The AM So Far

  • Chase Earnings Kill It
  • Jobless Claims in at 522k, continuing claims drop big
  • BUT Buy the rumor sell the truth?  Because MBS and Tsy's have not reacted as you'd expect
  • Dipped initially on the release, but back at 99-12 on 4.5's
  • Even the objective data sources are noting claims are distorted by uncharacteristically low auto industry layoffs

2s vs. 5s: 147bps

2s vs. 10s: 259bps

5s vs. 10s: 112bps

Crude: 60.97

MBS, TSY, LIBOR QUOTES

Data provided by Thomson Reuters
Secondary Marketing Managers and Capital Markets Desks, if you are interested in subscribing to the same fixed income and mortgage market data we use:CLICK HERE.

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mark meisner  |  Contact or Connect with this Member
on
I think people knew JP would kill it due to IBank profits...the BOA numbers will be more interesting tomorrow.
Matthew Graham  |  Contact or Connect with this Member
on
buy the rumor! go sideways on the truth?
mark meisner  |  Contact or Connect with this Member
on
Yep. Then sell the rumor and the truth when Citi reports!
Bobby Downey  |  Contact or Connect with this Member
on
The fact that we can maintain 500,000 plus job losses without the auto industry factor is a little scary...I would think that you can only maintain the 600,000 plus numbers so long due to contraction...the workforce can only contract at that rate for so long before it slows down due to the pool to cut from decreasing....what do you think the numbers will look like here shortly when California furloughs all state employees? Jobs are being lost and not replaced....people are not getting off of unemployment due to finding jobs they are getting forced off due to duration...and the majority of those finding jobs are underemployed compared to their previous position......people will save what they can instead of spending it......walk away from their home when they have to......and life will go on...just a little differently.......or maybe there will be civil unrest and rioting in the streets who knows.....
Christian LeBarton  |  Contact or Connect with this Member
on
MG, is it way off base to worry that the recovery will be built on as little substance as the run up was? Who needs reality when there is rumor, derivatives, and an upper, upper class to keep happy?
Mike King  |  Contact or Connect with this Member
on
Bobby you always seem to inject the common sense that's missing from from various news sources as they skew the truth to sell the news. At least some people are questioning JP Morgans earnings. Even though they killed it on fixed income, their credit defaults are up 30% and their commercial portfolio is starting to take a beating. Anyone remember when Citi posted only a loss of few billion back in the first quarter of 08 and than after the first quarter numbers were out in April they came back and said they messed up and wrote down over an additional 15+ billion dollars in bad loans. Does anyone else think other banks play this same game with the numbers all the time? (rhetorical question)
Edgar  |  Contact or Connect with this Member
on
No market meltdown on CIT news hurts their chances of a last minute bailout. I agree Bobby that 500k job losses is an issue when that does not even include the auto industry job losses. Let's get a nice little rally in MBS going into tomorrow. Viki do your job and tell the world how bad the books are at Citi. Kenny.....just keep talking that is all you need to do to help scare people.
Edgar  |  Contact or Connect with this Member
on
Mike you are right. Mark to Fantasy is in full affect with commercial loans. Jaime D. says their portfolio is fine but regional banks not so fine. Hate to tell you Jaime D., but your portfolio will suffer just as bad. Keep up the 95-100 valuations on these things but we all know it's more like 40-50 on a good day as strip malls, multi family and other commercial loans go bust.
Roger West  |  Contact or Connect with this Member
on
What are other LO's doing in regards to the market. What is the advise right now with this crazy market. We have lost all the momentum that we have had and now we have to climb this mountain again. Float or lock?
Roger West  |  Contact or Connect with this Member
on
What are other LO's doing in regards to the market. What is the advise right now with this crazy market. We have lost all the momentum that we have had and now we have to climb this mountain again. Float or lock?
Rex Whetstone  |  Contact or Connect with this Member
on
Man am I the only one finding it odd that the 10yr is down even with all the better than expected BS out there? Just seems odd to me.
Matthew  |  Contact or Connect with this Member
on
Anyone know why MBS are rallying? I would have thought the bulls would have used Chase & unemployment figures as a reason to rally. Only thing I can think of is treasury holders like the restraint the Fed is showing by not increasing their balance sheet further to bail out CIT. Plus lets face it a CIT failure will have systematic risk, many business depend on CIT
George Chamberlain  |  Contact or Connect with this Member
on
4.5 up 41 bps to 99.63, Can we have a complete reversal from yesterday?? I can not take another ride on the MBS Roller Coaster, I hat vomiting, it discolors the teeth!
George Chamberlain  |  Contact or Connect with this Member
on
Fat fingers this morning, sorry, up 16 bps, not 41
Andrew Russell  |  Contact or Connect with this Member
on
Roger...I went to Vegas to see the UFC fight...every fight I bet on I lost...lost 5k on table games...but heck...got a sick tan...That's what I do in times like these!!! If Michael P took off his skirt we would be in the hamptons at the Neptune beaches with a Vodka/180 in our hands and a glow stick in our hearts...
Jeff Larson  |  Contact or Connect with this Member
on
CITI had no comment on a bottom...hmmm. They did however comment on the commercial impact that is going to hit the markets, look out for this one it won't be pretty. All these BIG banks are reporting good credit card revenue and although taken as a positive, I believe folks are living on their credit cards which never bodes well long term. Auto industry or not have we been immune to astronomical unemployment numbers? Month affter month we are hitting virtually 500K plus. How would the market reacted to a number like that three years ago. 500K and not stopping is a huge number, then you throw in the Auto folks and future state employees, I'd say Bobby and Mike are pretty close in their statements. Mike, rhetorically, you bet they do.
Jason Andrews  |  Contact or Connect with this Member
on
Working in this market is more frustrating than a one legged man in an ass kicking contest.
Jeff Larson  |  Contact or Connect with this Member
on
Oh no, who found Hank Paulson. He who fleeced the American taxpayer.
Andy Pada  |  Contact or Connect with this Member
on
Anyone know if Chase's "blowout" number was a result, in part, to an increase in MSR valuation?
George Chamberlain  |  Contact or Connect with this Member
on
Jason, likewise, it is more frustrating than a one-legged cat trying to bury a turd on a frozen pond!
Andrew Russell  |  Contact or Connect with this Member
on
Jason...It is more frustrating than coming home after a long, frustrating day at the office to see my teacher girlfriend off for the summer...with our new puppy in one hand and a Chardonnay in the other...complaining that I always come home stressed...get a clue woman!!!
George Chamberlain  |  Contact or Connect with this Member
on
Andrew, change your game plan, when you get home, take the puppy for a walk and steal her Chardonnay. That will destress you!
Roger West  |  Contact or Connect with this Member
on
Andrew, This is not a market to gamble in. I am tired of fighting to lose. Andrew, was it a good fight?
Bobby Downey  |  Contact or Connect with this Member
on
Roger the only advice in this market is not to try and look into your crystal ball....let your customers make their decisions and live with them....I wholeheartedly try to lock every person I talk to.....if they don't lock i show them a chart of MBS trading from May to now and let them know they are in for sleepless nights.....the other things is get purchase business....we are seeing an influx of it lately and whether we like it or not that is where the future lies........now I am going to go drink me a Coors Light sine Bud Light don't pay me nothing....heck i might even get on top of my woman tonight....that is for you Andrew!!! It was a good fight and if you bet against Lesnar or GSP you deserve to lose..........both great fighters.....
Michael Cromwell  |  Contact or Connect with this Member
on
Come on guys, Recovery is upon us. Green Shoots are everywhere & people are dancing in the streets. Seriously though, expectations have been set so low for the 2 big boys reporting tomorrow, how can they not meet or beat. I really like how TSY/MBS have reacted today, but the Bulls are just waiting to get set loose again. Anyone think Private $$, gov't brokered:), is in the cards for CIT? Or maybe one of the big banks are gonna swoop in on the cheap. I just think we'll need some real somber news tomorrow to reverse this rally. The reversal will come, it's inevitable. Just got some great pricing on 5/1 FHA again. What's that mean?
Roger West  |  Contact or Connect with this Member
on
Got pricing 5.00% at 98.00 30 YR. up from yesterday at 97.625
Andrew Russell  |  Contact or Connect with this Member
on
George...Damn straight!!! Roger...insane fight...we were there from 3:45pm to 10:30pm pacific time...we must have seen over 10 fights...I was too loaded by the Lesnar fight to fully grasp it but went nuts when he flipped off the crowd... Bobby...I bet Mir the first go around and won a few grand...did the same this time and got smoked...the whole crowd loves GSP...His name was being chanted louder than the Rock in the old WWF...I could have sworn I was in Ontario...I kept screaming "this is America people!!!"
Edgar  |  Contact or Connect with this Member
on
I can't wait for the phone calls about how rates went down rather than up. I guess they decided to leave out Black Wed. part duo: CHICAGO (MarketWatch) -- Rates on fixed-rate mortgages dropped for the third week in a row, according to Freddie Mac's weekly survey of conforming mortgages, released on Thursday. The 30-year fixed-rate mortgage averaged 5.14% for the week ending July 16, down from 5.20% last week and 6.26% a year ago.
Frank Ceizyk  |  Contact or Connect with this Member
on
Matt/AQ--just curious if you've noticed language in media reports about # of modifications that have been OFFERED...does that mean the modifications were completed or just offered to borrowers? Today's Bloomberg has article referencing B of A criticizing complexity--but saying 325,000 modifications have been offered. Asking because I volunteer some time at local housing public service agencies--and they said many of the initial "offers" only save borrowers $10-15/month but add on thousands of dollars of accruing interest when borrowers are told not to make payment until the modification is completed--big difference between "offered" and actually modified isn't there...kind of like saving or creating x number of jobs---it's meaningless, isn't it? Is there someplace that has an actual quantifiable # of "accepted modification offers?".
jeff billups  |  Contact or Connect with this Member
on
Come on Green machine! Not sure who is behind the wheel of this rally but I hope they keep their foot on the gas.
bryan campo  |  Contact or Connect with this Member
on
anyone see my propofol?
Roy Paeth  |  Contact or Connect with this Member
on
Frank i have seen some really crazy modification offers coming thru lately. The Obama plan is not working out as well for many people trying to get modifications, at least here in Illinois.
J. 'Hammer' Helmer  |  Contact or Connect with this Member
on
98% LTV, 531 FICO, been on unemployment for last 3 months..........should I lock or float? hehehehehhe
Glen W. Spencer  |  Contact or Connect with this Member
on
Loan Mods aren't working for borrowers in the most part because the GREEDY banks are charging all kinds of fees, and the terms are not benificail to the borrower. Most borrowers are upside down, struggling to make their payments, or both-and the banks (mostly Bank of America and Wells Fargo) are being FEAR mongers trying to force borrowers into these things. With Making Home Affordable not working as well as intended, Mortgage Servicers not willing to work with borrowers, HVCC, Foreclosure Moratorium lifted, etc, etc. The housing industry is going to see more Foreclosures over the next 6 to 9 months than we have seen in the lat 2 years total. Average depreciation nationwide by Jan 2011 will be above 30%.
Michael Cromwell  |  Contact or Connect with this Member
on
The banks are "offering" modifications, but they're not in line w/ the process detailed in Making Homes Affordable. The DTI guidelines have been completely thrown out the window. All of the modifications offer up a 3 month trial period. After successful completion, they(lender) will come up w/ a new payment that is close to the trial period's. Loss mitigation call centers heat up right before quarters' end. Delay, Delay, Delay. Most of these people are upside down by 125% or more around here. Modifying payments will NOT keep these people from eventually walking. Come up w/ a sensible plan to reduce principal, or foreclose.
J. 'Hammer' Helmer  |  Contact or Connect with this Member
on
Here's a thought - it's called "Consequences to your actions" - WHY SHOULD ANYONE BE ENTITLED TO A LOAN MODIFICATION? Glen W. - you say GREEDY banks - of course they are "greedy" - they are PROFIT organizations. The increase we had in housing was truly a bubble - it was baseless and it is correcting itself - we are going to go down 30% because we went up 40%+...................it might be a rough patch in the housing history, but I think foreclosure should be streamlined, and everyone should get tossed out of the houses they bought that they couldn't afford, or can no longer afford. Let nature take it's course, and lets try to teach our children how to handle money responsibly so we have a strong country and economy in 10 years time again.........
Andrew Russell  |  Contact or Connect with this Member
on
J Hammer...I like your points...It reminds me of the coach's son who he used to play...although the kid struck out all the time or always overthrew first base...if you can't stand the heat get out of the game...
Michael Cromwell  |  Contact or Connect with this Member
on
Hammer, I'm not disagreeing w/ your point. However, the same people that are ultimately going to face foreclosure have payed to bail out the banks. If the people need to learn a lesson, then so do these financial institutions. I don't give a #^*# about their systematic importance. They have good assets along w/ the bad, and stronger players will swoop in to pick up the pieces. Capitalism will correct the problem, if allowed to do so. Unfortunately, that may mean more unemployment, but in my mind it would lead to a more thorough fix to the economy. These banks are hiding behind their political buddies trying to figure out how to remain solvent. I just want to see things get moving. There will not be a truly sustainable recovery w/o a correction in the housing market. We need to get on w/ it.
Jason Andrews  |  Contact or Connect with this Member
on
Mike...sort of like an economic enema? I like that...we should start using that term more often...economic enema.
Michael Cromwell  |  Contact or Connect with this Member
on
Makes me wonder where we'd be if it was flushed a year ago. Ego and legacy need to take a back seat. This will get fixed, someone just needs to show or grow some brass; well never mind.
Glen W. Spencer  |  Contact or Connect with this Member
on
Hammer, yes profit orgnaizations. But when I am referring to GREED, I am taking into account the fact that the banks are modifying the terms of the the consumers loans to a point that the consumer CANNOT make the payment. In March a report came out explaining that a majority of modified loans in 2007 and 2008 were Redefaulting. That is because 86% of the loan modifications during that period of time made the paymet GO UP, not down. Now with the Making Home Affordable guidelines- the banks are following the same routine, but then getting the government funding for modifying the consumer loan. There is no quality control from the government side and the banks are taking advantage of both sides. Furthermore, for the majority of American's that are now at 125% LTV or higher is not their fault. There were many bad and predatory lending practices, home values were skyrocketing, and money was cheap. I guess the alternative for the Average American that makes their payments was to RENT. But becaue they went and bought a house, they are being blamed for the this economy. Also a majority of the people asking to Modify their loans are CURRENT on their mortgage. In this situation, the banks are being GREEDY. They can help a home owner by lowering the interest rate or principal reducing the loan, or take the risk of the borrower walking. And they are using this practice against people that are current. Did anyone see the report that 4 out of 10 loans current in default or deliquent are strategy based. People are becoming late on their mortgage on purpose because the banks are not working with them unless....
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