MBS Live: MBS Afternoon Market Summary
MBS and Treasuries are both near their best levels after a day that has
been almost exclusively positive thanks to the flight-to-safety associated with the situation in Syria. Bond markets are obviously participating in this momentum now, but have been reluctant to do so relative to equities as well as their own technical levels. Importantly, 10yr yields stalled out
right at the 5yr moving average highlighted in this morning's commentary.
Despite that resistance and despite some underperformance in mortgages today, MBS managed another 3/8ths point rally (or close to it at 11/32nds currently). Positive reprice
potential has been on the table most of the day.
Food for thought if you get the reprice you're looking for: this is the strongest 4-day winning streak for MBS since mid 2012 and benchmarks just entered "zone 1" ("good tactical locking range from this chart.
This could certainly keep going, but it's highly dependent on headline risk and tomorrow's data. Markets are thin (despite the heady nature of the headlines) and easily pushed around if momentum shifts.
Food for thought if you get the reprice you're looking for: this is the strongest 4-day winning streak for MBS since mid 2012 and benchmarks just entered "zone 1" ("good tactical locking range from this chart.
This could certainly keep going, but it's highly dependent on headline risk and tomorrow's data. Markets are thin (despite the heady nature of the headlines) and easily pushed around if momentum shifts.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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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.
1:19PM :
Treasuries Prodding Best Levels, MBS Follow; Positive Reprices
10yr yields are currently trading below the 2.75 floor by enough to matter following the 2yr auction, though not because of it. The move was underway since 12:30pm and is now picking up some steam as 10's move back to 2.73--their lowest yield in nearly 2 weeks.
MBS are casually shadowing the casual move with Fannie 4.0s up 8 ticks at 103-14. "Casual" is a reference to volumes, which are exceptionally light given the ostensible drama of global headlines as well as the "best in two weeks" designation on prices.
That low volume decreases the rolling resistance for snowball buying, and that's what we have. Whereas the path of least resistance was to "sell sell sell" over the past 2 weeks, momentum is heading in the other direction thanks to Syria headlines and average-to-negative economic data.
Essentially, there's a slight wind at our backs and no major obstacles from data or auctions. So we head into fairer seas for now. One positive reprice is already in. More may follow.
MBS are casually shadowing the casual move with Fannie 4.0s up 8 ticks at 103-14. "Casual" is a reference to volumes, which are exceptionally light given the ostensible drama of global headlines as well as the "best in two weeks" designation on prices.
That low volume decreases the rolling resistance for snowball buying, and that's what we have. Whereas the path of least resistance was to "sell sell sell" over the past 2 weeks, momentum is heading in the other direction thanks to Syria headlines and average-to-negative economic data.
Essentially, there's a slight wind at our backs and no major obstacles from data or auctions. So we head into fairer seas for now. One positive reprice is already in. More may follow.
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.
Matthew Carver : "REPRICE: 2:53 PM - Flagstar Better"
Andy Pada : "geez, it never ends."
Matthew Graham : "RTRS- US DEMANDS JPMORGAN JPM.N PAY OVER $6 BLN TO SETTLE ALLEGATIONS CO MISSOLD SECURITIES TO GOVT-BACKED MORTGAGE COS IN RUN-UP TO FINANCIAL CRISIS- FT "
Tom Schwab : "REPRICE: 2:38 PM - Franklin American Better"
Matthew Carver : "REPRICE: 2:37 PM - Sierra Pacific Better"
Hamid Hamrah : "REPRICE: 2:29 PM - PennyMac Better"
Rob Clark : "REPRICE: 1:06 PM - Provident Funding Better"
Jason Northcutt NMLS#994555 : "Non program rate realted..but why do people in our industry have no clue how to read? A supposed mortgage marketing guru posted the yesterday how 2300 Loan Officers were layed off from Wells. When I questioned this person they pointed to an article where they read it...I read it and no where did it say 2300 LOs were layed off. I know no one ever wants to lose a deal to another LO but spreading this does nothing but hurt all of us as people and Realtors panic about loans they may have in proce"
Matt Hodges : "https://www.fanniemae.com/content/release_notes/du-do-release-notes-11162013.pdf"
Steve Chizmadia : "5% required"
Ted Rood : "Program eliminated."
Joe Ridings : "Vic what happens in Nov to fannie 97?"
Andrew Haynes : "Could this new geopolitical risk slightly off-set the taper talk? "
Dio Vannucci : "We are working with some buyers and the sellers came to them and told them that their lender for the new home they're purchasing was requiring our buyers to use them and the real estate contract must say that. Have you guys ever heard of that?"
Justin Harward : "the builder says they're already losing money on our house due to an inability to budget properly. In fact our sales guy told me that he was instructed by the owner (medium size buider) to not sell any more homes on our street because they have 5 going on right now and he's losing money on all of them,."
BVG : "Sounds like your builder missed the contract date- not Lender's fault. Tell builder you're canceling for breach unless they pick up any and all extension costs."
Clayton Sandy : "If they do a lot of business, they should be mandatory. My old CU I worked for is Mandatory. Actually had a deal similar to this one. Had a rate at 3.75% locked for 60 and then had to extend it. Couldn't get the deal done conventionally (appraisal issue) so they just did an ARM at the same rate and were able to cancel the hedge. Way cheaper to do it that way"
Clayton Sandy : "It's all about costs. They've been hedging that lock for some time and now the market has moved so much they choose not extend that lock. Will cost them less to cancel the lock than to deliver the 3.75% rate. "
Matt Hodges : "who cares...it's not like the CU is losing any money on an extension"
Jason Anker : "in their minds I'm sure it was due to the market not the borrower"
Justin Harward : "it's not the lack of the lock extension policytt jason, it's that they extend the lock for some customers but not others"
Timothy Baron : "The builder should step up and pay for the exytension."
Justin Harward : "I could not believe what I heard "Well, if you're going to file a complaint, I need to protect thje interest of the bank and I will send the file back and have them relook at it to see if they can turn it down""
Jason Anker : "lack of a lock ext polcy is not a violation"
Matt Hodges : "idk, justin...but it opens the door for disparate treatment of different borrowers"
Justin Harward : "No, local credit union. Sorry, this is my loan. Basically 3.75% expires 9/1 -- the builder delayed, won't be completed until 9/13 -- lender won't extend 3.75% even for a cost, wants to put it at 4.375%"
Justin Harward : "They offered to allow the borrower to buy down 3 points to the original rate. Or take a rate 6/8 higher vs the locked one. Borrower requested a 12 day extension due to builder delays"
Justin Harward : "Question for the group. Does this sound like a fair lending violation? Lender does not have an offical lock extension policy. Lock expires, you go to the new rate. BUT they do regularly extend locks by 2 weeks for some customers but not others. The lender says its because rates have increasedd so much."
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