Dear HUD,

First of all, thanks for dropping annual MI.  That's cool and all, but the way you're rolling this out is causing confusion.  The Mortgagee Letter should have been cued up and ready to go as soon as Obama started talking about this yesterday.  Reason being: no one wants to pull a new case number until they know what's going on.  So yeah... numbers might be a bit low for most of yesterday and all of today.

Sincerely,

Common Sense

As of 1pm, the status of the MIP changes is that annual MIP (paid monthly) is dropping from 135bps to 85bps.  At first, the FHA press release said "for all new FHA-insured mortgages," but now that phrase has been dropped completely.  So we don't exactly know if there will be some limitation as to who can take advantage of this, or if there will be some way for existing case numbers that haven't yet funded to benefit from the change.

As far as markets are concerned, today was boring, yet again.  The broader correction continued in the "flight-to-safety rally that peaked on Tuesday, but MBS had a resilient day specifically.  After opening in weaker territory, they spent the rest of the day grinding back up to yesterday's lows.  Ginnies closed much of their gap with yesterday's panic-driven sell-off. 

NFP tomorrow morning will have an impact, as always, but won't really speak to the bigger picture, and is subject to counterintuitive reactions depending on the inputs from European markets.