MBS Live: MBS Afternoon Market Summary
Monthly settlement for Class A MBS (Fannie/Freddie 30yr Fixed coupons) and nothing major on the calendar to coax participants back into the fray on the day back from a 3 day vacation.... Brutal!  The soon-to-be-retired crop of October coupons got exceptionally choppy late in the session and thin trading conditions left the November coupons looking for a bid as well.  Bond markets followed stocks earlier in the day on a lack of any meaty headlines or data, but the announcement that world's biggest mortgage lender (Wells) is being sued by the USAG probably didn't help encourage a risk-friendly environment in the afternoon.  Fannie 3.0s are cruising out just slightly in the green technically, but will soon fall 7-8 ticks thanks to the roll.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
106-22 : -0-05
FNMA 4.0
107-10 : -0-03
FNMA 4.5
108-02 : -0-03
FNMA 5.0
108-29 : -0-01
GNMA 3.5
109-01 : -0-05
GNMA 4.0
109-15 : -0-04
GNMA 4.5
109-08 : -0-05
GNMA 5.0
109-26 : -0-02
FHLMC 3.5
106-14 : -0-09
FHLMC 4.0
106-31 : -0-05
FHLMC 4.5
107-11 : -0-01
FHLMC 5.0
108-04 : +0-01
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.

2:06PM  :  ALERT ISSUED: Roll-Related Volatility Leading MBS Lower. Reprice Outlook Uncertain
Today is "48 hour" day for Fannie and Freddie 30yr Fixed MBS. So this afternoon will be the last time that October coupons will underlie MBS prices and marks the time when we shift to view November vintages. This will also give the appearance of a rather large price drop, unlike the price drop we just got this afternoon, which is, in fact, quite real.

Fannie 3.0s dropped from 105-07 to 105-04 in one trade. Bigger picture and longer term, this doesn't much bother us as illiquidity and volatility surrounding the roll is pretty standard. But short term, it makes for a somewhat uncertain reprice risk environment and we can't rule out the possibility that some lenders may still reprice based on this drop even though November coupons haven't experienced the same drop.

To be clear, markets have largely moved on to November coupons (as far as Fannie/Freddie 30yrs are concerned) and most lenders should be considering that when it comes to determining rate sheets at the moment, but technically "the most current pricing" is still on October coupons and even though it wouldn't make logical sense for a lender to reprice negatively on this meaningless illiquidity, we're giving you the heads up just the same.
1:26PM  :  MBS Continue In Narrow Range; Another Uneventful 3yr Auction
We haven't been shy about the claim that 2 and 3yr Treasury Auctions no longer matter for the longer end of the yield curve (like 10yr Notes) and Production MBS (like Fannie 3.0s). This has been the case for quite some time and was amply solidified after the Fed began using calendar date guidance in the FOMC Announcements. So ongoing coverage of 2-3yr auctions with respect to production MBS is more of an exercise in habit and continuity than an important market-moving event.

Today is no exception. In fact, if any recent 3yr auction stood a chance to have an impact, today's would probably be among the top contenders. It was an incredibly strong auction yet has produced nothing by way of market reaction.

This merely adds to a rather uneventful session for MBS as Fannie 3.0s continue to hold just at or above 10am levels--currently up 7 ticks at 105-09. 10yr yields are 2.75bps lower on the day at 1.7045 and have flatlined in the past hour and a half.
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.

Steve Chizmadia  :  "REPRICE: 3:59 PM - Pinnacle Worse"
Victor Burek  :  "•U.S. FILES CIVIL MORTGAGE FRAUD SUIT AGAINST WELLS FARGO •U.S. CLAIMS WELLS FARGO FALSELY CERTIFIED FHA LOANS •GOVERNMENT SEEKS DAMAGES AND PENALTIES FOR RECKLESS LOANS •FHA FORCED TO PAY `HUNDREDS OF MILLIONS' FOR DEFAULTED LOANS"
Steve Chizmadia  :  "Pinnacle is in the middle of a reprice. Guessing for the worse. Will comfirm shortly"
Rob Clark  :  "REPRICE: 3:38 PM - Provident Funding Worse"
Matthew Graham  :  "here's the article: http://hereisthecity.com/2012/10/09/imf-warns-of-fresh-global-crisis-unless-eurozone-finds-a-fix/"
Scott Rieke  :  "missed that one"
Matthew Graham  :  "after all the ups and downs of the past few months, I thought the IMF's statement last night was really ironic. "
Ted Rood  :  "EU leaders back idea of lunch, can't agree on entrees, however."
Matthew Graham  :  "it's really getting comical"
Scott Rieke  :  "promise of a promise"
Matthew Graham  :  "RTRS- EU LEADERS TO BACK IDEA OF CONTRACTUAL AGREEMENTS BY EURO ZONE COUNTRIES TO IMPLEMENT REFORMS -DRAFT EU SUMMIT CONCLUSIONS "
Matthew Graham  :  "RTRS- EU LEADERS TO ENDORSE IDEA OF EURO ZONE BUDGET, WHICH WOULD BE SEPARATE FROM THE LONG-TERM EU BUDGET-DRAFT SUMMIT CONCLUSIONS "

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