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.


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.

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
102-06 : -0-04
FNMA 3.5
104-31 : -0-02
FNMA 4.0
106-32 : +0-00
2 YR
0.6050 : -0.0120
10 YR
2.0110 : +0.0420
30 YR
2.5910 : +0.0590
Pricing as of 1/8/15 4:12PMEST

Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:50AM  :  Bond Markets on the Back Foot, but Still Resilient

MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Bob Van Gilder  :  ".125-.25"
Kenneth Crute  :  "not dramatically but about ,375 "
Michael Higgins  :  "anyone's pricing get dramatically worse today from yest?"
John Sheadel  :  "Hopefully there's some form of "recent FHA loan help" for those who just got it and now feel cheated. Like when Jeep came out with the 4-door and allowed all those who got 2-doors less than a year ago to swap them out for the cost of construction difference. "
Matt Hodges  :  "can't order an appraisal until you have a case number, and no one will want to order a case number until reduced MIP is in place"
Bryce Schetselaar  :  "he has only mentioned "buyers" up to this point"
Ira Selwin  :  "now just says "FHA will publish a mortgagee letter detailing its new pricing structure shortly.""
Ira Selwin  :  "The release was changed"
Ira Selwin  :  "regarding that endorsement line"