While we await FEMA to declare the Yellowstone area a disaster (page down and spend 40 seconds watching the video) is “niches to riches” the new informal slogan of loan officers? LOs are certainly watching how higher interest rates have already impacted American homeownership as rising mortgage rates and house prices reduce buyer affordability. At the other ends of the loan process, making the rounds, which capital markets staff say is causing confusion, via ZeroHedge is a blog post from Louis Barnes at Cherry Creek Mortgage declaring MBS going “no-bid”. While many of us can agree liquidity isn’t what it once was, there are still massive volumes of MBS being transacted upon daily. Bid/ask spreads are certainly not as tight as they once were but we are a far cry from the early days of COVID 19 where some dealers outright refused to trade TBA. In other words, liquidity isn’t what it is in a normal market, and bid/ask spreads are wider, but no one
I recently opened my slang dictionary to the page that defined the origin of, “Different ways to skin a cat” and left it near my cat Myrtle’s water bowl. She didn’t seem interested. Which is fine. Lenders probably interested in that either, instead more intent on programs, pricing, and the general movement of interest rates. The Federal Reserve is interested in global events, and global events have been important to our economy. The war in Ukraine is something that has upset the global commodity picture, while also threatening the global world more broadly. Fed Chair Powell gave us the roadmap last week. “We are raising rates expeditiously to what we have been seeing is a more normal level, which is something that we will reach maybe in the fourth quarter. But it is not a stopping point… Monetary policy works through expectations." There is a growing belief, however, that despite what happens with the overnight Fed Funds rate, 30-year
As we edge toward Easter, which isn’t until April 17 this year, the Dallas Fed has released a report on housing prices… have they become unhinged from fundamentals? Those crafty food scientists have been at work creating Black Jelly Bean Spiced Maple Syrup for creative pancake breakfasts. Some people will tell you that accounting can be creative, but one likes to think that publicly-held companies, with the advantages and disadvantages of being public, are an open book, accounting-wise. For example, Guild Holdings (Mortgage)’s the most recent filing with the Securities and Exchange Commission shows its diversity & inclusion efforts (page 6), senior officer compensation (page 18), and what board members earn (page 20). Guild and nearly every lender have shifted to going after purchase business while at the same time grappling with “work from home” and “work from the office” decisions. Lenders are having refinance teams shiftin
“I don’t always go the extra mile, but when I do, it’s because I missed my exit.” And that extra mile costs more every week. Higher gasoline prices certainly hit service workers and commuters much harder than other segments of the population, namely higher wealth individuals. (Thank you to a reader in Utah who sent, “Breaking News: gas prices are now so high, it is actually cheaper to buy cocaine and run everywhere.” And there’s “Beer is cheaper than gas. Drink, don’t drive.”) Gas prices don’t show much inclination to slow down, unlike residential lending. U.S. lenders issued a record $4.4 trillion in mortgage originations in 2021, topping the previous mark of $4.3 trillion from 2020, so there is almost no place to go but down in 2022. So lenders are laser-focused on production. At the recent SimpleNexus user’s conference, someone told the assembled group that there is a 77 percent higher chance of fund
Today is “National Pizza Day,” a made-up day that wasn’t around when Jimmy Carter was sworn in as president 45 years ago. Back then the yield on the risk-free 10-year T-note was 7.40 percent and 30-year mortgage rates were 8.75 percent. Rates have bumped lower since 1981, but for the first time since August 2019, the 10-year Treasury yield is nearing 2%, reaching 1.95 percent this week. President Carter had housing on his agenda, and after the presidency went on to do Habitat for Humanity work throughout the United States. Recall that Habitat For Humanity came up with its first-ever 3-D printed house. I mention this because many lenders are concentrating on products to help buyers, and finding those buyers. “Rob, is there a database to determine how many purchase money mortgages were recorded in a specific county/area during a certain time period?” Marina Walsh, MBA’s VP of Industry Analysis, and the MBA is a good source, and she recommended,