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Mortgage Rates End Week on Three Day Skid. Fed Rate Hike Not to Blame

Posted To: Mortgage Rate Watch

All I can say about yesterday is that it was an UGLY UUUGLY day for interest rate watchers. Mortgage rates were pressured higher right out of the gate following a warmer than expected read on producer level price inflation. And then, to make matters worse, as the day progressed, benchmark rates drifted even higher, this forced prices of mortgage-backed securities progressively lower. By the end of the day all lenders had repriced for the worse, some even did so more than once! Following two action packed days of economic data, today was a little quieter, we only had one data release. The Bureau of Labor Statistics this morning released the Consumer Price Index. This index measures the price change of a fixed basket of goods and services purchased by consumers, also known as inflation, the enemy...(read more)

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Mortgage Rates on Two Day Losing Streak. Lock Bias Stands

Posted To: Mortgage Rate Watch

Mortgage rates moved higher yesterday morning...and then they moved even higher yesterday afternoon! The day began with mortgage-backed securities prices moving lower, which forced lenders to increase consumer borrowing costs before many rate watchers had a chance to get to a computer. Later in the day, after the Fed released the minutes of the most recent FOMC meeting, MBS prices fell further, which brought on reprices for the worse and pushed mortgage rates up a few more basis points. To remind readers, as prices of mortgage-backed securities move higher, lenders are able to offer lower mortgage rates, however as prices decline, they are forced to raise borrowing costs. Like yesterday, we had another busy day of data today. This morning we received the Weekly Jobless Claims report. Recent...(read more)

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Mortgage Operation Financial Statements: The Roadmap to Profitability

Posted To: The Garrett Watts Report

It is important to have a map or GPS when taking a trip. Without guidance, the journey may take much longer and travel costs could unexpectedly grow. This concept applies to mortgage bankers as well. Managers need a plan to navigate the market's landscape, without one costs can unexpectedly rise and profitability can suffer. We recently launched a new product for our customers. It is called Management Advisory Program, or MAP as we refer to it. The program is intended to increase mortgage ops revenues, control costs and better manage risk. A key component of the program is a monthly comparison of a company’s financial results and key metrics with the financial results and metrics of other participants in the program. Most of the participants originate under $100M per month and produce...(read more)

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Recasting the Housing Finance Industry is a Three Step Process: Reform, Reorganize, Reassure

Posted To: Voice of Housing

In a recent Voice of Housing post , I lamented the fact that there seems to be shockingly little public debate underway concerning the future of the US Housing Finance Industry. I ended that post with the question ... in the industry's future form, is there any role left for the GSEs, Fannie Mae and Freddie Mac ? Intellectual honesty demands that I offer my answers to these questions in the hope that those answers serve as a catalyst for additional public discourse on this important topic. The US Housing Finance Industry is like a stool with 3 legs. One of those legs is the "government"-sector leg existing primarily through FHA and Ginnie Mae; the second leg is the "private"-sector leg and functions through large diversified financial institutions such as Bank of America...(read more)

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Lenders Reprice for Worse. Mortgage Rates Move Higher

Posted To: Mortgage Rate Watch

Mortgage rates moved slightly lower yesterday as the interest rate market made modest improvements in the second half of the trading session. This allowed many lenders to reprice for the better at the end of the day. Both stocks and bonds rallied yesterday, this is not a normal occurrence. Typically when one market is rallying, the other suffers. For example if the stock market is moving higher, market participants sell less risky assets, such as benchmark Treasuries and agency mortgage-backed securities, to finance the purchase of higher yielding stocks. This generally results in higher Treasury yields, lower MBS prices, and an uptick in mortgage rates...that wasn’t the case yesterday as both the fixed income sector and the stock market rallied. Lots of economic data hit news wires today...(read more)

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