But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Are We Getting Close To Another Refi Wave?
The MBA reported that the share of refinance applications increased to 66.4%. This caught many by surprise, but it could be a pleasant surprise for the originators.
The easy money from the 2012 refinance wave has been made. Now, originators must focus on the purchase business, which is a more difficult area.
Mortgage rates spent most of the summer stuck around 4.25% and only recently acknowledged the strong bond market rally. The pattern of lagging the bond market seems to be continuing.
In March 2013, the Fed was forecasting that 2015 inflation would be ~1.5%–2%. By the December 2014 meeting, it decreased that number to 1%–1.6%.
At the March 2013 meeting, the Fed was forecasting that 2015 unemployment would be 6.7%–7%. Now, the Fed is forecasting that unemployment will be 5.2%–5.3%.
Yesterday, the Federal Reserve ended its September FOMC meeting. It changed its language regarding interest rate normalization going forward.
Ginnie Mae and the to-be-announced (or TBA) market The Fannie Mae to-be-announced (or TBA) market represents the usual conforming loan, the plain Fannie Mae 30-year mortgage. Meanwhile, Ginnie Mae TBAs…
The Fannie Mae 3.5% TBA started the week at 103 14/32 and picked up 29 ticks to close at 104 11/32. Market participants may also be forecasting less volatility in interest rates.
The ten-year bond yield is the basis for long-term interest rates The ten-year bond influences everything from mortgage rates to corporate debt. It’s now the benchmark for long-term US interest…
The share of refinance applications increased to 63.9%. This bond market rally has caught many by surprise, but it could be a pleasant surprise for the originators, who have had a horrendous year.
Since the bubble burst, mortgage origination has been almost exclusively government-driven. The US government bears 50% of the credit risk of the entire US mortgage market.
This series breaks down the different indices and helps you learn what insights you can glean from them. Mortgage banking has become a lot more competitive as rates have increased.
On January 1, the new qualified mortgage rule took effect. This rule gives the originator safe harbor from being sued by the borrower if they default, provided that certain requirements are met.
Borrower behavior is heavily influenced by consumer protection laws—particularly at the state level. States that require a judicial review of foreclosure activity tend to have higher delinquency rates.
In general, mortgage delinquencies fell to 5.4% due to home price improvements and clearing foreclosure pipelines. The normal level before the housing bubble was between 4% and 5%.
Employment costs increased 0.7% in the quarter ended September 30, 2014. This was the same as the June quarter.
Average hourly earnings increased 0.4% on a month-over-month basis and increased 2.1% year-over-year to $24.66 an hour. Average weekly hours were flat at 34.5.
The unemployment rate has been falling, so why doesn’t the average citizen feel better about the economy? The reason is the labor force participation rate remained unchanged at 62.8% in November.
The unemployment rate was unchanged at 5.8% in November, and the underemployment rate decreased to 11.4%, from 11.5%.
The ten-year bond had a big sell-off, with yields decreasing from 2.16% to 2.34%. Ginnie Mae TBAs fell as well, dropping from 104 19/32 to 104 7/32.