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Ginnie Mae TBAs Rally With Bonds, Affecting Mortgage REITs
The ten-year bond had a tiny rally, with yields decreasing from 2.32% to 2.31%. Ginnie Mae TBAs rallied as well, rising from 104 10/32 to 104 17/32.
Ginnie Mae and the to-be-announced 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 are where government…
The increase in rates has basically put prepayment worries on the back burner for REITs. The lack of a reaction in the refinance index on the back of a drop in rates could mean we’re finally seeing prepayment burnout. This would be good news for REITs.
The ten-year bond rallied, with yields increasing from 2.34% to 2.3%. Ginnie Mae TBAs followed the trend, rising from 104 12/32 to 104 15/32.
The ten-year bond sold off, with yields increasing from 2.27% to 2.34%. Ginnie Mae TBAs bucked the trend, rising from 104 20/32 to 104 25/32.
The ten-year bond sold off, with yields increasing from 2.19% to 2.27%. Ginnie Mae TBAs followed, dropping from 104 23/32 to 104 20/32.
Fannie Mae and the to-be-announced market When the Federal Reserve talks about buying mortgage-backed securities (or MBS), it’s referring to the to-be-announced (or TBA) market. The TBA market allows loan…
The Refinance Index rose 10% (from 1,348 to 1,502) as rates finally fell enough to allow refinances. Since mid 2013, refinances had been dropping like a stone.
As a general rule, a lack of volatility is good for mortgage REITs and the mortgage REIT ETF, which hedge some interest rate risk. Increasing volatility in interest rates increases the cost of hedging.
The Mortgage Bankers Association’s (or MBA) refinance index fell 0.3% (from 1,297.5 to 1,293) even as the bond market rallied 4 basis points.
The front-month Ginnie Mae TBAs were higher as bonds rallied five basis points. Ginnie Mae TBAs began the week at 105 27/32 and rose to 106 2/32.
Fannie Mae MBS sold off a bit on a weak bond market. The Fannie Mae 4% TBA started the week at 105 17/32 and lost about 5/8 to close at 104 28/32.
The MBA reported that the share of refinance applications decreased to 55.4%. Going forward, home price appreciation will drive refinance activity as previously underwater homeowners eventually get back to positive equity and take advantage of lower rates.
The front-month Ginnie Mae TBAs were bid up as bonds rallied ten basis points. Ginnie Mae TBAs began the week at 106 18/32 and lost up just about 7 ticks to close at 106 11/32.
The Refinance Index rose 11% (from 1,377 to 1,529) even as the bond market sold off on strong economic data. Refinances had been dropping like a stone.
The front-month Ginnie Mae TBAs worked their way higher as bonds rallied on weak economic data. After starting the week at 106 2/32, they picked up about a quarter of a point to finish the week at 106 10/32.
The Refinance Index rose 3.4% (from 1,386 to 1,439) as the bond market rallied on weak economic data. Refinances had been dropping like a stone.
The Home Affordable Refinance Program (or HARP) was instituted in 2009 to allow homeowners with negative equity to take advantage of today’s low interest rate environment.
The front-month Ginnie Mae TBA drifted went nowhere while bonds sold off slightly. After starting the week at 105 27/32, they finished more or less where they started
Refinances have been dropping like a stone, as the people who have home equity have already refinanced and the ones left with high rates are underwater.