CYS Investments Inc
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H.B. Fuller’s Engineering Adhesives Segment Performance in 3Q16
H.B. Fuller’s (FUL) Engineering Adhesives segment, a new operating segment as of 1Q16, reported 3Q16 revenue of $61.4 million, or 11.9% of the company’s total revenue.
FOMC Meeting Looms Large This Week
The FOMC meets on July 26 and 27. Two weeks ago, it was a non-event. The market has been raising its estimates for the federal funds rate by the end of 2016.
Why Were CSAL and CYS the Bottom REIT Performers in Mid-July?
Recently, on June 29, 2015, CSAL’s stock price fell by 7%. The move came with pretty good selling volume.
The FHFA House Price Index is within 5% of its peak
While most indices showed the housing market bottoming out around February 2012, the FHFA House Price Index showed it bottoming out around May 2011.
The Fed maintains its policy on reinvesting QE assets
The Fed’s decision to reinvest QE assets in the markets affects REITs. It keeps a bid under TBAs, and it supports MBS values in general.
Why State Laws Matter For Home Price Appreciation
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.
Quantitative Easing Is Over, But What About The Fed Balance Sheet?
The “elephant in the room” at the Fed is that rates need to return to more normal historical levels at some point. This will be in the context of a massive Fed balance sheet. This creates issues on many different levels.
Are lower rates enough to trigger another refinance wave?
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.
Why state laws matter to nonagency REITs
Real estate prices are a bigger driver of nonagency real estate investment trusts. Rising real estate prices also help reduce stress on the financial system.
Why you should think about the direction of interest rates
Mortgage REIT investors have finally gotten a taste of what interest rate risk looks like over the past year. For most of the past 30 years, bonds have been a one-way bet.
Mark-to-market losses force CYS Investments to cut its dividend
This also means a REIT will experience a volatile dividend. Most corporations loathe cutting their dividend because of the message it sends to Wall Street, so volatile dividends are generally rare. For REITs, they’re a fact of life.
CYS Investments: An important mid-sized agency mortgage REIT
CYS Investments (CYS) is a diversified agency mortgage REIT that invests all across the agency mortgage-backed security (or MBS) space.
Why state foreclosure laws matter for REITs like CYS Investments
The states with the biggest foreclosure inventory are the states with judicial foreclosure processes—New York, New Jersey, and Florida.
Refinance applications fall in spite of lower rates
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.
Why state foreclosure laws affect home price appreciation
In the judicial states—particularly New York, New Jersey, and Connecticut—we’re seeing much lower home price appreciation— in fact, there’s very little residential construction at all
Why you should pay attention to the long interest rate cycle
Mortgage REIT investors have finally received a taste of what interest rate risk looks like over the past year. For most of the past 30 years, bonds have been a one-way bet.
Why CYS Investments maintained its dividend in 2nd quarter 2014
Most corporations loathe cutting their dividend because of the message it sends to Wall Street, so volatile dividends are generally rare. For REITs, they’re a fact of life.
Why CYS Investments maintained its leverage ratio in Q2 2014
Because there’s no risk of principal loss—not to be confused with mark-to-market issues—the rate of return for mortgage-backed securities is generally low.
Mortgage delinquencies are still concentrated in judicial states
Borrower behavior is heavily influenced by consumer protection laws, particularly at the state level. States that have a judicial review of foreclosure activity tend to have higher delinquency rates.
Why the HARP refis dry up as rates rise, lowering prepay speeds
HARP was designed to help people who wanted to stay in their home and who had adjustable-rate mortgages where they wouldn’t be able to afford the payment once the mortgage adjusted upward.
Refinances fall as prepayment risk is much lower than 1 year ago
The Refinance Index fell 3% (from 1,598 to 1,548), as rates rose 15 basis points. Refinances have been dropping like a stone.
HARP refinances drop off as interest rates for mortgages increase
HARP refinances fell to 30,000 in December from 38,700 in November.
Case-Shiller index is still posting double-digit annual increases
The Case-Shiller index is the most widely quoted index of real estate values. Real estate values are big drivers of consumer confidence and spending.
FHFA House Price index is within 9% of April 2005’s peak levels
The 7.6% year-over-year gain was the second highest since mid-2006, and it puts the index back at April 2005 levels. The rate of price appreciation appears to be slowing.
Will Mel Watt save the day for originators as refinances rise?
The Refinance Index rose 2% (from 1,602 to 1,635), even though rates were up 10 basis points. The bond market has been readjusting.
Case-Shiller’s biggest gain in 8 years is good for non-agency REITs
The index increased 1.03% month-over-month and 13.3% year-over-year. Prices have risen the most in the areas that were hit the hardest.
The Mortgage Bankers Association Refinance Index turns down again
The Refinance Index fell 6.5% (from 2,76 to 1,941) even though rates fell. But the week was shortened by the Veteran’s Day holiday.
Why smart prepayment analysis means higher dividends
Refinancing activity affects prepayment speeds, which are a critical driver of mortgage REIT returns.
Prepayment burnout? Refinance activity falls despite drop in rates
The MBA Refinance Index increases again after the Fed maintained its pace of QE (quantitative easing) The Refinance Index fell 1.3% (from 2,061 from 2,034) in spite of the bond market rally on the back of a solution to the shutdown. The bond market has been readjusting to the idea that we may see the […]
Refinances increase as interest rates fall after the Fed surprise
The MBA Refinance Index increases again after the Fed maintains its pace of QE (quantitative easing) The Refinance Index rose 3% (to 1,947 from 1,889) after the Fed decided to maintain its current pace of asset purchases. The bond market has been re-adjusting to the idea that we may see the end of quantitative easing soon, and […]
FHFA Home Price Index rises in June, good for non-agency REITs
The Federal Housing Finance Agency (FHFA) House Price Index The FHFA House Price Index differs from the other house price indices like Case-Shiller and Radar Logic in that it only looks at houses with mortgages guaranteed by Fannie Mae and Freddie Mac. This means all the home prices are below the conforming threshold, which is $417,000. It […]
HARP refinances fall in Q2 as rates increase, effect on REITs
The Home Affordable Refinance Program permits homeowners with negative equity in their homes to refinance at today’s lower rates The Home Affordable Refinance Program was instituted in 2009 to allow homeowners with negative equity to take advantage of today’s low interest rate environment. Before HARP, banks wouldn’t lend more than the home’s value. In real-estate […]
Weekly mortgage applications review (Part 4)
Back to Part 3 The MBA Refinance Index falls for the eighth straight week The Refinance Index fell to 0.1% (to 2,247 from 2,245) in the context of a volatile week in the bond market. The bond market has been re-adjusting to the idea that we may see the end of quantitative easing in fall. That said, […]
The Fed’s Humphrey-Hawkins testimony and its implications for REITs (Part 3)
Back to Part 2 The Fed’s comments on monetary policy The Fed received a number of complaints regarding the move in interest rates over the past couple of months. Many members of Congress were alarmed at the increase in rates, and many worried that it would dampen the recovery. Bernanke referred to the June comments […]
MBA Refinance index falls; prepayment worries fade into the background
The MBA Refinance Index is an important index that forecasts mortgage activity and prepayments The Mortgage Bankers Association (MBA) Index of Refinance Activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
Mortgage Bankers Association Refinance Index falls, REITs prepayment worries fade
The MBA Refinance Index is an important index that forecasts mortgage activity and prepayments The Mortgage Bankers Association (MBA) Index of Refinance Activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
April Federal Housing Finance Agency House Price Index rose 7.4%, good for investors
The Federal Housing Finance Agency (FHFA) House Price Index The FHFA House Price Index differs from the other house price indices like Case-Schiller and Radar Logic in that it only looks at houses with mortgages guaranteed by Fannie Mae and Freddie Mac. This means all the home prices are below the conforming threshold, which is $417,000. […]
Why REITs may suffer as the MBA Refinance Index falls even as mortgage rates fall
The MBA Refinance Index is an important index that forecasts mortgage activity and prepayments The Mortgage Bankers Association (MBA) Index of Refinance Activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
Refinances tick up as bond market sell-off takes a breather
The MBA Refinance Index is an important index to forecast mortgage activity and prepayments The Mortgage Bankers Association (MBA) Index of Refinance Activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
MBA Refinance Index continues to fall
The MBA Refinance Index is an important index to forecast mortgage activity and prepayments The Mortgage Bankers Association (MBA) Index of Refinance Activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
S&P/Case-Shiller Home Price Index rises in March
The Standard and Poor’s/Case-Shiller index of real estate prices increased 10.9% year-over-year in March, hinting that the real estate market bottomed around this time last year. The Case-Shiller index The Case-Shiller index is the most widely quoted index of real estate values. Real estate values are big drivers of consumer confidence and spending, and, therefore, […]
Mortgage Bankers Association Refinance Index falls 8% in the week ending May 10
The MBA Refinance Index is an important index to forecast mortgage activity and prepayments The Mortgage Bankers Association (MBA) index of refinance activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]
Mortgage Bankers Association Refi Index rises in the week ending May 3
The MBA Refinance Index is an important index to forecast mortgage activity and prepayments The Mortgage Bankers Association (MBA) index of refinance activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market […]