Nationstar Mortgage Holdings Inc

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market started when it pushed rates lower to allow people to refinance.

Mortgage refinance applications, as measured by the MBA Refinance Index, rose 16.7% from 1,693 to 1,902 for the week ending August 28.

Mortgage originators have had a difficult time over the past year, as rates have begun rising. The increase in interest rates pretty much stopped the refinance boom in its tracks.

The jobs report should have gone out last Friday. But the BLS decided to postpone it until this Friday, May 8. Unless the report is unusually good, the bond market will probably take it in stride.

This week will have a lot of valuable data for real estate investors. We have some important earnings this week too.

The shape of the yield curve matters almost as much as the absolute level of interest rates to financial companies As a general rule, financial companies (banks, REITs) borrow short and lend long. What this means is that they lever their balance sheet by borrowing at short-term interest rates and generally invest in longer-maturity assets, […]

Interest rates fell sharply across the board as the Fed voted to maintain its current rate of asset purchases. The market was betting heavily that the Fed would begin to reduce purchases.

Regulatory risks One of the other big risks for holders of mortgage servicing rights (MSRs) is the Consumer Financial Protection Bureau (CFPB). While the servicer’s job is to look out for the bondholders, the regulators are tasked with looking after the borrower. First, one of a servicer’s jobs is dealing with the borrower once a […]

Radar Logic futures can be used to forecast real estate prices Most people are unaware that there is a futures market for U.S. real estate prices.  The Radar Logic futures contract launched about a year ago on the CBOE Futures Exchange. While they are not especially liquid, they do provide an insight into what the market […]

Mortgage servicing rights are one of the few financial assets that increase in value as rates rise Most mortgage REITs are exposed to changes in interest rates, and are usually long-duration, which means that the value of their portfolio decreases in value as interest rates rise. Good examples of these types of REITs would be […]

The Consumer Financial Protection Bureau promulgated a list of requirements for a mortgage to be considered a qualified mortgage (or QM). On January 1, the new QM rules took effect.

Mortgage applications fall off a cliff on a short week The MBA Applications index rose 11% after falling 13% the week before, which was a holiday-shortened week. Refinances drove the increase, with an 18% jump in the index. Purchase activity also rose, although only slightly. The summer selling season is winding down, and we’re entering […]

The average 30-year fixed-rate mortgage rose 1 basis point, from 4.34% to 4.35%, while the ten-year bond yield was flat after a mixed jobs report.

The Federal Open Market Committee determines interest rate policy The June Federal Open Market Committee (FOMC) meeting was recently completed and the results of that meeting were released at 2:00 pm EST. The FOMC statement gives color on how the Fed views the economy, how they are thinking about moving forward, and some guidance regarding […]

Employment costs rose 0.6% in the quarter ending March 31, 2016. Over the past 12 months, compensation costs for civilian workers have risen 1.9%.

Mortgage originators have had a difficult time over the past year, as rates have begun rising. The increase in interest rates pretty much stopped the refinance boom in its tracks.

The Baupost Group lowered its position in Ocwen Financial (OCN) during 4Q14. The position accounted for 1.77% of the total portfolio in 4Q14.

Risks of being a servicer Generally, servicing seems like an easy job. Collect the payment, give the government its take, pass the (smaller) payment to the bondholders, and keep the rest. What could go wrong? There’s just one catch. What happens if you miss your mortgage payment? The U.S. government guarantees Ginnie Mae securities. When […]

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market started when it pushed rates lower to allow people to refinance.

Interest Rates are going up. Now what? It is hard to be a mortgage REIT investor right now. The secular bond bull market that began in 1981 – 1982 recession has ended. The wind at the back of REIT investors, quantitative easing, which has put a bid under most of the stuff that mortgage REITs […]

Given that credit conditions are generally strong elsewhere, there has to be something specific going on in the mortgage market. Regulatory conditions are making banks reluctant to lend.

TheFed hoped that lowering mortgage rates would also support home prices.

Last week, the ten-year bond yield increased 7 basis points, and mortgage rates rose from 3.85% to 3.9%.

Last week, mortgage rates rose from 3.87% to 3.92% even though the ten-year bond yield fell by a basis point.

Mortgage rates largely ignored the moves in bond markets. In the week ended January 8, they fell by ten basis points while the ten-year bond yield fell to 2.1%.

The latest survey shows that consumers expect home price appreciation to increase by 2.5% over the next 12 months. This is up 20 basis points month-over-month.

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.

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.

The Mortgage Bankers Association (or MBA) Refinance Index rose 66% from 1,349 to 2,245 as rates finally fell enough to allow refinances.

QE increased the size of the Fed’s balance sheet almost eightfold since the turn of the century. Currently, the Fed’s balance sheet holds around $4.5 trillion.

Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.

Annaly positioned itself to reduce its interest rate risk and increase its credit risk. Since 2009, global bond markets have risen in value by about $17 trillion.

In July 2016, the labor force participation rate rose to 62.8%—up 10 basis points from June. The labor force rose from 158.9 million to 159.3 million.

Lately, mortgage rates and bond yields have shown a weak correlation. Treasury yields have fallen over the past month, while mortgage rates have been steady.

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market started when it pushed rates lower to allow people to refinance.

The federal government has taken numerous steps to reduce foreclosures. It started with loan modification programs.

In June 2016, the labor force participation rate rose to 62.7%—up 10 basis points from May. The labor force rose from 158.5 million to 158.9 million.

Mortgage refinance applications, as measured by the MBA (Mortgage Bankers Association) Refinance Index, fell last week. Since mid-2013, refinances have been dropping dramatically.

Last week, the ten-year bond yield fell 12 basis points to 1.44%. Mortgage rates fell 10 basis points to 3.46%.

Mortgage applications fell 2.6% last week after rising 2.9% the week before. Rates were increasing for most of the week, only to fall on Friday on the Brexit vote.

Lately, mortgage rates and bond yields showed a weak correlation. Treasury yields fell over the past month. Mortgage rates have been steady.

New capital requirements for MSRs (mortgage servicing rights) are also depressing valuations. Banks are reluctant to hold too much servicing.

In May 2016, the labor force participation rate fell to 62.6%, down 20 basis points from April.

Last week, the ten-year bond yield rose 14 basis points to 1.84%. Mortgage rates rose 6 basis points to 3.64%.

The FOMC staff economists said that financial market conditions have improved further since the March meeting.

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market started when it pushed rates lower to allow people to refinance.

Quantitative easing (or QE) has increased the size of the Fed’s balance sheet almost eightfold since the turn of the century.

The unemployment rate has been falling, so why don’t we feel better about the economy? Let’s look to the labor force participation rate to answer that question.

Mortgage refinance applications fell 2.3% from 2,104 to 2,056 for the week ending March 4. Since mid-2013, refinances have been dropping dramatically.

Lately, mortgage rates have mainly ignored bond market movements.

Mortgage refinance applications, as measured by the MBA (Mortgage Bankers Association) Refinance Index, rose 16% for the week ending February 5.

Lately, mortgage rates have mainly ignored bond market movements. However, they finally started catching up. Last week, they rose by 5 basis points to 3.67%.

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market began when it pushed rates lower to help people refinance.

Mortgage rates have lagged behind the drop in interest rates we’ve seen over the past few weeks. Last Friday, they reacted to the strong jobs report and increased from 3.8% to 3.9%.

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help the housing market began when it pushed rates lower to allow people to refinance.

In October, the labor force participation rate held steady at 62.4%—its lowest point since 1977.

The elephant in the room at the Fed is that rates need to return to more normal historical levels at some point.

Last week, interest rates fell on the weak jobs report. The ten-year bond yield fell from 2.16% to 1.99%. Surprisingly, mortgage rates rose 5 basis points to 3.88%.

The employment cost index increased 0.2% in the quarter ending June 30, 2015. This was a small increase from the fourth quarter of 2014.

Last week, mortgage rates fell even though the bond market fell. This was because rates rose a few basis points too high…

Since the Great Recession, the labor force participation rate has declined. It’s back to levels we haven’t seen since the late 1970s.

Mortgage rates are the lifeblood of the housing market. The Fed’s plan to help housing began when it pushed rates lower to allow people to refinance.

As a general rule, mortgage rates are somewhat stabler than bond yields. When we see big outsized moves in the bond markets, mortgage rates tend to lag the move.

Employment costs increased 0.7% in the quarter ended March 31, 2015. This was a small increase from the December quarter.

Mortgage rates followed the bond market lower, which sold off with European bonds. The 30-year increased 9 basis points to 3.87%. The ten-year picked up 10 basis points.

With a focus to draw first-time homebuyers into the market, the government has announced measures to increase credit availability for new homebuyers.

Mortgage rates are the lifeblood of the housing market, and the Fed’s plan to help housing began with pushing rates lower in order to allow people to refinance.

Ally Financial joined TARP in 2008 as part of an effort to stabilize the US auto industry. The firm went on to become a major provider of auto finance.

Mortgage rates fell along with bond yields after the FOMC statement. That said, we’ve seen tremendous volatility in the ten-year over the past month

KB Home (KBH) is a Los Angeles–based homebuilder that focuses on first-time, move-up, and active adult homebuyers.

The MBA Applications Index fell 7.2% after rising 0.2% the week before. This is the lowest reading for the MBA Mortgage Applications Index since early 2001.

Non-QM loans would typically be useful for borrowers with sporadic income, but a large amount of assets. However, lenders will only consider low loan-to-value (or LTV) loans—like 80% maximum, which really is a ceiling. Most lenders are below that.

The average 30-year fixed-rate mortgage rose 2 basis points, from 4.15% to 4.17%, while the ten-year bond yield rose 11 basis points after some weaker economic data.

For the political right, the goal is to encourage private capital to return to the market and lower the government’s footprint in housing. For them, the goal is to “crowd in” private capital.

It’s important to keep in mind that the quality of MSRs that have been originated over the past six years are head and shoulders above the MSRs that were created during the bubble.

New York State Attorney General Eric Schneiderman decided in October to block the planned sale of mortgage servicing rights from Wells Fargo (WFC) to Ocwen Financial.

The non-bank servicer is what the name implies: a company that services loans as a primary business but isn’t a bank. Typically a bank will service its own loans that it has put on its balance sheet.

Mortgage servicing rights (or MSRs) are interesting assets that can hedge interest rate risk. They’re usually held on banks’ balance sheets.

The average 30-year fixed-rate mortgage rose 10 basis points, from 4.38% to 4.48%, while the ten-year bond rose 11 basis points.

The MBA Applications Index fell 12.8% after holding steady the week before. Mortgage applications have dropped off a cliff ever since rates began increasing last spring.

Last year, refinance activity drove business for mortgage bankers. Now, they’ll have to rely on purchase activity, which tends to be very seasonal.

Two Harbors’ sophisticated investment strategy of buying mortgage servicing rights and being short TBAs helped it weather the bond market sell-off.

The average 30-year fixed-rate mortgage fell 2 basis points, from 4.28% to 4.23%, as the ten-year bond yield dropped from 2.69% to 2.88%.

The economy added 148,000 jobs in September—lower than the consensus forecast of 180,000. August was revised upward to 193,000 jobs from 169,000.

Mortgage applications fall slightly The MBA Applications Index rose 0.3% after rising 1.2% the week before. Mortgage applications have dropped off a cliff ever since rates began increasing last spring. Both purchases and refinances drove the increase. The summer selling season is winding down, and we’re entering a slow period that will last through the […]

Mortgage servicing rights are residual assets from mortgage origination Mortgage servicing rights (MSRs) are residual assets that mortgage originators usually retain after selling a mortgage into a mortgage-backed security. While a few companies specialize in servicing—particularly Ocwen (OCN) and Nationstar (NSM)—MSRs are usually held on the balance sheets of banks. MSRs are interesting assets that […]