Nationstar Mortgage Holdings Inc
Latest Nationstar Mortgage Holdings Inc News and Updates
Jobs Report Postponed until Friday, May 8
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.
Strong economic data is causing the yield curve to steepen
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, […]
Radar Logic futures curve predicts flat real estate prices until September 2014
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 increase in value as interest rates rise
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 […]
Mortgage applications rebound after a short holiday week
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 […]
Bonds and REITs collapse on FOMC statement
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 Rise with Healthcare Inflation
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%.
Why steeply falling originations mean bad news for non-agency REITs
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.
Baupost Group Lowered Its Stake in Ocwen Financial
The Baupost Group lowered its position in Ocwen Financial (OCN) during 4Q14. The position accounted for 1.77% of the total portfolio in 4Q14.
Why mortgage servicing rights imply risks for servicers
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 […]
Recommendation: how to play increasing interest rates for Mortgage REITs
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 […]
Mortgage Rates Rose as Bond Yields Increased
TheFed hoped that lowering mortgage rates would also support home prices.
Mortgage Rates Fall as Bonds Rally, Impact Mortgage REITs
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%.
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.
Bond Market Rally Lifts Originator Business
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.
An Old Headache Returns: Increased Prepayment Speeds Up
The Mortgage Bankers Association (or MBA) Refinance Index rose 66% from 1,349 to 2,245 as rates finally fell enough to allow refinances.
Why the Fed Continues to Reinvest Its Maturing QE Assets
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.
What’s Annaly Capital’s Take on the Bond Market’s Volatility?
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.
The Labor Force Participation Rate Increased in July
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.
Mortgage Rates Rise with the Bond Market
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.
Increasing Mortgage Rates Negatively Impact Mortgage REITs
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.
How Do Foreclosures Impact Mortgage REITs?
The federal government has taken numerous steps to reduce foreclosures. It started with loan modification programs.
Labor Force Participation Rate Rose in June
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.
How Much Did Mortgage Refinance Applications Fall Last Week?
Mortgage refinance applications, as measured by the MBA (Mortgage Bankers Association) Refinance Index, fell last week. Since mid-2013, refinances have been dropping dramatically.
Mortgage Rates Catch Up with Bond Yields
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 on the Brexit Vote
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.
Housing Market: Mortgage Rates Head Lower
Lately, mortgage rates and bond yields showed a weak correlation. Treasury yields fell over the past month. Mortgage rates have been steady.
The Labor Force Participation Rate Heads Back Down Again
In May 2016, the labor force participation rate fell to 62.6%, down 20 basis points from April.
Mortgage Rates Rise with Treasury Yields
Last week, the ten-year bond yield rose 14 basis points to 1.84%. Mortgage rates rose 6 basis points to 3.64%.
The Fed Continues to Maintain Its Bloated Balance Sheet
Quantitative easing (or QE) has increased the size of the Fed’s balance sheet almost eightfold since the turn of the century.
Labor Force Participation Rate Rose: So Why Don’t We Feel Better?
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.
Labor Force Participation Rate Still Mired at Multi-Decade Lows
In October, the labor force participation rate held steady at 62.4%—its lowest point since 1977.
Why Did the Fed Decide to Keep Reinvesting Maturing QE Assets?
The elephant in the room at the Fed is that rates need to return to more normal historical levels at some point.
Mortgage Rates Tick up Despite Bond Market Rally
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%.
Employment Cost Index Falls
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.
Mortgage Rates Fell Last Week as the Bond Market Sold Off
Last week, mortgage rates fell even though the bond market fell. This was because rates rose a few basis points too high…
The Labor Force Participation Rate Hits a Multi-Decade Low
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 Rise as Bond Market Sells Off
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.
Why mortgage applications hit 14-year lows as refinances dry up
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.
Must-know: Understanding non-qualified mortgage loans
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.
A key guide to mortgage servicing rights: The non-bank servicer
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.
The must-know basics of mortgage servicing rights and servicers
Mortgage servicing rights (or MSRs) are interesting assets that can hedge interest rate risk. They’re usually held on banks’ balance sheets.
Mortgage rates rise 10 basis points on strong economic data
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.
Why mortgage applications fell in the holiday-shortened week
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.
Why mortgage applications are falling as rates rise
Last year, refinance activity drove business for mortgage bankers. Now, they’ll have to rely on purchase activity, which tends to be very seasonal.
Must-know: Two Harbors reports a small decline in book value
Two Harbors’ sophisticated investment strategy of buying mortgage servicing rights and being short TBAs helped it weather the bond market sell-off.
September jobs report disappoints, December taper off the table
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.
Why mortgage applications rose despite the government shutdown
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 […]
Why mortgage servicing rights can hedge interest rate risk
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 […]