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.
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.
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 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.
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 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.
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.
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%.
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.
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.
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.
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.
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 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 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.
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.
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 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 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.
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 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 […]
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 […]
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 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 […]
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 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 […]
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 […]
