Rithm Capital, a real estate investment trust, is sponsoring the deal, in which property focused investor loans represent 32.60% of the collateral pool.

President Trump said big homebuilders are sitting on a record 2 million empty lots, and asked Fannie Mae and Freddie Mac to help restore the American Dream.

Affordability has improved and rate drops have exposed millions to incentives, but many more must wait for a break, ICE Mortgage Technology found.

The Office of the Comptroller of the Currency Monday said it will scrap fair housing reporting requirements, fast-track licensing for small banks and simplify regulation for smaller institutions overall.

The NCUA, as liquidating agent for three failed corporate credit unions, sued in 2018 claiming U.S. Bank failed to perform its role as RMBS trustee.

Incidental Weakness But No Big Picture Change

There were no economic reports on tap today and no obvious market moving headlines during the domestic session. The lighter volume and liquidity made the bond market more susceptible to random sources of inspiration in the overnight session. Political developments in Japan were thus able to have a larger impact than normal and, in this case, that impact was unfavorable for bonds. That said, the selling was ultimately moderate. Larger scale momentum requires an end to the shutdown (thus allowing things like the jobs report to be published).

Econ Data / Events

ISM Biz Activity (Sep)

49.9 vs 51.8 f’cast, 55 prev

ISM N-Mfg PMI (Sep)

50.0 vs 51.7 f’cast, 52.0 prev

ISM Services Employment (Sep)

47.2 vs — f’cast, 46.5 prev

ISM Services New Orders (Sep)

50.4 vs — f’cast, 56.0 prev

ISM Services Prices (Sep)

69.4 vs — f’cast, 69.2 prev

Market Movement Recap

10:51 AM weaker overnight with a modest recovery early.  MBS down 1 tick (.03) and 10yr up 2.6bps at 4.143

03:03 PM Gradually weaker and now at the weakest levels of the day.  MBS down 6 ticks (.19) and 10yr up 4.6bps at 4.164

Mortgage rates began the week right in line with their highest levels of the past 30 days.  This sounds a bit more dramatic than it is because the past 2.5 weeks have been very narrow and today’s rates are merely at the upper edge of that range (i.e. not much different than the recent lows). There were no meaningful economic reports driving volatility in the underlying bond market (bonds dictate rates), but overseas developments caused broad bond market weakness overnight.  Weaker bonds = higher rates, all else equal. More extreme rate movement remains on hold until the government shutdown ends, thus allowing the publication of the big-ticket economic reports that have the biggest impacts on rates.

Often the economy and general business trends are separate from management and business acumen. Like Block Buster, which at the high point had over 9,000 stores, Rite Aid had 5,000. Now it has… zero, despite people always needing drugs and toothpaste. Companies have to react to changing times… remember when CVS began locking its shelves to stop theft, and then made users add its app to help unlock them? The government shutdown is impacting lender’s business but is not impacting M&A news: Independent mortgage banks who need warehouse facilities are taking note that Fifth Third announced it will acquire Comerica in a $10.9 billion stock deal. It would create the nation’s ninth-largest bank… and could be the start of a long-anticipated consolidation among the bigger regional banks since there is an expectation that the Trump administration will look favorably on such deals. (Today’s podcast can be found here and this week’s are sponsored by Truework, the only all-in-one, automated VOIEA platform that helps mortgage providers achieve up to 50 percent cost savings with an industry leading 75 percent completion rate. Today’s features an interview with CHLA’s Taylor Stork on why FICO’s direct licensing pricing creates more options for consumers and lenders, but the mortgage industry should remain wary of FICO’s monopolistic pricing and practices.) Services, Products, Software, and Tools for Lenders and Brokers Las Vegas has a new icon: the Sphere. With its 580,000-square-foot LED exterior lighting up the Strip, it redefines what’s possible in entertainment and innovation. FirstClose™ has done the same for lending through its certified integration with Optimal Blue’s product, pricing, and eligibility (PPE) engine. By linking FirstClose’s advanced point-of-sale platform with Optimal Blue’s trusted pricing data, lenders can accelerate home equity closings from 45 days to 10 or fewer. The integration delivers a seamless borrower experience by combining real-time property data, eligibility insights, and precise loan pricing in one transparent, branded application journey. The result: faster approvals, stronger borrower trust, and more opportunities to serve the surging demand for home equity lines and second mortgages. Heading to Vegas for MBA Annual? Meet with the FirstClose team and see how we’re helping lenders achieve iconic results in home equity lending. Book your meeting here.

On paper, it was supposed to have been a sleepy session for bonds with nothing of note on the econ calendar. But in practice, we’re seeing one of the larger instances of overnight selling in months. Ironically, the extreme absence of domestic market movers can grease the skids for more volatility (via illiquidity) if unexpected motivations pop up.  That’s arguably the case overnight as political developments in Japan and the EU pushed yields higher in both sessions (but mainly the former). 

The oversight agency for Fannie Mae and Freddie Mac is taking a new approach to affordability targets and is withdrawing some unrelated, older initiatives.