Representatives of the insurance industry called the proposal too speculative and prescriptive, while consumer and environmental advocates say it doesn’t go far enough.

Quality Control Advisor Plus is an integrated system which brings together previously separate units, cutting months off of Freddie Mac’s current QC process.

The bank is adding trusted contacts, specialized teams and new tech against scams, but consumer advocates say reimbursement is the key missing piece.

Federal Reserve Governor Lisa Cook’s legal team argued in a new letter to Attorney General Pam Bondi that the claims “fail on even the most cursory look at the facts.”

New-home mortgage applications dropped, but the annual sales pace was the strongest in over a year, the Mortgage Bankers Association said.

The bond market (which dictates rates) was roughly unchanged over the weekend. As such, it’s no surprise to see mortgage rates right in line with Friday’s latest levels. For the average lender, this means conventional 30yr fixed rates are at the upper boundary of a narrow range stretch back to September 4th. It was the September 5th jobs report that sparked a rate rally that resulted in the lowest levels in over a year. Due to the government shutdown, that was the last time a jobs report was released. No that the government is reopen, the jobs report that normally would have come out at the beginning of October will be released this Thursday. While it likely won’t be as potent as a regularly-scheduled release in terms of its impact on rates, it can nonetheless result in some volatility.  Before that, we’ll get the latest Fed meeting minutes on Wednesday (a more detailed account of the Fed’s discussion that took place 3 weeks ago). With numerous recent Fed speakers calling a December rate cut into question, this particular installment of Fed Minutes could have a bigger impact than normal.

Uneventful Monday; MBS Underperform

In the bigger picture, bonds were flat on Monday without any major volatility in either direction. But if we break out the microscope, we find longer-term Treasuries rallying modestly while MBS lost 1 tick by the 3pm close. In today’s case, the MBS underperformance is most easily attributed to Treasuries’ underperformance on Friday. Specifically, 10yr yields pressed up to new highs by the end of the day whereas MBS held just slightly above their mid-day lows. Said another way, if we look back 2 trading sessions instead of 1, there’s no noticeable underperformance. The flat vibes are consistent with an absence of actionable info. This will change as the week continues, especially on Wednesday (Fed Minutes) and Thursday (NFP). 

Econ Data / Events

ADP Weekly Payrolls (Tue, 11/11)

-11k 

Market Movement Recap

08:54 AM Modestly stronger overnight with a slight pullback at 7am.  MBS up 1 tick (.03) and 10yr down 1.5bps at 4.135

12:09 PM MBS still up 1 tick (.03) and 10yr down 2.3bps at 4.127

03:28 PM MBS down 2 ticks (.06) and 10yr up 1.8bps at 4.132

The jobs report (for September) will be released on Thursday. It is the first major econ data to re-appear after the shutdown. Notably, that’s because it was ready to publish at the time of the shutdown (so don’t expect a flood of other announcements). By the time it comes out, we’ll have been waiting 1.5 months for a report that otherwise would have come out in early October. On one hand, that’s kind of stale. On the other hand, it’s the jobs report. Despite the time lag, it can absolutely have an impact (consider that NFP revisions or the always-stale job openings numbers frequently have an impact). That said, we wouldn’t expect it to be nearly as potent as a more timely release.
One day prior, the Fed Minutes release is a bit more interesting than normal considering the wave of hawkish messaging last week (it certainly seems like the Fed was actively trying to prep markets for unfriendly minutes).

Today’s trivia: Missouri and Tennessee are tied for bordering the most states: eight. This week I head to Missouri, the jumping off point for thousands of wagon trains heading west in the mid-1800s. Back then, land grants were relatively common but home loans weren’t, LTVs were high, and repayment was usually within five years. Deals were done with a handshake. Fast forward to today, and we have Fannie Mae dropping its minimum credit score requirements and relying more on DU to assess borrowers. The topics brought up or publicized recently by the Trump Administration include mortgage portability, 50-year mortgage amortization, tech companies doing business deals (with the GSEs with possibly an ownership stake in their companies), and assumability. The last thing we, as an industry need, is being accused of wrongdoing, but unfortunately, under the leadership of Bill Pulte and the FHFA, Fannie Mae allegedly shared pricing information with Freddie Mac. Many of us have been in meetings where Agency counsel attended specifically to ensure that price is not discussed! Some are saying that Mr. Pulte, who reports to the boards of Freddie and Fannie, may be a liability to President Trump who is just trying to improve affordability. Stay tuned. (Today’s podcast can be found here and this week’s are sponsored by Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. And, embedding their technology is easy. Hear an interview with MBA’s Joel Kan on the mortgage industry’s cautiously optimistic outlook, with steady purchase activity, emerging refi opportunities, and expected annual originations above $2 trillion, despite regional housing softness, a gradually weakening labor market, and uncertain short-term impacts from AI.)

Bayview Asset Management and three affiliates reached an agreement in a data breach lawsuit for an incident that impacted 5.8 million customers.