At issue is the CFPB’s weekly publication of Average Prime Offer Rate tables, a key benchmark enabling the smooth operation of the $13 trillion residential mortgage market.

Weaker Data Endorses the In-Progress Rally

Who knows how today would have ended up if the relevant econ data had come in stronger than expected. Perhaps that would have been enough to see an earlier, more threatening sell-off in bonds. As it stands, we’re heading out the door with moderate gains, even if we can’t give clear credit to the data (because the gains happened before the data). Thursday brings another chance to see if different data (Jobless Claims, Challenger Layoffs, Revelio payrolls) will be worth any more of a response. Otherwise bonds are just grinding out a range ahead of next Wednesday’s Fed Day. 

Econ Data / Events

ADP Employment

-32k vs 10k f’cast, 42k prev

ISM Biz Activity (Nov)

54.5 vs — f’cast, 54.3 prev

ISM Services PM I (Nov)

52.6 vs 52.1 f’cast, 52.4 prev

ISM Services Employment (Nov)

48.9 vs — f’cast, 48.2 prev

ISM Services New Orders (Nov)

52.9 vs — f’cast, 56.2 prev

ISM Services Prices (Nov)

65.4 vs — f’cast, 70.0 prev

Market Movement Recap

08:37 AM 10yr down 3bps at 4.06 and MBS up more than an eighth of a point even before the ADP data. Little-changed since then. 

10:02 AM No major reaction to ISM data.  MBS up an eighth and 10yr down 2.2bps at 4.069

10:38 AM Session lows with MBS down 5 ticks (.16) from AM highs (still up on the day, barely).  10yr down less than 1bp now and up more than 3bps from the lows at 4.084

12:43 PM bouncing back a bit.  MBS up 3 ticks (.09) and 10yr down 2.3bps at 4.068

03:59 PM MBS up 5 ticks (.16) and 10yr down 3.1bps at 4.06

Mortgage rates improved more noticeably today, and while the average rate isn’t quite as low as it was last week, it’s fairly close.  Rates are based on movement in the bond market. Bonds were most likely to move in response to one or both of today’s big economic reports.  Oddly enough, most of the bond market improvement was seen overnight, BEFORE the economic data came out. Nonetheless, the data definitely didn’t hurt.

10yr yields are almost 4bps lower in early trading and the ADP employment report came in at -32k vs a +10k forecast. The logical conclusion would be that the data is responsible for the rally, but there was actually a remarkably light reaction to the data, both in terms of volume and volatility.  Most of the gains arrived between 6am and 7:30am ET and yields are actually back in line with pre-ADP levels by 8:30am.  The morning’s next big report is ISM Services at 10am ET.

Both Dick Van Dyke and Mel Brooks turn 100, Dick in less than two weeks and Mel next summer. 100 years is a long time, and it’s a big number. Despite faster economic growth than peers, the U.S. faces rising deficits and debt levels above 100 percent of GDP. If this impacts our debt ratings further, look out. Political gridlock and reluctance to enact meaningful tax increases or spending cuts echo challenges seen in the UK and France, where governments struggle to satisfy voters, lenders, and economic needs simultaneously. Recent market jitters, such as the spike in Treasury yields in April, serve as warnings of potential debt-market instability if political inaction persists. For something more constructive to think about for lenders, today Marcia Davies, COO of the Mortgage Bankers Association, joins L1 for one of her last interviews before retirement, and tomorrow’s The Big Picture at 3PM ET features Mike Yu, CEO of Vesta, for a fast, insightful conversation on the future of loan origination systems and what it means to rebuild the LOS from the ground up. Mike shares the Vesta origin story, why legacy systems have reached their limits, and how a true platform approach built on open architecture and modern APIs is reshaping how lenders design their tech stacks. (Today’s podcast can be found here and this week’s are sponsored by Two Dots, whose conversational screening agent replaces manual underwriting with a streamlined, end-to-end process that reduces risk and fraud while securing safer borrowers, increasing profitable loan volume, and lowering underwriting overhead. Today’s has an interview with U.S. Bank’s Shelly Kobb and Ohio Housing’s Tom Walker on how Housing Finance Agencies work, the challenges they face in expanding affordable homeownership, the policy and political developments shaping their future, and the innovations and outreach strategies needed to keep their programs sustainable, effective, and accessible.)

Absolute will add Fidelity Digital Mortgage’s 55 producing loan officers to its team of roughly 190.

In the New Jersey case, MV Realty and its principals agreed to pay $28 million in fines and restitution for these “Homeowner Benefit Agreements.”

Billions in home equity sit untapped as second-lien loans struggle to gain traction, writes the chairman of Whalen Global Advisors.

In a relatively mild oversight hearing in the House Financial Services Committee Tuesday morning, regulatory heads at the Federal Reserve, Office of the Comptroller of the Currency, National Credit Union Administration and Federal Deposit Insurance Corp. outlined plans for reduced capital requirements and debanking enforcement.

The Troy, Michigan-based lender and servicer faces at least seven lawsuits over a hack in June allegedly perpetrated by a known ransomware gang.