Rising property values continue to buffer mortgagors against negative equity situations, Corelogic said.

The penalty by the Office of the Comptroller of the Currency is a major setback for the San Francisco bank, which was freed from a separate anti-money-laundering order in 2021. Its stock price fell sharply after the news broke.

A letter led by Sen. Elizabeth Warren, D-Mass., urges bank regulators to crack down on banking as a service, while another led by Sen. Jack Reed, D-R.I., asks that the Consumer Financial Protection Bureau more closely monitor buy now/pay later companies.

While large institutions might rank low in customer satisfaction, the institutions that can build up client trust are also likely to see consumers more likely to share personal data, a leading analyst said.

A combination of buy and sell-side issues led Mr. Cooper to slow down its mortgage servicing rights activity but executives may have a different view next year.

Modest Resistance, But No Big Bad Correction

Unless Friday’s Consumer Sentiment data manages to surprise in some completely unprecedented way, bonds have made it through the week of economic reports and Treasury auctions without looking any worse for the wear.  Thursday saw a small amount of ground conceded, but not enough to move yields back up in to last week’s range.  The initial reaction to the 8:30am data was actually slightly positive for bonds.  Selling came later, suggesting sellers had other motivations.  The recovery in the afternoon was concentrated in the shorter end of the yield curve following an article by WSJ’s Timiraos discussing a 25bp vs 50bp Fed rate cut.

Econ Data / Events

Jobless Claims

230k vs 230k f’cast, 227k prev

Core PPI MM

0.3 vs 0.2 f’cast, -0.2 prev

Core PPY YY

2.4 vs 2.5 f’cast, 2.4 prev

Market Movement Recap

08:54 AM Roughly unchanged overnight and a hair stronger after data.  MBS up 2 ticks (.06) and 10yr down 0.7bps at 3.647

01:13 PM weakest levels just after noon, but off the lows now.  MBS down an eighth and 10yr up 4.2 bps at 3.696

02:55 PM MBS now down only 1 tick (.03) and 10yr up 2.7bps at 3.681

While it’s true that there have only been 8 business days so far this month, it’s also true that today is the only one of the 8 where mortgage rates haven’t been lower than the previous day for the average lender.  That’s the bad news. The good news is that today’s increase was modest.  In fact, if you take yesterday out of the equation the average lender’s conventional 30yr fixed rates are easily at the the lowest levels since February 2023.  That’s a drop of more than .75% in just over a month, which is a quick pace of improvement.  It’s also part of the longest trend of rate improvement in more than 3 years. Many times, when it comes to movement in financial markets, “too much of a good thing” means you might see the opposite of that thing–at least to some extent.  That’s certainly a possibility, but it depends on incoming economic data and the market’s reaction to the Fed’s rate outlook next week.   NOTE: we’re not as interested in the Fed’s rate cut because that part of the policy shift is already reflected in today’s interest rates.  Rather, if the Fed communicates a more aggressive rate cut outlook in the upcoming months, rates could continue lower.  Conversely, if the rate cut outlook underwhelms, there’s room for rates to bounce back up and hold steady until the next major round of economic data.

“Honey, what did you do today?” “Well…” People do some cockamamie stuff against all odds. What are the odds of a lender or LO retaining their client after the loan has been brokered out or the servicing’s been sold? UWM released KEEP, “an industry-leading technology that utilizes AI to send pre-validated refinance opportunities as soon as a borrower is able to obtain meaningful savings on their monthly payment.” (More below.) “Rob, I recently interviewed at a broker shop that, as it turns out, is sending over 95 of its loans to one wholesaler. What are the odds? Does that sound right to you?” Many will argue that a broker’s duty is to shop multiple wholesalers for every loan, knowing that one company is not going to have the best product, price, and service every day for every client. Or even near that. Therefore, if indeed 95 percent were sent to one wholesaler, that would defy all the odds. What do you think the odds are that every home builder out there employs immigrants of one size & shape or another? I’d say 100 percent. Hate to be the bearer of bad news, but every construction company uses immigrants to build America. Some will claim that they literally have built America. (Today’s podcast is found here and Sponsored by Richey May. Richey May’s consulting, cybersecurity, business intelligence, and automation services are designed by mortgage experts to help you continue to drive growth and increase profitability. Hear an interview with LodeStar’s Alayna Gardner, AMP, on how her podcast (Lending Leaders) and other conversation-based content focused on thought leadership is ushering in a new era of content marketing.)

Thursday brings this week’s last opportunity for the market to react to moderately important economic data before next week’s Fed announcement.  So far, it looks like fireworks are not on the menu.  Heavy lifting was left to only two reports: Jobless Claims and PPI.  Neither are true top tier reports, but both are capable of causing a reaction.  Today’s installments didn’t swing for the fences.  Claims were flat and PPI was a mixed bag with a higher reading for August offset by a bigger downward revision to July. The market reaction was stronger at first, but is turning weaker as the morning progresses.  The bigger issue is that this makes the bigger-picture rally look a bit tired, or at least like it’s consolidating ahead of next week’s unavoidable breakout. 

The Kansas City-based firm created the ETFs in response to demand from clients, in particular the wealth management community.