The megabank’s multiyear effort to simplify its business model and improve its risk management is starting to pay off in the form of more consistent profitability and improved returns, CEO Jane Fraser told analysts.

Fannie Mae and Freddie Mac’s credit risk-transfers and some older private-label mortgage-backed securities have exposures to the Washington DC area.

Lebda, who died over the weekend in an ATV accident, built one of the first online financial marketplaces in 1998.

Yields Hug Multi-Week Lows After Powell Speech

Bonds were remarkably resilient over the extended weekend given the moderate rebound in the stock market. As of Friday afternoon, yields and stocks swooned together in response to trade war escalation with China. Stocks recovered half those losses by 3pm, but were unchanged to slightly stronger. The morning hours suggested a modest sell-off, but buyers returned after Powell’s speech. He didn’t say anything that was obviously worth a rally, so perhaps it was the absence of hawkishness that helped.

Market Movement Recap

09:38 AM Losing some ground after stronger open. MBS down 1 tick (.03) and 10yr up 0.2bps at 4.036. 

01:11 PM Slightly stronger after Powell speech.  MBS up 3 ticks (.09) and 10yr down 0.2bps at 4.031

05:10 PM Little-changed at the close with MBS up 3 ticks (.09) and 10yr yields down 0.4bps at 4.029

Last week ended with mortgage rates dropping to their best levels since September 17th. Over the weekend, the underlying bond market maintained the gains seen on Friday afternoon, thus allowing most lenders to set rates at least as low as they were at that time. The average lender is actually just slightly lower today, thus making this another new multi-week low. The counterpoint is that the range is still relatively narrow, which each day during this stretch (roughly 4 weeks) falling inside a range of 6.31 to 6.39.  As always, keep in mind that the MND index is an average top tier rate (i.e. high credit score, high downpayment, owner occupied, etc.). There were no major sources of volatility on the calendar today although a speech from Fed Chair Powell had the potential to cause some.  The event calendar will remain more silent during the government shutdown. Once it’s over, volatility potential will increase.

“Where do amputees get prosthetics on a budget? The secondhand store.” Budget, stalemate, and shutdown news continues in Washington DC. The sun still comes up in the morning, and there is news on related issues. For example, thank you to Sean S. who told me that HUD opened the suggestions window for improving the HECM (reverse mortgage) product. The reasons why Treasury and mortgage rates remain elevated despite the shutdown and Fed’s rate cuts will be discussed in the Capital Markets Wrap at 3PM ET, presented by Polly. In other shut down news, “USAA has stepped up for military service members and federal employees impacted by the government shutdown, delivering over $232 million in no-interest loans to about 62,000 members to date. As part of this program, eligible USAA members can apply for a no-interest loan equal to one net paycheck, up to $6,000. USAA has also processed tens of thousands of additional payment relief offers for banking and insurance products.” All the while, lenders and vendors are grappling with market shifts due to lack of economic news, interest rates, regulatory landscape (steady vs. being reactive), consumer behavior, and are participating in industry advocacy at the state or national level, thus giving them a voice. (Today’s podcast can be found here and this week’s are sponsored by Floify, an industry-leading point of sale platform. With Floify’s new Dynamic AI feature, lenders can modify applications with no coding required and rely on AI to autofill key application fields, allowing borrowers to fill out only a few fields relevant to their needs. Hear an interview with Tavant’s Mohammad Rashid on how automation and artificial intelligence will reshape customer experience, streamline operations, and address key lender challenges, positioning technology as the catalyst for modernizing and transforming the mortgage landscape.)

Bonds are flashing red on the screen (depending on when you look), but even at their weakest levels of the morning, we’d still consider this a stronger start. Reason being: Friday afternoon’s rally lasted 10 whole minutes right at the end of the session. Before that, 10yr yields were around 4.06 and 5.0 MBS were trading just under 99.5. Now this morning, 10yr yields are in the mid 4.03’s and MBS are at 99.55–both easily stronger compared to the 4:50pm levels from Friday.

Lebda led the company through its initial public offering in 2000, and its sale about three years later to IAC Inc. In 2008, Lebda joined the newly rebranded LendingTree as it spun out as a separate company.

The Office of Management and Budget issued reduction in force notices to Treasury staff working in the Community Development Financial Institution office Friday, saying that the layoffs are necessary to “implement the abolishment” of the fund.

The Consumer Financial Protection Bureau has announced job openings for attorney-advisors to represent the agency in defensive and appellate litigation.