Nearly one-in-five homeowners have to borrow to pay unexpected expenses related to their property, although 24% claim to have a rainy day fund, according to Bankrate.

The position had been occupied by Scott Smith on an interim basis following Black Knight’s sale of the company to Constellation Software.

With millions of Black and Hispanic consumers likely to become new homeowners over the coming decades, the lending community stands to benefit if they are willing to combine expanded underwriting with direct outreach.

Straightforward Session as Traders Wait For More

Monday ended up being rather uneventful for the bond despite its role as the lead-off hitter for an all-star line-up.  There were no significant economic reports on tap, but the 3yr Treasury auction managed to come in weak enough to prompt a bit of additional selling.  Losses were short-lived and trading levels returned to pre-auction levels about 90 minutes later.  That left a sideways-to-modestly-weaker tone intact for the day as traders wait for ultra-high consequence data and events on Wednesday.

Market Movement Recap

09:58 AM modestly weaker overnight and little-changed since then.  MBS down 3 ticks (.09) and 10yr up 1.5bps at 4.476

01:40 PM a bit weaker after 3yr Treasury auction.  10yr up 2.8bps in total on the day at 4.489. MBS are down an eighth of a point in 6.0 coupons

03:20 PM Recovering some of the post-auction weakness now.  MBS down 3 ticks (.09) and 10yr up 1.9bps at 4.48

There’s been a noticeable uptick in mortgage rate volatility over the past two weeks with a quick spike at the end of May, a nice drop in early June and then another spike last Friday following the jobs report.  Of course everything’s relative, so in objective terms, it was roughly a 0.30% round trip for conventional 30yr firxed rates.   Today’s move is microscopic by comparison with the average lender only 0.02% higher from Friday.  That’s not too surprising considering the lack of actionable data on the calendar for bond traders (bond market movement drives day to day mortgage rate movement). All that is about to change.  The event calendar ramps up quickly from here and Wednesday will be the most important day of the month due to the release of pivotal inflation data and an updated rate announcement and outlook from the Fed.  While there’s no chance of a rate cut or hike at this meeting, we should get more clarity on the Fed’s interpretation of the very latest trends in inflation.

“It’s half the price of living at home!” Meet the people swapping dry land for a perpetual cruise. Meanwhile, back in the real world, residential loan originators are spending their days helping existing borrowers with their 3 percent 30-year fixed rate loans know when a cash-out refi makes financial sense. A lot was happening four years ago, and an unprecedented number of U.S. workers quit their jobs during the first full two years of the COVID-19 pandemic, in 2020 and 2021, a phenomenon dubbed the “Great Resignation.” What followed was what’s come to be known as the Great Reshuffling: Some workers exited the labor market entirely; others quit and eventually rejoined the labor force and others changed employers with little or no break in employment. U.S. Census Bureau statistics show to what extent U.S. workers changed jobs across industries during and after the pandemic emergency was declared over in 2023. Today’s podcast is found here, and this week’s are sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, cybersecurity, technology, and other services to the mortgage industry. Hear an interview with Verisk’s Kingsley Greenland on catastrophe and climate risk modeling, something that every lender and servicer should be aware of as it impacts the pricing of loans and servicing across the nation. Software, Products, and Services for Lenders and Brokers “LoanStream has Summer Specials to help you Close More! Includes Specials on Prime, Non-QM and Closed End Seconds now through June 30th, 2024. Includes 25 BPS Price Improvement on FHA/VA loans 620+ FICO (excludes DPA and CalHFA) and a 25 BPS Price Improvement on all Non-QM loans (excluding our ‘Select’ credit grade). We’re not done… Get another 25 BPS Price Improvement on Closed-End Seconds. Restrictions apply – contact your LoanStream Account Executive to learn more. Specials are valid for loans locked 6/1/2024 through 6/30/2024. Offers subject to change at any time, terms and conditions apply. Visit www.LoanStreamWholesale.com for more information and our June specials page.”

The Consumer Price Index (CPI) has done more than any other report to shape trends in the bond market in the past year.  At times (such as the middle and end of 2023), CPI provided hope that inflation was moving back down to target levels.  At other times, such as Q1 2024, it’s suggested a troubling resurgence of elevated inflation.  This week’s installment isn’t exactly in a position to put any debates to bed.  If it’s higher than expected, it would suggest the market continues waiting for better evidence of a shift.  But if it’s lower than expected, traders will increasingly view Q1 as the last unexpected push before a better chance at a turning point. With the Fed out with a new dot plot that same afternoon, there’s a lot at stake this week, but you wouldn’t necessarily know it based on the slow, sideways trading in place at the start.

Today’s only potentially relevant calendar item is the 3yr Treasury auction at 1pm.  Shorter term auctions are less likely to cause a reaction, but it’s not out of the question. 

A Fannie Mae survey-high 86% of prospective buyers said it was a bad time to buy a home in May.

The Massachusetts House passed a bill that would ease the process for property owners looking to build accessory-dwelling units.

Sen. Elizabeth Warren, D-Mass., a powerful member of the Senate Banking Committee’s progressive wing, said that the Federal Home Loan banks have “failed to deliver on their housing and community development mission.”