While the future can’t ever be known, this week’s base case was for lower volatility, and a general sideways drift heading into the long weekend and bigger-ticket data next week.  Today fits perfectly into that narrative, and in a bond-friendly way to boot.  Yields began near yesterday’s highs, but rallied all morning with help from econ data. It was Chicago PMI at 9:45am and Consumer Inflation Expectations at 10am that teamed up to the best effect, helping facilitate a drop from 4.22+ to just under the 4.19% technical level.  Small moves, to be sure, but ending the week at 2 week lows is a solid outcome.

Here’s a tip of the day for anyone manning a conference booth: instead of a pen, or mouse pad, how about a locally made treat? Hats off to Aimee, Bobby, and Mark from Byte Software who earlier this week at the TMC event had chocolate-covered Oreos from a local bakery. Technology was a big topic at TMC… Technology thoughts from 50 years ago? Here you go. (There’s definitely a school of thought which believes that the iPhone changed tech overnight. Almost 20 years later, nothing else has come close.) Vendor news seems to be at every conference, and capital markets staff are certainly big users of tech. At the TMC enclave secondary marketing folks often gravitate toward each other, “shooting the breeze” about odds and ends. For the most part, no one thinks they earn a living by making predictions, instead providing accurate information to other managers and owners, and acting as an advisor about loan profitability, leakage, concessions, and margins. Capital markets staff are also involved in LO and executive recruiting efforts, and in developing strong product offerings to help the company be successful. (Found here, this week’s podcasts are sponsored by Stavvy. Stavvy offers a flexible and fully customizable loss mitigation solution. Servicers can easily adapt to regulatory updates and market conditions, providing a seamless, customer-centric digital experience. Today’s has an interview with AmeriCatalyst’s Toni Moss about the Extreme Climate, Housing and Finance Leadership Summit on April 18-19, in Washington, DC.)

The report seeks to help banks “disrupt rapidly evolving AI-driven fraud,” according to Treasury’s Nellie Liang. The report found banks have difficulties accounting for AI risks.

The lender accused its former leader of compromising its Fannie Mae seller/servicer number to prevent it from delivering loans.

Equity is entitled to a little over $70,000 worth of damages.

Audited financials, proof of fidelity bonds and errors and omissions insurance must be provided on Ginnie Mae Central after May 13.

State and local governments borrowed nearly $9 billion for affordable housing so far this year — the most for the period in at least a decade.

Treasury Auction Relief Rally and Month-End Support

With Thursday being a half day before a 3.5 day weekend, it’s entirely reasonable to suspect month-end trading helped the bond market today.  There’s never a great way to know if it will help or hurt, but it’s a common hindsight conclusion when markets are moving without any other salient provocation.  Speaking of provocation, the 7yr Treasury auction provoked a bit more buying in the afternoon.  It also helped underscore the Treasury outperformance of MBS after 2 previous days of underperformance (i.e. the market was making room for the auctions and it found that it had plenty).  Thursday is the busiest day of econ data of the week.  None of the data is top tier, but it could be enough to shake things up in the AM hours. 

Market Movement Recap

10:26 AM Modestly stronger overnight.  MBS up 2 ticks (0.06) and 10yr down 1.6bps at 4.222.

11:36 AM Additional gains heading into the 11am hour.  MBS up 3 ticks (.09) and 10yr down 3.2bps at 4.206

01:03 PM 7yr auction was slightly stronger than expected.  Bonds rallying a bit more.  MBS up 5 ticks (.16).  10yr down 5.2bps at 4.186

03:24 PM MBS still up 5 ticks (.16).  10yr down 4.4bps at 4.194

There are probably only a few 4-day streaks with effectively no movement in mortgage rates, and this is one of them.  After falling to 6.91% last Friday, the MND rate index hasn’t moved more than 0.01%. Granted, some lenders have been higher or lower during that time, but they offset each other in such a way that the average stayed flat. There’s no special significance to this development.  It’s more of a trivia novelty.  If we were determined to assign meaning, we could say that the flat performance is evidence that the rate market is fraught with uncertainty as it waits to see how the next round of significant economic data will shape the next trend.  Markets don’t have to wait much longer as the more relevant reports start rolling in next Monday.  As for this week, there are several middle tier reports on Thursday morning, and then markets are closed on Friday.

Could anything be better than Krispy Kreme coming to McDonalds! Yes! The new HMDA data is here! (More of a more serious note below.) Whether donuts or mortgages, a company can’t manufacture them without planning. Searching for one perfect process for your lending operation? It doesn’t exist. In STRATMOR Group’s March Insights Report, Principals Jennifer Smith and Jennifer Fortier debunk the myth that there can be only one right way to run all the processes within your organization, discussing the benefits of regular mortgage process reviews and emphasize the importance of thoughtful planning, execution, and ongoing support to ensure successful and sustainable changes in processes when needed. Of course planning involves numbers, and with many companies gutting their accounting and analysis departments, data analysis and measuring performance is now increasingly outsourced to companies like Gallus Insights. (Found here, this week’s podcasts are sponsored by Stavvy. Stavvy offers a flexible and fully customizable loss mitigation solution. Servicers can easily adapt to regulatory updates and market conditions, providing a seamless, customer-centric digital experience. Today’s has segments from yesterday’s Mortgages With Millennials show featuring Nestment’s Niles Lichtenstein and Bilt Rewards Jonathan Lawless discussing co-buying.) Lender and Broker Services, Products, and Software “Truv is now a conditionally authorized report supplier for mortgage lenders using Fannie Mae’s Desktop Underwriter (DU®) validation service. With Truv’s support for D1C, lenders can lower costs by up to 80 percent, reduce risk of fraud and buybacks by leveraging real-time data directly from the source, and accelerate growth by increasing pull-through rates and closing loans faster. Contact our team for a demo today to start saving. Get Started!”