Apart from Monday, which had no meaningful econ data, today was the best candidate for an uneventful day on what is otherwise an important data week.  The scheduled econ data was light and of lesser importance compared to surrounding days.  Powell’s congressional testimony was on “day 2” (thus lowering surprise potential).  The only real wildcard risk was the ECB announcement, mostly due to any forward guidance clues in the press conference.  While bonds did enjoy a brief, positive reaction to ECB and 8:30am econ data, it was erased fairly quickly, and well before Powell began speaking.  That means today is fulfilling its “placeholder” destiny perfectly so far.

“I saw a woman at Walmart with March Madness teeth… She was down to the final four.” No one is talking about 30-year mortgage interest rates heading down into the 4’s; many would be happy if they came down into the 5’s. Heck, forget about mortgage interest rates because they’re going to do what they’re going to do. Originators are equally interested in potential or existing borrowers. New data reveals that Americans are spending nearly as much on interest payments for credit cards and other kinds of consumer debt as they are on mortgage interest. But hey, if your client has their debt under control, LOs can help them by passing along Home Facts so that they can do an analysis of where they might like to live. (Found here, this week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with Lending Tree’s Jacob Channel on the rent-versus-buy debate and just how far people should stretch their finances to achieve the dream of homeownership.) Lender and Broker Services, Products, and Software Collecting interim servicing payments is a pain, but not with Fee Chaser. With its seamless integration into Encompass® by ICE Mortgage Technology™, Fee Chaser automates upfront fee collection and can handle those pesky interim servicing payments as well. Check out Fee Chaser by LenderLogix here. Today’s mortgage landscape demands greater efficiency. Xactus, a leading verification innovator, makes it easy to obtain all the verifications lenders need to be more efficient and advance the modern mortgage. For example, with its ICE Mortgage Technology Encompass Partner Connect™ integration, you can streamline your consumer verifications. Encompass Partner Connect provides direct access to Xactus verification products including Credit ReportX, Flood ReportX, Undisclosed Debt VerificationX, Tax TranscriptX, Employment VerificationX, Income VerificationX, Fraud ReportX, and Social Security VerificationX. In fact, Xactus was the first third-party service provider to integrate credit with Encompass Partner Connect, and won the 2023 ICE Innovation Award for Lenders’ Choice for Innovative Service Provider. Heading to the ICE Experience in Las Vegas? Experience Xactus’ award-winning innovation. Stop by Xactus’ booth or email sales@xactus.com to schedule a meeting. For the latest updates and news about important industry innovations, follow Xactus on LinkedIn.

Reverse mortgage lender Finance of America posted a quarterly profit to end 2023, as it completed post-merger integrations and faced warnings of delisting from the New York Stock Exchange.

The Securities and Exchange Commission finalized a pared-down version of rules governing climate-risk disclosure by public companies first proposed in March 2022. Experts say even the weakened rule will likely face challenges in Congress and the courtroom.

Former Trump administration officials Steven Mnuchin and Joseph Otting are headlining an investment group that’s seeking to rescue the troubled Long Island lender. Otting is expected to serve as CEO, and Mnuchin will have a board seat.

In congressional testimony, the Federal Reserve chair said the Board of Governors is processing the comments on its capital reform proposal. Putting forth an entirely new proposal is “very plausible.”

Argyle, which helps lenders verify income and employment data, completed a $30 million funding round led by a Rockefeller Capital Management innovation fund, bringing its funding since the firm’s formation to more than $100 million.

Uneventful Gains Despite Apparent Market Movers

It was an interesting day for the bond market.  Yields dropped to the lowest levels in more than 3 weeks amid several apparently valid motivations.  But upon closer inspection, most of the improvement happened far enough away from those motivations to give them much credit.  On a day with JOLTS (job openings data) and a Powell testimony, the most obvious market mover was a series of headlines and trading halts surrounding NYCB, although those ultimately canceled each other out.  We’re left with modest but important improvement ahead of Thursday’s ECB announcement and Friday’s jobs report.

Econ Data / Events

ADP Employment

140k vs 150k f’cast, 107k prev

Job Openings

8.863m vs 8.9m f’cast, 9.026m prev

Market Movement Recap

09:00 AM Sideways to slightly weaker overnight, but gains kicked in at 7am.  10yr down 2.8bps at 4.123.  MBS up an eighth.  ADP and Powell’s prepared remarks doing no damage.

10:01 AM Minimal reaction to JOLTS.  10yr down 4.7bps at 4.104.  MBS up 9 ticks (.28).

12:31 PM Gains on NYCB circuit breaker at 11:53am ET.  MBS up 10 ticks (.31).  10yr down 6bps at 4.092

02:50 PM Some volatility surrounding NYCB headlines.  MBS off highs, up a quarter point on the day.  10yr down 4.3bps at 4.108.

Conventional 30yr fixed mortgage rates in the high 6 percent range have been available months now, and that didn’t change in the past few weeks when rates moved up from longer-term lows.  But the high 6 percent range was the exception during this time. As of today, the average top tier 30yr fixed rate is once again under 7% (6.97% to be precise).  That means many borrowers will be seeing quotes of 7 to 7.125% for top tier scenarios while some will see 6.875%.  As always, keep in mind that a top tier scenario assumes 780+ credit scores and at least 20% down in the case of purchases. The factors underlying the mortgage rate recovery are the same as the factors that drove rates higher 3 weeks ago: economic data. Back on February 13th, higher inflation data caused rates to spike.  There wasn’t much by way of meaningful data in the 2 weeks that followed, but since last Thursday, the data has been relatively rate-friendly.  It’s taken the combination of multiple reports to undo the damage done by a single dose of inflation data on the 13th, but on Friday, we’ll get a report that is just as much of a potential market mover. The catch regarding Friday’s big jobs report is that there’s no way to know if it will live up to its market moving potential NOR if it will be bad or good for rates.  

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