The company was able release credit reserves because of actual and forecasted prices that boosted net income, CEO Patricia Almodovar said.

The accused, affiliated with Home Matters USA, reportedly took money from the victims and never delivered on the promised services.

Reasons For Hope And Caution Heading Into 3-Day Weekend

First off, “hope” and “caution” have different meanings depending on whether they’re applied to rates or the economy (i.e. what’s hopeful for rates is generally cautionary for the economy).  For instance, today’s Retail Sales number was FAR below expectations and it helped bonds further distance themselves from the highs seen earlier in the week after CPI.  We wouldn’t abandon caution just yet though.  Yields clearly avoided any serious confrontation with the pre-CPI ceiling.  By the time we consider that in conjunction with risks from econ data and the uncertainties surrounding 3-day weekend trading dynamics, it seems much safer to view bonds as being in more of a sideways stance (for now) as opposed to the first few steps of a bigger recovery.  

Econ Data / Events

Retail Sales

-0.8 vs -0.1 f’cast, 0.4 prev (revised down from 0.6)

Jobless Claims

212k vs 220k f’cast, 220k prev

Import prices

0.8 vs 0.0 f’cast, -0.7 prev

Export Prices

0.8 vs -0.1 f’cast, -0.7 prev

NY Fed Manufacturing

-2.4 vs -15 f’cast, -43.7 prev

Philly Fed Index

5.2 vs -8.0 f’cast, -10.6 prev

Market Movement Recap

08:49 AM Much stronger after retail sales data.  MBS up 10 ticks (.31).  10yr down 6.7bps at 4.178.

11:32 AM Giving back some gains with 10yr down only 1.1bps now at 4.234.  MBS still up 3 ticks (.09) but off 6 from the highs.

02:09 PM Edging back toward stronger levels.  MBS up a quarter point on the day.  10yr down 3.7bps at 4.208.

04:17 PM little changed from previous update

While weekly mortgage rate indices are pointing out the sharp jump from last Wednesday’s levels, daily rates have fallen twice in a row.  The peak was on Tuesday after the Consumer Price Index sent rates to the highest levels in more than 2 months.  Yesterday’s drop left us feeling cautious.  Today’s was more grounded by relevant underlying events. Specifically, the day’s most important economic data–retail sales–came in weaker than expected. That sounds like a bad thing, and it is if you’re the U.S. economy, but what’s bad for the economy is typically good for rates.   Retail Sales was far enough below forecasts that the bond market (bonds dictate day to day rate movement) improved immediately and noticeably.  This allowed the average mortgage lender to easily offer moderately lower rates compared to yesterday. All told, the improvements over the past 2 days have erased roughly half of the increase versus last week, but the average lender remains just above 7% for a top tier conventional 30yr fixed.

In my travels I’ve eaten some unusual foods, although maybe not this unusual, but here in Boise the talk is about how unusual it is that applications and locks have suddenly shot up in the last several business days. It is nice to hear and see the hustle and perseverance from originators pay off some. Taking a look at the big picture, per the U.S. Census Bureau, nearly 40 percent of all homeowners own their homes free and clear, or 33.4 million mortgage-free, single-family homes and condos. And some percentage of those have credit card debt that is 25 or 30 percent, so a tax-deductible loan at 7 percent can be pretty attractive. Sure enough, refis are hitting the numbers: as reported last month, 89 percent of people with mortgages have an interest rate below 6 percent, down from a record 93 percent in 2022. (Today’s Commentary podcast can be found here and this week’s is sponsored by Lender Toolkit and its AI-powered AI Underwriter and Prism borrower income automation tools. By providing lightning-fast underwriting decisions, your market reputation with borrowers and Realtors will soar, which means more repeat and referral business. Hear an interview with Stavvy’s Angel Hernandez on industry and regulatory affairs, and the state of loss mitigation solutions.) Lender and Broker Services, Products, and Software Ready to sprint? After successfully automating the front end of the mortgage loan process, is the industry ready to conquer what remains? To those with the vision of responsible innovation, the answer is ‘yes.’ Much of the mortgage lifecycle is still reliant on outmoded, labor-intensive processes and fragmented legacy technology. To address this disconnect, FHFA convened industry participants to explore data digitization as the vehicle for change. Clarifire’s current blog, “Responsible Innovation – A Future Vision for the Mortgage Industry,” looks at the five correlating challenges that continue to impact lenders, vendors, and regulators. It’s time to implement responsible automation with CLARIFIRE® promoting borrower engagement, 24/7 self-serve access, dynamic automated rapid results, operational efficiencies, and meaningful cost savings. Meet us at MBA’s Servicing Solutions Conference & Expo and learn how to deliver cohesive innovation with a better approach, better results, and better software. CLARIFIRE®, truly BRIGHTER AUTOMATION®.

Apart from CPI and NFP there are only a handful of other reports that truly deserve to be considered supporting actors in the current bond market drama.  Retail Sales is one of them.  The report has generally been a thorn in the bond market’s side over the past year as it has shown a surprisingly resilient consumer in the face of higher rates. That’s why there was some concern among some bond watchers over today’s forecast of -0.1.  Was this some sort of set-up?  Surely, a consistently stronger data series can do better than -0.1. But it turns out economists were on to something when they agreed on the negative print.  In fact, they could have been a whole lot more negative and still undershot the actual result: -0.8.  

The guidelines come as lenders face lawsuits over alleged discriminatory valuations.

Conversations around a potential sale started at the end of 2023 and the deal will close at the end of the first quarter, according to the Guild Mortgage executive.

The government-sponsored enterprise financed 955,000 mortgages last year, down from the 1.8 million loans it backed in 2022.

Gate House Compliance is working with experts like Michael Waldron and Paul Hancock to provide services like fair lending and servicing assessments.