Toll Brothers Inc. fell short of analysts’ estimates for quarterly orders, signaling that fewer people are signing contracts to build homes as high prices and economic uncertainty hold some buyers back.

The agencies’ representatives weighed in on the insurance fund’s capital ratio and evolving policies at the Mortgage Bankers Association’s servicing conference.

Some observers say changes to MSR risk-weighting would have limited near-term impact and are unlikely to prompt banks to rush back.

In a speech Tuesday, Federal Reserve Gov. Michael Barr said it was possible that artificial intelligence will boost productivity in an undisruptive way. But he said policymakers should also be wary of a financial crash if those gains are not realized or a rapid adoption that could lead to labor displacement.

The two organizations announced the Certified Home Equity Advisor credential, which will help financial professionals integrate home equity in retirement plans.

Calm Start Even if Modestly Weaker

The day before and/or after a 3-day weekend is more volatile than the average weekend-adjacent trading day. Last Friday fit that bill but today could have been mistaken for a summertime Monday (despite being a wintertime Tuesday). There were no significant reports and the available Fed comments weren’t actionable.  After nearly touching 4.0% in the overnight session, 10yr yields climbed slowly to 4.06 by 10am and then held mostly sideways through the close.  Considering the scope of last week’s rally, a “mostly sideways” day is a victory. On a cautionary note, the absence of follow-through and the overnight bounce underscore resistance potential near present levels.

Econ Data / Events

NY Fed Manufacturing

7.1 vs 7.7 prev

Market Movement Recap

08:43 AM Modestly stronger overnight. MBS up 1 tick (.03) and 10yr down 1.4bps at 4.036

11:20 AM weaker in the early trading. MBS down 1 tick (.03) and 10yr up 0.7bps at 4.055

01:33 PM Weakest levels. MBS down 2 ticks (.06) and 10yr up 1bp at 4.058

04:26 PM heading out fairly flat. MBS down 1 tick (.03) and 10yr up 1.1bps at 4.059

It was an uneventful day for mortgage rates with the average lender holding right in line with last Friday’s levels. In this case, that’s a good thing. On the day before and/or after a 3-day weekend, rates tend to be more volatile than normal. That was certainly the case last Friday as the MND rate index dropped at its fastest pace since early January.  By holding steady, rates remain right in line with the lowest levels in more than 3 years.

On Mortgage Law Today at noon PT Brian Levy, Loretta Salzano, and Peter Idziak sit down with Laura LaRia and Sandy Shatz for a deep dive into the legal and regulatory pressures shaping mortgage servicing. The discussion covers litigation trends, servicing agreements, regulatory developments, and how AI is beginning to influence risk and compliance strategy. And on tomorrow’s Mortgage Matters (at 1PM ET) Faith Schwartz, who has an incredible pedigree, draws upon her decades of housing finance and policy experience to discuss crisis leadership lessons, regulatory evolution, and what today’s lenders should be watching as the market recalibrates. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Optimal Blue. The only end-to-end capital markets platform built to power performance, precision, and profitability. Modern. Proven. Optimal Blue. Hear an interview with TRUE’s Steve Butler on why lenders start automation too late by focusing on late-stage checks instead of intake, even though most costs are created early, and how to move certainty upstream.) Products, Services, and Software for Brokers and Lenders If your borrowers are equity-rich but cash-constrained or stuck behind a home sale contingency and running into DTI limits, join Flyhomes live webinar on February 25 to see how Flyhomes Buy Before You Sell can help them purchase before selling, with little to no cash out of pocket. By unlocking equity from their current and future home, borrowers can access up to 105 percent LTV of the new purchase price. Save your spot for the webinar now or book a call to review a borrower scenario today. Flyhomes has helped 5,000+ buyers over the past 10 years, and LOs using this program close an average of 1.2 more loans per month.

At the start of the domestic session, bonds had actually managed to build on last week’s impressive gains, even if only by a few bps. That was a bit of a revelation as we didn’t know how much credit to give “defensive positioning ahead of a 3 day weekend” for a portion of those gains. Now that we’re a few hours into the trading day, the early gains have evaporated, but not in an overly-alarming way. Barring unexpected headlines, it looks like bonds will be able to digest the Wednesday’s Fed minutes from well within the confines of a 4.0-4.10% range in 10yr yields.

Federal Reserve Vice Chair for Supervision Michelle Bowman said in a speech Monday morning that the central bank will introduce two capital proposals that she said are aimed at boosting banks’ role in the mortgage market.