Large loan balances are increasingly common in non-QM and HELOC securitizations, bringing faster prepayments and higher delinquency risks, Bank of America Securities research shows.

A federal judge refused to sign a settlement agreement between the Department of Justice and Houston developer Colony Ridge because it failed to provide any consumer relief. DOJ agreed to an out-of-court settlement instead.

Half of Gen Z homeowners and 44% of millennial homeowners were at risk of missing at least one mortgage payment over the last two years, ServiceLink found.

Both Chase and Wells Fargo had a 15% reduction quarter-to-quarter in mortgage originations, more than the industry forecast for a 6% drop-off, Keefe, Bruyette & Woods noted.

Federal Reserve Gov. Michael Barr said in a speech Tuesday that rapidly changing trade policies and conflict in the Middle East are straining rural communities by raising business operating costs.

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Mortgage rates had their best day of the month so far with the top tier 30yr fixed rate falling 0.08% for the average lender to the lowest levels in exactly 4 weeks. Today’s improvement is a bit bigger than today’s bond market movement would suggest. The discrepancy is due to timing. Bonds were improving fairly steadily since yesterday morning and the average lender didn’t adjust yesterday’s rates in response to the bond market improvement in the last few hours of the day. As such, that improvement was tacked on to today’s. As for the drivers of the market movement, it’s the same old story since the beginning of March. The Iran war is the primary source of motivation and oil prices are frequently the best correlated indicator for bond yields and interest rates. Around 10am this morning, oil dropped and bonds improved after a senior administration official said “a lot is happening today and tomorrow. We have all the ingredients of a deal, but it’s not all there yet.”

Bonds Ultimately Follow Oil’s Lead, Heading Lower War-Related Optimism

While there were no incredibly memorable sound bytes on the Iran war today, there were a few headlines that proved to be actionable for financial markets. The most actionable (by a wide margin) was a report on Fox News around 10am quoting a senior admin official as saying “a lot is happening today and tomorrow. We have all the ingredients of a deal, but it’s not all there yet.” This was paraphrased by Fox as “Senior Trump Admin. Official: Strong Indicators Toward Reaching Agreement With Iran.” Oil and bond yields dropped on the news and both moves continued into the afternoon. Stocks rallied and have now essentially fully recovered the war-related losses.

Econ Data / Events

Core PPI m/m (Mar)

0.1% vs 0.5% f’cast, 0.5% prev

Core PPI y/y (Mar)

3.8% vs 4.1% f’cast, 3.9% prev

PPI m/m (Mar)

0.5% vs 1.1% f’cast, 0.7% prev

PPI y/y (Mar)

4.0% vs 4.6% f’cast, 3.4% prev

Market Movement Recap

08:32 AM No real reaction to PPI data despite being much lower than expected.  MBS unchanged on the day and 10yr up less than half a bp at 4.293

10:39 AM Best levels of the day with MBS up an eighth and 10yr down 1.2bps at 4.277

02:08 PM Best levels. MBS up nearly a quarter point and 10yr down 3.4bps at 4.255

Bonds were fairly flat overnight and haven’t moved much so far in the domestic session. More importantly, until 7am, bonds were slightly weaker even as oil prices have fallen and stocks have rallied.  What gives?! If PPI had come in much higher than expected, it would be easier to explain. But despite the 0.1 vs 0.5 reading for core monthly numbers, the PPI components that track with the more important PCE inflation metrics were actually a bit higher. In addition, the ill effects of fuel prices have already wreaked havoc on March inflation data. If we assume (and we should) that the full effects of higher fuel prices were not yet reflected in March prices at the time of the PPI data collection, bonds have to continue treading cautiously over the inflation outlook in coming months. Away from the data and war headlines, there are other considerations ranging from new estimates of the cost to fund the war and new warnings about forced selling of leveraged bond holdings if rates start rising again.

Sheer luck kept all but one hurricane from U.S. shores in 2025; one landfall in 2026 could devastate servicers.