The new notes redeem older ones issued in 2018 and address the kind of near-term obligation that analysts have monitored closely at nonbank mortgage firms.

The Detroit company intends to pay at least $1.9 billion of the servicer’s senior notes due through 2028, and could cover another $3 billion due through 2032.

JOLTS Data Didn’t Help, But it Didn’t Hurt Much Either

Bonds were moderately stronger overnight and then weaker after the 10am JOLTS data. The data itself was mixed with Job Openings higher (bad for rates) and job quits lower (good for rates). The headline took precedence and pushed yields back into higher territory on the day. Selling ebbed in the PM hours and MBS ultimately made it back to positive territory. Headlines regarding the Senate taking up the budget bill are ramping up, but with no discernible impact on the bond market so far.  Bottom line, a roughly unchanged close in bonds requires very little explanation.  On to the next data with ISM Services on Wednesday!

Econ Data / Events

Job Openings

7.391m vs 7.1m f’cast, 7.2 prev

Job Quits (lower is better for rates)

3.194m vs 3.332m prev

Market Movement Recap

09:57 AM Slightly stronger overnight.  MBS up 2 ticks (.06) and 10yr down 3.7bps at 4.409 ahead of JOLTS data.

10:44 AM Weaker after data.  MBS unchanged and 10yr up half a bp at 4.441

12:59 PM 10yr yields are up 2.4bps at 4.47 and MBS down nearly an eighth on the day.

04:26 PM Decent recovery.  MBS up 2 ticks (.06) and 10yr close to unchanged at 4.451

The combined prices of properties on the market for more than 60 days currently make up close to half of total unsold dollar volume, according to Redfin.

The company wants some holders of bonds due next year to allow a higher debt-to-equity ratio so it can pursue strong returns while managing certain risks.

Fischer, who served on the central bank boards of both Israel and the United States and served as the Federal Reserve vice chair from 2014 until 2017, died Saturday at age 81.

The Department of Justice is seeking to terminate a Biden-era lending discrimination settlement with Lakeland Bank. Last month, the DOJ took similar action in a case involving Mississippi-based Trustmark National Bank.

Federal Reserve Gov. Christopher Waller said changes to the Federal Open Market Committee’s quarterly economic projections could lead to clearer communication with markets and market participants.

Any lender or mortgage loan originator hoping for lower rates to spur business is learning that hope is not a strategy. “Rob, you’re always talking about inflation, so here’s an example of wage inflation: In the Bay Area we just paid a plumber $212/hour to install a kitchen faucet. Granted, he has decades of experience, but still…” The markets are “tariff-ied”: inflation is expected to increase, shipping is down, and growth has slowed… after all, someone has to pay for the increased cost of goods (although who knows what will happen given the back and forth in the courts). In addition, I have not heard a single person suggest that privatizing Freddie and Fannie would result in lower mortgage rates. Many believe that once released from conservatorship, Fannie Mae and Freddie Mac could need to hold more capital to absorb losses, the capital coming from increased guarantee fees charged to lenders. In addition, upon release, unless there’s an “explicit guarantee” or backstop from Congress, investors may demand higher returns to account for increased risk. But Treasury Secretary Scott Bessent said that Freddie Mac and Fannie Mae wouldn’t be released from conservatorship if doing so puts upward pressure on mortgage rates/mortgage spreads. Investment manager Pimco, and others, await. (Today’s podcast can be found here and this week’s is sponsored by CreditXpert, the credit optimization platform that helps today’s top mortgage originators and more than 60,000 mortgage professionals qualify more applicants, make more competitive offers, reduce LLPA premiums, and close more loans. Hear an interview with CHLA’s Scott Olson on the rising costs of credit scores, the monopoly power of FICO, and how increased competition, from VantageScore to new credit scoring models, could reshape the mortgage lending landscape.)

Mortgage rates have been in an exceptionally narrow range since last Tuesday with the 30yr fixed index hovering just under 7%.  The average lender is just a hair higher today versus last Friday, but still just under 7%. As always, the index is best used as a tool to track day over day changes in rates rather than outright levels.  Individual rate quotes can vary quite a bit depending on the scenario, lender, and discount points. Monday’s economic data consisted of a key report on Manufacturing from ISM. This report often has an effect on rates. It was fairly minimal this time, but it helped rates avoid a sharper increase.  As the week continues, several other important reports will be released. Friday’s jobs report is traditionally the most closely watched when it comes to the rate market.