Cotality’s fraud risk index hit its best mark since 2023, but investment and multifamily properties are driving elevated risk.

Federal Housing Finance Agency Director Bill Pulte won the White House’s favor by acting as an attack dog for the administration, using his agency’s data to target President Trump’s political enemies with fraud allegations, though those efforts have not withstood judicial scrutiny.

The Department of Veterans Affairs will accept the legislatively-mandated partial-claim option soon and servicing systems must accommodate it by November 28th.

Uncommonly Uneventful Day

No one will accuse us of clickbait titles today, or even clickbait analysis. There’s just not much to say. Unlike the average trading day of late, bonds held inside a very narrow range AND didn’t visibly respond to any major Iran war news (and the typical oil price volatility that follows). Oil prices definitely moved a bit, and bond yields generally followed, but the range was well inside yesterday’s. For a few minutes, it looked like bonds were going to struggle with the job openings data, but they quickly found their footing and drifted sideways into the close.

Market Movement Recap

09:36 AM Modestly stronger overnight but nearly unchanged now with MBS up only 1 tick (.03). 10yr down 1bp at 4.446

10:12 AM Some selling after JOLTS data, but stabilizing now. MBS down 1 tick (.03) and 10yr down just over half a bp at 4.45

The letter requested the agency to consider expanding the use of hybrid valuation methodologies and increasing the deployment of value acceptance.

A new state omnibus bill also adds explicit language and rules addressing servicing loan transfers and timely notifications of changes in escrow amounts.

The retained portfolios’ latest record monthly number puts Fannie Mae in front while Freddie Mac has held onto a lead in quarterly single-family loan purchases.

BCG finds lenders are turning to AI and M&A to permanently cut costs, even as origination volume and gain-on-sale margins showed year-over-year improvement in Q1.

An audit by the Office of Inspector General concluded that information security programs at both the Federal Reserve Board and the Consumer Financial Protection Bureau are no longer effective due to critical vulnerabilities.

Yields End Higher Despite Some Mid-Day Solace

As has been almost constantly the case for the past few months, today’s ebbs and flows in the bond market were tightly tied to the Iran war news cycle. Yields spiked after AM headlines suggested Iran was not interested in negotiating as long as fighting continues between Israel and Lebanon. Bonds bounced back in a friendlier direction after mid-day news that Trump would talk to Netanyahu about de-escalating. Nothing conclusive came from that conversation by the 3pm ET close and 10yr yields remained roughly 3bps higher on the day. Tuesday’s slate of potential volatility receives an additional (though mild) layer of complication from the job openings data at 10am ET.

Econ Data / Events

Construction spending (Apr)

0.4% vs 0.2% f’cast, 0.6% prev

ISM Manufacturing Employment (May)

48.6 vs — f’cast, 46.4 prev

ISM Manufacturing PMI (May)

54.0 vs 53 f’cast, 52.7 prev

ISM Mfg Prices Paid (May)

82.1 vs 85.5 f’cast, 84.6 prev

Market Movement Recap

09:19 AM moderately weaker overnight with additional losses after latest war headlines regarding Iran breaking off talks. MBS down 6 ticks (.19) and 10yr up 3.6bps at 4.475

09:36 AM MBS are now down 3/8ths of a point on the day and 10 ticks (.31) from intraday highs. 10s are up 6bps at 4.497.

12:24 PM Holding near weakest levels. MBS down 14 ticks (.44) and 10yr up nearly 7bps at 4.507

02:02 PM rebounding on news about Trump/Netanyahu talks. 10yr still up 3bps at 4.47 and MBS down a quarter point