James B. Nutter & Co., after its legal victory over the Justice Department in July, agreed to a $2.4 million False Claims Act settlement over poorly underwritten reverse mortgages.

A Florida brokerage attempted to keep its antitrust suit alive by incorporating the recent Hunterbrook Media report.

Sen. Edward Markey warns that biased AI algorithms are making decisions that deny mortgages to Black people.

The $17 billion-asset Suffolk-based company is convinced paying $120 million for an in-state rival is a more productive use of capital than share buybacks

Early Weakness Erased After Labor Market Warning Signs

The first few hours of domestic trading caused some concern that the post-Fed rate correction was far from over.  At the time, yields were up several bps from closing levels and had just broken above yesterday’s highs.  That’s not the sort of thing you want to see if you’re hoping for bonds to level off.  Everything changed after the Consumer Confidence data.  While this isn’t a report that reliably causes a reaction in the bond market, it’s “labor differential” component is more closely watched recently.  Derived by subtracting the “jobs hard to get” line item from “jobs plentiful,” the differential is increasingly pointing toward a softer job market–something that is well understood to align with more aggressive rate cuts from the Fed. 

Econ Data / Events

FHFA Home Prices

0.1 vs 0.2 f’cast, 0.0 prev

FHFA Annual Change

4.5 vs 5.3 prev

Case Shiller Home Prices

0.0 vs 0.6 prev

Case Shiller Annual Change

5.9 vs 6.5 prev

Consumer Confidence

98.7 vs 103.8 f’cast, 105.6 prev

Market Movement Recap

09:09 AM Steadily weaker overnight.  10yr up 4.7bps at 3.794.  MBS down an eighth.

10:01 AM Bouncing back after Consumer Confidence.  MBS down only 2 ticks and 10yr up 2.5bps at 3.772

03:14 PM trickling to best levels of the day.  MBS up 3 ticks (.09) and 10yr down 1.4bps at 3.733

04:39 PM unchanged since the last update.  Bonds going out at the day’s best levels.

Monday’s trading session offered some hope that the post-Fed correction was losing steam, but purely from a technical standpoint.  All we really know at times like this is that bonds were keen to rally heading into last week’s Fed announcement and had generally been selling ever since.  At some point, that selling will run its course, even without the influence of economic data.  Earlier this morning, it looked like selling had not yet run its course!  Losses weren’t extreme, but enough to keep the correction going.  Things are changing after a decisively weaker reading in Consumer Confidence.

Today I leave Illinois, with the world’s largest corn maze, and head to Nebraska, with the world’s largest ball of stamps, things that make life interesting. (Nebraska is also the source of CliffsNotes, among many things, invented in 1958.) Regardless of where I travel, regulation and its cost to lenders, and therefore the consumer, is a constant refrain. My cat Myrtle would have agreed wholeheartedly. To that point, I recently received this note from an industry vet: “Rob, I think that with regard to the significant cost of regulation, the industry needs to change its rhetoric from, ‘Things that cost lenders a lot of money and don’t add anything to revenue,’ to ‘Things that increase the cost of a consumer’s loan transaction.’” The title biz is not immune to trends in our biz, and Nuria Rivera, CEO of Novation Title Insurance, joins Kristin Messerli and Robbie Chrisman on this month’s episode of Mortgages with Millennials, today at 10a PT/1p ET, for a discussion on Latino housing, the Hispanic Wealth Project, why reaching the Latino community should be an important part of your business strategy, the purchasing power of the segment, as well as Nuria’s story of immigration and entrepreneurship and the importance of understanding the culture. (Today’s podcast is found here and this week’s is Sponsored by Silk Title Co. Silk is for lenders who have centralized operations, are tech driven, process oriented, focused on the borrower experience, standardized in their approach, and most importantly… collaborative. Listen to an interview with Panorama Mortgage Group’s new President Hector Amendola on the importance of companies growing their Latino book of business.)

The Federal Reserve is far from the only game in town when it comes to exerting influence on interest rates.  That’s a loaded statement, of course, considering we spent last week explaining why mortgage rates often go the  opposite direction from a Fed rate cut/hike.  True to form, rates have generally inched higher since last week’s Fed rate cut. But the Fed will be the first to tell you that their decision-making process is primarily informed by what’s going on in the economy.  On that note, they are on the same footing as the financial markets that determine the day to day changes in rates.  The labor market is a particularly hot topic when it comes to monitoring economic data right now.  The more it looks like it might be weakening, the more keen the Fed will be to keep cutting rates.  Today’s Consumer Confidence report showed the biggest gap in years between respondents who said jobs were plentiful and those who said jobs were hard to get.   After that data came out this morning, the bond market (which dictates rates) began to improve quickly.  Mortgage lenders who began the day by offering slightly higher rates than yesterday were able to issue mid-day changes.  The resulting levels leave the average lender just a hair lower than yesterday.   There will be more potentially important economic data on Thursday and Friday, but the biggest reports hit during the first week of October. 

Building on a prior initiative, the Federal Home Loan Bank of Atlanta is making available $5 million in grants to support efforts to assist owners of heirs’ property.

MV Realty has offered real-estate contracts that call for consumers to trade upfront cash for long-term home sale restrictions, potentially hampering mortgages.