Remax Holdings had net income of $3.7 million, up from $2 million one year prior, but a non-GAAP measure used for the mortgage business showed a near $200,000 increase in losses.

Democrats Ritchie Torres and Gregory Meeks called on the New York Home Loan bank to follow the lead of its peers and use alternative credit scoring models for collateral to improve consumers’ access to homeownership.

Straightforward, Uneventful Session Caps The Correction

Bonds have been in correction mode for almost the entire week.  Early trading on Monday morning was the only exception with the unwinding of the Yen carry trade dominating the action.  But even then, bonds had given up all of the gains by the close of business on Monday and only continued losing ground through the end of the Treasury auction cycle yesterday.  If there’s one day this week that had the best chance of seeing an end to the correction, today would be it.  And it was!  Dare we say this has all been fairly logical, even if Monday’s initial volatility presented a big curve ball?  If things remain logical, the next big move, for better or worse, stands the best chance to find inspiration from Wednesday morning’s CPI data. 

Market Movement Recap

09:47 AM Steady gains overnight and in early trading.  10yr down 5.6bps at 3.936 and MBS up an eighth.

12:48 PM Mostly flat with MBS up 5 ticks (.16) and 10yr down 6bps at 3.934

04:19 PM Gradual leakage in MBS with 5.5 coupons up only 2 ticks (.06).  10yr yields are still down 5.4bps at 3.939

After starting out at the lowest levels in more than a year on Monday morning, mortgage rates had done nothing but increase through Thursday afternoon.  The bounce was abrupt by typical standards with the average 30yr fixed rate rising nearly 0.3% in just 3 days. Friday brought a small amount of relief as the underlying bond market finally leveled off.  Mortgage rates are based on bonds and bonds take cues from several sources.  One key motivation is the level of “supply.”  In other words, “how many bonds are being sold.”  Supply in non-mortgage-specific bonds still has an impact if the bonds are closely related.  Reason being, if investors are compelled to buy lots of bonds, the yield (aka “rate”) generally needs to move higher to garner sufficient demand. This was the case this week as it related to US Treasury auctions.  Mortgage-backed bonds stick to a very similar path compared to their Treasury counterparts.  As such, rates/yields moved higher across the board.  With all that in mind, Friday would have been the least surprising day to see an end to the mini upward spiral in rates because it was the first day without a big new Treasury auction for the week.  It also saw the lowest supply of corporate bond issuance (another category of bonds that can put some upward pressure on rates amid moments of excess supply). In the week ahead, the market’s focus will shift from supply back to economic data.  Next Wednesday brings the release of one of the most important economic reports, the Consumer Price Index (CPI).  This is the first major measurement of inflation for the month of July.  If it confirms the friendly trends established in May/June, it would likely reinvigorate the recent downward pressure on rates seen last week.  But there’s an equal chance the data disappoints to the upside, thus causing further rate increases in the short term.

“How do you tell when you’re out of invisible ink?” How do you tell when interest rates are “where they’re supposed to be?” Arguably, rates, based on supply and demand, are right “where they’re supposed to be” at any given time. The financial press will be blathering on about the Fed (e.g., whether it will cut rates by 25 or 50 basis points) until September 18th. Most would agree that the Fed should be “behind the curve” and right, rather than “ahead of the curve” and wrong. Of course, no one predicted a 2-day refi boom, and rates have moved back up somewhat. But, of course, every company that owned the servicing rights for a given loan reached out, and borrowers took notice. Treasury yields, like the 10-year T-Note’s, came down, and mortgage rates followed, and then went back up. But investors and bond traders have already priced in a Fed rate cut, to a great degree, because everyone is expecting it, so mortgage rates have already also come down. (Today’s podcast is found here and this week’s is sponsored by PHH Mortgage. If you are looking for a Correspondent Lending partner or an experienced, award-winning subservicer who can manage your forward and reverse, residential and commercial, and performing and non-performing loans, look no further than PHH. Today’s has an Interview with TPO Go’s Phil DeFronzo on all things renovation lending and how expanded product guidelines are helping borrowers.) Lender and Broker Software, Products, and Services

Now that it’s essentially over, it’s easy to label this week as a quintessential consolidation and/or modest correction.  In fact, even before it began, last Friday’s lock/float guidance contained a very rare level of conviction for MBS Live when it comes to commenting on the future, saying “there’s likely to be a correction/consolidation ahead of CPI data the following week.”  Weakness was marginally exacerbated by the Treasury auction cycle and it seems we’ve seen some relief as supply moves to the rearview (corporate bond issuance was a bigger-than-expected factor as well with the week generating more than $45bln in new offerings vs expectations for 35-40 bln).  From here, there’s much less of a directional bias in the week ahead. Economic data stands the best chance to set the tone.

The publicly traded firm is also shoring up its sluggish stock and ramping up marketing efforts.

The lender and servicer saw origination volume jump to $6.5 billion as of June 30, up from $3.9 billion the previous quarter.

Moderating interest rates in the first quarter led to changing fortunes from 2022 and 2023, a Transunion report said.

Soaring insurance costs may add to escrowed funds that servicers can earn money on in some cases, but higher premiums also could lead to affordability issues.