Omnichannel mortgage originators were able to grow their market share as singularly focused firms had to retrench, Morningstar DBRS said in a report.

Carbon Copy Day For MBS

The date and underlying events may have changed, but the price action in MBS was strikingly similar.  Prices fell abruptly in the first 2 hours and then reversed at 10am, ultimately making it back near unchanged levels by the afternoon.  Data played more of a role today with ADP and S&P Global PMI adding to the weakness early.  ISM Services PMI was right in line with the S&P version, but it was very different in terms of price/inflation measurements (lowest price index in 4 years).  Fed Chair Powell helped in the afternoon as he maintained that recent econ data is an acceptable bump on the road to rate cuts.

Econ Data / Events

ADP Employment 

184k vs 148k f’cast, 155k prev

ISM Services

51.4 vs 52.7 f’cast, 52.6 prev

ISM Employment

48.5 vs 48.0 prev

ISM Prices

53.4 vs 58.6 prev

Market Movement Recap

08:34 AM Only slightly weaker overnight, but more selling after ADP employment.  10yr up 3.6bps at 4.381.  MBD down 6 ticks (.19).

10:09 AM Additional weakness into ISM data, but bouncing back slightly afterward.  10yr yields are down more than 3bps since the release, but still up 3.6bps on the day at 4.391. MBS now down 6 ticks (.19) instead of 12 ticks (.375) before the data.

12:34 PM Treasuries turning green with 10yr down 0.2 bps at 4.354.  MBS down only 3 ticks (.09).  Powell speech helping.

03:07 PM Best levels of the day with MBS unchanged and 10yr down half a bp at 4.352.

The other night, at the Bruce Springsteen concert in San Francisco (it was great), he did a crowd favorite, singing, “Baby I got my facts learned real good right now, you better get it straight darling: Poor man wanna be rich, rich man wanna be king, and a king ain’t satisfied till he rules everything…” If you want to read a story with words like bullying, harassment, smear, empire, disgusting, and other similar “lyrics,” you can read this tale about Rocket’s Dan Gilbert and UWM’s Mat Ishbia. Not only that, but suddenly everyone is talking about some company called Hunterbrook, not only being tied into a hedge company (which, in theory, can short a stock, publish a negative story later, watch the stock go down, and then cover their shorts and make money) but putting a link into an expletive deleted-filled voice mail from Mat Ishbia to Anthony Casa. As the world turns… more below! Meanwhile, there are constructive things, like today’s L1 show featuring Chris Maloney, Mortgage Strategist with BOK Financial Capital Markets discussing items that impact rates seen by borrowers. (Found here, this week’s podcasts are sponsored by Loan Vision. With Loan Vision, the mortgage banking industry’s premier mortgage accounting solution, you can take your accounting department from “cost center” to “revenue generator,” operating more efficiently and profitably. Hear an excerpt from last week’s Mortgage Matters show presented by Lenders One with MBA President Bob Broeksmit.) Lender and Broker Services, Products, and Software

After starting the week with a sharp move higher, mortgage rates managed to avoid losing much ground yesterday.  This was only achieved with a recovery in the bond market that erased early morning losses (rates are based on bonds and when bonds improve, lenders can update mortgage rates during the day). Today was a strikingly similar pattern.  Bonds had a rough morning thanks to the first few economic reports of the day.  Once again, there was a rate-friendly reversal led by the day’s most important economic report at 10am.  In the current case, gains were also facilitated by friendly comments from Fed Chair Powell during a speech early in the afternoon. Even before the bond market reversal, lenders had only increased rates modestly.  After the reversal, many lenders were again able to offer mid-day improvements that brought the average back within a hair of yesterday’s latest levels. From here, Thursday’s economic calendar is less interesting, but Friday’s jobs report is the biggest potential source of volatility in several weeks.

Bonds remain under pressure this week, but the pressure is turning out to be slightly lower than it was earlier this morning.  Overnight weakness was modest at best, but selling ramped up after the ADP Employment data at 8:15am and again in the 9am hour.  The weakest levels were seen after the 9:45am S&P PMI data.  Both S&P and ISM publish similar PMI data, often on the same day.  ISM is more of a market mover in the U.S. and it told a different story with respect to prices (53.4 vs 58.6 previously).  Bonds approved and have since unwound more than half of the day’s weakness. 

Mortgage application activity drifted lower again last week , the third straight week of mostly fractional declines. The Mortgage Bankers Association’s Market Composite Index, a measure of application volume, decreased 0.6 percent on a seasonally adjusted basis from one week earlier and 0.1 percent before adjustment. The Refinance Index declined by 2.0 percent from the previous week and was 5.0 percent lower than the same week one year ago. The refinance share of mortgage activity slipped to 30.3 percent from 30.8 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index ticked down by 0.1 percent week over week but did move 1.0 percent higher on an unadjusted basis. Purchase activity was 13.0 percent lower than during the same week in 2023.    [purchaseappschart] “Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity. The 30-year fixed mortgage rate declined slightly to 6.91 percent, while the 15-year fixed-rate decreased to its lowest level in two months at 6.35 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week. Refinance applications decreased to fall 5 percent below last year’s pace.”  Other Highlights from MBA’s Weekly Mortgage Application Survey

JPMorgan Chase & Co.’s latest client survey showed that outright short positions in US Treasuries rose to the most since the start of the year in the week leading up to April 1.

But the pace of home price growth between January and February was nearly double the level seen prior to the pandemic.

Despite advancements in AI for transaction monitoring, financial institutions share little in the way of fraud data, undermining efforts to combat crimes including check fraud.

With high deposit and borrowing costs persisting amid the Federal Reserve’s campaign against inflation, lenders face stress on their net interest margins and the potential of troubled loans ticking up.