Former Trump administration officials Steven Mnuchin and Joseph Otting are headlining an investment group that’s seeking to rescue the troubled Long Island lender. Otting is expected to serve as CEO, and Mnuchin will have a board seat.

Argyle, which helps lenders verify income and employment data, completed a $30 million funding round led by a Rockefeller Capital Management innovation fund, bringing its funding since the firm’s formation to more than $100 million.

Uneventful Gains Despite Apparent Market Movers

It was an interesting day for the bond market.  Yields dropped to the lowest levels in more than 3 weeks amid several apparently valid motivations.  But upon closer inspection, most of the improvement happened far enough away from those motivations to give them much credit.  On a day with JOLTS (job openings data) and a Powell testimony, the most obvious market mover was a series of headlines and trading halts surrounding NYCB, although those ultimately canceled each other out.  We’re left with modest but important improvement ahead of Thursday’s ECB announcement and Friday’s jobs report.

Econ Data / Events

ADP Employment

140k vs 150k f’cast, 107k prev

Job Openings

8.863m vs 8.9m f’cast, 9.026m prev

Market Movement Recap

09:00 AM Sideways to slightly weaker overnight, but gains kicked in at 7am.  10yr down 2.8bps at 4.123.  MBS up an eighth.  ADP and Powell’s prepared remarks doing no damage.

10:01 AM Minimal reaction to JOLTS.  10yr down 4.7bps at 4.104.  MBS up 9 ticks (.28).

12:31 PM Gains on NYCB circuit breaker at 11:53am ET.  MBS up 10 ticks (.31).  10yr down 6bps at 4.092

02:50 PM Some volatility surrounding NYCB headlines.  MBS off highs, up a quarter point on the day.  10yr down 4.3bps at 4.108.

Conventional 30yr fixed mortgage rates in the high 6 percent range have been available months now, and that didn’t change in the past few weeks when rates moved up from longer-term lows.  But the high 6 percent range was the exception during this time. As of today, the average top tier 30yr fixed rate is once again under 7% (6.97% to be precise).  That means many borrowers will be seeing quotes of 7 to 7.125% for top tier scenarios while some will see 6.875%.  As always, keep in mind that a top tier scenario assumes 780+ credit scores and at least 20% down in the case of purchases. The factors underlying the mortgage rate recovery are the same as the factors that drove rates higher 3 weeks ago: economic data. Back on February 13th, higher inflation data caused rates to spike.  There wasn’t much by way of meaningful data in the 2 weeks that followed, but since last Thursday, the data has been relatively rate-friendly.  It’s taken the combination of multiple reports to undo the damage done by a single dose of inflation data on the 13th, but on Friday, we’ll get a report that is just as much of a potential market mover. The catch regarding Friday’s big jobs report is that there’s no way to know if it will live up to its market moving potential NOR if it will be bad or good for rates.  

Here in Southern California, there are plenty of swimming pools and tennis courts, but none of them belong to me. Under the header of, “Why didn’t I think of this?,” enter an address of where you live, or where you’re visiting. (I never enter my actual address.) Find a nearby pool, pickle ball, tennis, hoops, a party deck… to rent out! Or rent yours out. If I had thought of it, I could sit back and collect a slight commission from each transaction, 24/7. But the continued message here in Southern California at the L1 event is that you don’t need to be overly clever to make money, just disciplined. Mike McAuley gave a presentation yesterday, focused on companies that he and Joe Garrett saw make money last year. Included are a flat organizational structure, pick a CFO or Controller (one is all you need), aggressive cost cutting and renegotiations of contracts, relentless focus on operational efficiencies, offer niche or unusual products like manufactured housing, hard money loans, ARMs for local banks, and construction/perm loans. (Found here, this week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with ALTA’s Chris Morton on Attorney Opinion Letters and unregulated title insurance.) Lender and Broker Services, Products, and Software What clues does the current mortgage landscape hold for the future? Dig into the latest ICE Mortgage Monitor for critical intel on the data and metrics shaping 2024 for the real estate and housing finance industries. The complimentary monthly report and webinar feature expert analysis of key trends based on our vast housing data assets. If you’re looking for valuable market insight you won’t find anywhere else, you’ve found it. Don’t wait… The market won’t. Sign up now to receive the reports and monthly webinar invites.

It’s understandably nerve-wracking for fans of low rates to see a congressional testimony from Fed Chair Powell on the calendar.  Granted, some of those fans may not be familiar with the Humphrey Hawkins speeches, but others will remember times that they resulted in significant movement in rates.  With the lion’s share of rate movement being “lower” in the past 5 days, it would also make sense to worry that Powell might say something to derail that momentum.  But the fact is that the bigger picture momentum remains mostly dependent on what the economy does.  The Fed’s policy response to the economic data is on a fairly tight leash (i.e. their conditions for cutting/holding/hiking are well understood by markets).  With that in mind, today’s only big ticket report is JOLTS at 10am ET.  The ADP data out earlier this morning did no damage, nor would we have expected that based on the 140k vs 150k result.

Whether prompted by a tiny improvement in mortgage rates or the first stirrings of a spring market, mortgage activity reversed course last week. The Mortgage Bankers Association (MBA) reports that its Market Composite Index, a measure of application volume, increased 9.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12.0 percent. The Refinance Index gained 8.0 percent during the week ended March 1, trailing the same week in 2023 by 2.0 percent. The refinance share of mortgage activity decreased to 30.2 percent from 31.2 percent the previous week. [refiappschart] The index measuring purchase applications jumped 11,0 percent higher on a seasonally adjusted basis and 13.0 percent before adjustment. The index was 8.0 percent lower than the same week one year ago. [purchaseappschart] “The latest data on inflation was not markedly better nor worse than expected, which was enough to bring mortgage rates down a bit, with the 30-year fixed mortgage rate declining slightly last week to 7.02 percent,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Mortgage applications were up considerably relative to the prior week, which included the President’s Day holiday. Of note, purchase volume – particularly for FHA loans – was up strongly, again showing how sensitive the first-time homebuyer segment is to relatively small changes in the direction of rates. Other sources of housing data are showing increases in new listings, which is a real positive for the spring buying season given the lack of for-sale inventory. “

Many other organizations have turned to sales of this asset class in order to enhance cash flow or liquidity.

Top banking regulators reaffirmed their commitment to bolstering the Community Reinvestment Act despite a court challenge, emphasizing their personal dedication to seeing the rule implemented.

Continued failure to bring Fannie Mae and Freddie Mac out of conservatorship will lead to see-saw mortgage policy every time the White House changes hands, which is against the intent of the GSE statutes that indicate a desire for stable secondary markets, writes the Principal at public affairs firm TVDC.