The net proceeds will be used to pay down borrowings on a credit line secured by its mortgage servicing portfolio.

Strategies used to falsify identities and property ownership highlight a public assistance vulnerability that could have implications for the mortgage industry.

A national gauge of prices climbed 0.2% in November from October, according to seasonally adjusted data from S&P CoreLogic Case-Shiller. That’s slower than the 0.6% monthly gain in October.

Over 70 loans were allegedly sent to competitors by the independent mortgage banker, a suit filed by UWM alleges.

Two Harbors, which also reported a gain in comprehensive income, recently completed an acquisition that made it the eighth largest conventional servicer.

Nice bounce back after AM Weakness

Job openings came in higher than expected this morning and immediately pushed bonds into weaker territory.  Fortunately, it wasn’t that big of a beat and bonds bounced back gradually by the end of the day.  That’s not to say all eyes were on data all day.  If anything, month-end trading and positioning considerations ahead of tomorrow’s events are just as relevant.  Those events include Treasury’s final quarterly refunding announcement in the AM and the Fed in the afternoon.  While we always need to be ready for big moves after the Fed, it’s hard to imagine what this announcement could do to be anything other than predictable.  The only wild card is a discussion on future changes to quantitative tightening in Powell’s press conference.  

Econ Data / Events

Case Shiller Home Prices (y/y)

5.4% vs 5.8% f’cast, 4.9% prev

FHFA Home Prices (y/y)

6.6% vs 6.3% prev

Job Openings (via JOLTS)

9.026m vs 8.750m f’cast, 8.925m prev

Market Movement Recap

09:35 AM Stronger in Asia. Weaker in Europe and now bouncing back.  10yr down 2.7bps at 4.05.  MBS up 1 tick (.03).

10:13 AM Some weakness after JOLTS.  10yr unchanged at 4.078.  MBS down 2 ticks (.06).

12:19 PM Decent recover off weakest levels.  10yr roughly unchanged at 4.074.  MBS down 3 ticks (.09).

02:48 PM Back into positive territory ahead of the 3pm CME close.  10yr yield down 1.8 bps at 4.06.  MBS up 1 tick (.03).

Mortgage rates inched gently lower yet again today.  That’s the 4th day in a row without moving higher, but it’s just as fair to say rates have been broadly sideways for the past two weeks after moving up from 7 month lows seen in late December. Volatility has generally been muted as the market waits for bigger ticket data and events.  One event that always classifies as potentially major is the Fed’s scheduled policy announcement tomorrow afternoon.  Indeed, some of the biggest swings in rates have been inspired by Fed days. It’s quite common and also a mistake to view the big rate reactions as having anything to do with the Fed announcing a rate hike or cut.  If someone asks you tonight: “so… you think the Fed’s gonna cut mortgage rates tomorrow?” they are misguided on two levels. First off, the Fed doesn’t directly set mortgage rates.  The Fed sets the Fed Funds Rate, which applies to the shortest possible time frames.  Mortgage rates apply to mortgages that last years (even after accounting for average sale/refi time).  Obligations measured in years behave differently when compared to overnight obligations such as those subject to the Fed Funds Rate. Secondly, the Fed will most certainly neither hike nor cut rates tomorrow.  This is as much of a certainty as anything in the future ever is in the world of interest rates.  If the Fed is to have an impact on mortgage rates tomorrow, it would only be due to the market’s interpretation of comments pertaining to the future.  The text of the official announcement is an unlikely venue for such comments, so they could only come from the 2:30pm press conference with Fed Chair Powell.

The Job Openings and Labor Turnover Survey (JOLTS) didn’t used to matter to the bond market.  That changed rather abruptly in the past 2 years as markets searched for clarity surrounding the unique post-covid labor market reality.  On some occasions, JOLTS has hit harder than the big jobs report itself.  Today’s reaction is obvious, but not huge with slightly stronger job openings erasing overnight gains in Treasuries and taking MBS into modestly weaker territory.  Despite the victory for the opposing team, bonds can still point to the scoreboard for the past week and a half.

“What do hospital gowns and insurance policies have in common? You’re never covered as much as you think you are.” Although loan officers are not insurance experts, they are seeing the escalating cost of homeowner’s insurance impact affordability. (Last Friday’s TMC show focused on why insurance costs are rising.) Insuring homes is not the only issue, however. The average bill for the repair of an American vehicle is $4,437, and for an electric vehicle that is up to $6,618, about 49 percent higher. Collision insurance claims have increased 64 percent between 2018 and 2022, fueled by increasingly sophisticated cars and more complicated things that need to get fixed when they get broken. No longer are we just hammering out dents, but rather we’re taking computers out of the car and fixing it. Insurance costs may be on the agenda (the why’s mortgage rates certainly will be) when the California Association of Mortgage Professionals (CAMP) presents the 2024 Economic Forecast today with Dr. Michael Frantanoni and yours truly at 1PM ET/10AM PT. (Today’s Commentary podcast can be found here and this week’s is sponsored by Calque. With The Trade-In Mortgage powered by Calque, lenders help their clients negotiate a lower purchase price, reduce their interest payments, and eliminate PMI. Hear an interview with Polly’s Troy Coggiola on the evolving capital markets landscape and his new role at the company.) Lender and Broker Software, Products, and Services

A potential buyer with a budget of $3,000 per month for their payments is now able to afford an approximately $453,000 home.