Marshall is handing his role as president at the mortgage firm to another industry veteran but plans to retain some involvement with its new MSR fund.

The House Ways and Means Committee is marking up the bipartisan legislation that would restore a 12.5% boost to the program’s availability.

A common concern in housing finance reactions has been the lack of accommodation for strategies routinely used to manage credit, rate and liquidity exposures.

Bidding wars are also coming back into play in several markets across the country, with the Northeast, in particular, seeing increased activity, according to Redfin.

So far, 2024 has been distinctly different from the end of 2023. November and December saw rates move lower at one of the fastest paces in decades. In contrast, January has delivered a fairly consistent uptrend with the average lender now at the highest levels in more than a month. Frustratingly, widespread media coverage suggested rates fell to their lowest levels since May this week.  Rest assured, this is NOT the case. It wasn’t even the case last week, although that the claim would have been less frivolous last week.   The source of the confusion is Freddie Mac’s weekly survey which is the longest-running and most widely cited mortgage rate index overall.  While there are a few reasons that it doesn’t always line up perfectly with reality, the biggest issue is really the lag effect resulting from the survey’s timing and methodology. Freddie takes an average of rate quotes on Thursday through Wednesday and reports that a day later.  In other words, Thursday January 11th through Wednesday January 17th is this week’s survey time frame.  The 11th and 12th were the two best days of the past 2 weeks.  They dragged the average down.  Thursday and Friday of the current week have seen the highest rates in more than a month.  They are NOT included in Freddie’s survey. Here’s a comparison between the Freddie survey rate and the more timely MND daily index.  As always, the best way to use a chart like this is to compare the movement in the lines, because outright rates themselves can be affected by multiple factors.

Negative Trend Intact For Now

January has marked a modest but noticeable shift in bond market momentum and Friday provides the latest evidence.  While we’re content to view most of the recent weakness as a logical byproduct of decent economic data, there’s certainly also an element of momentum that seems to be in play.  Friday’s evidence comes in the form of selling pressure that began right at the 8:20am CME open.  The 10am econ data added to the selling, but it has since been shaken off.  We’re left with modest weakness heading into the mid-day hours, but  yields are nonetheless at their highest levels in more than a month.

Econ Data / Events

Existing Home Sales

3.78m vs 3.82m f’cast, 3.82m prev

Consumer Sentiment

78.8 vs 70.0 f’cast, 69.7 prev

1yr inflation expectations

down 0.2%

5yr inflation expectations

down 0.1%

Market Movement Recap

10:10 AM 10yr yields are now up 5bps to the highs of the day at 4.192 and MBS are down 6 ticks (.19).

02:02 PM Bouncing back into the PM hours.  10yr now up only 1.7bps at 4.159 and MBS down 3 ticks (0.09).

03:44 PM Holding modest losses into the close.  10yr up less than 1bp at 4.149.  MBS down 2 ticks (.06).

04:52 PM Squeaking into positive territory after hours.  10yr down 1.8bps at 4.124.  MBS showing a 1 tick (.03) loss, but it’s actually more like a tick or two of an improvement after accounting for illiquidity.

January has marked a modest but noticeable shift in bond market momentum and Friday provides the latest evidence.  While we’re content to view most of the recent weakness as a logical byproduct of decent economic data, there’s certainly also an element of momentum that seems to be in play.  Friday’s evidence comes in the form of selling pressure that began right at the 8:20am CME open. 

The 10am econ data added to the selling, but it has since been shaken off.  We’re left with modest weakness heading into the mid-day hours, but  yields are nonetheless at their highest levels in more than a month.

If you’re in Chicago, the newest attraction is “the rat hole.” Here in Denver, besides the cat I saw in the airport yesterday being walked on a leash, one attraction is the National Ice Core Lab, where, you guessed it, ice sample cores from all over the world are kept for research purposes at temperatures even colder than those outside. It is around this time of year when plenty of people think about vacations or moving to warmer places… Like Phuket in Thailand. In 2023 it saw 6.24 million airport arrivals, up 88 percent from 2022, and the real estate market is booming. The island has 26 beaches and a population of 420,000. Phuket is trying to move away from over-reliance on tourism by simply selling to wealthy outsiders, often Russians: 27,000 Russians have moved to Phuket in the past 12 to 18 months, fueling a development boom. Follow the money, right? Today’s podcast can be found here, and this week’s is brought to you by nCino, makers of the nCino Mortgage Suite for the modern mortgage lender. nCino Mortgage Suite’s three core products (nCino Mortgage, nCino Incentive Compensation, and nCino Mortgage Analytics) unite the people, systems, and stages of the mortgage process. Today’s features an interview with Polunsky Beitel Green’s Marty Green on mortgage spreads, why 2024 is a year of transition in the mortgage industry, and potential ramifications of NAR lawsuits. Lender and Broker Services, Products, and Software Anchor Loans Launches TPO Broker Channel for Flip, Bridge, New Construction and Rental Investment Financing! With so many banks and private lenders scaling back on fix and flip and construction lending, house flippers and builders are turning to mortgage brokers and other intermediaries to help identify reliable sources of capital. National private lending leader Anchor Loans has stepped up to launch a new Third-Party Originator (TPO) Broker Channel to serve loan brokers and other third-party originators whose clients are the real estate investors and developers building and refurbishing homes for America’s buyers and renters. With 25+ years in business, $14B+ in loans funded to date and expert teams lending in 48 U.S. states, Anchor offers flexible loan programs, experience-based pricing, $100k to $10MM loan amounts, fast funding, and a speedy draw process. Mortgage brokers and loan originators can learn more here.

If the presumed Republican nominee regains the White House and his party takes control of Congress, investors are betting the conservatorships will finally end.

All of the class actions will be consolidated into a single case under plaintiff Jennifer Cabezas, who was the first of the 20 to bring a motion against the company.