Consumer appetites for new loans have slowed in the face of record interest rates, but Sunlight Federal Credit Union’s partnership with Avana Capital helps identify commercial real estate opportunities in markets both local and national.

The seizure of servicing from Reverse Mortgage Funding’s bankruptcy has had ripple effects ranging from a private legal challenge to broader policy changes.

The association is grappling with potentially existential threats as major brokerages pull out of the group and a set of lawsuits threatens to squeeze the association and its members.

Freddie Mac’s survey finds the 30-year fixed loan dropped 3 basis points, but Zillow’s tracker showed since the FOMC announcement, they dropped 30 basis points.

Some of the lender and servicer’s systems are offline following the attack on Oct. 31.

Tough Afternoon For Lock vs Float Decisions

Even yesterday, we were already trying to reconcile the size of the bond rally relative to the underlying motivations.  Then the rally picked up steam this morning despite a lack of truly compelling justifications in the economic data.  While there are ways to explain the apparently outsized rally, it is certainly bigger than it needs to be ahead of the jobs report.  That begs the question: does the market see/know/feel something that suggests a big picture corner has been turned?  All we can really know is that the entirety of the past 3 weeks offer the most compelling potential top we’ve seen in rates since late 2022.  That could be because a top is taking shape or simply because this is the most convincing trap yet.  It’s not overly dramatic to say that the jobs report will cast a vote on the “realness” of this rally (if it falls far enough from forecast) and the result will be rates that are quite different than Thursday’s, for better or worse.

Econ Data / Events

Jobless Claims

217k vs 210k

Continued Claims

1.818k vs 1.8k f’cast, 1.783k prev

Labor Costs Q3

-0.8 vs 0.7 f’cast, 3.2 prev

Market Movement Recap

08:52 AM Stronger overnight with additional gains after data.  10yr down 10.2bps at 4.632.  MBS up half a point.

12:02 PM Off the morning’s best levels, but still stronger.  10yr down 6.5bps at 4.669.  MBS up 3/8ths

01:13 PM Weakest levels of the day.  10yr down 3.7bps at 4.697.  MBS still up on the day, but down about a quarter point from highs.

03:19 PM Off the weakest levels and fairly flat in the PM.  MBS up just over a quarter point.  10yr down 6.2bps at 4.672.

The stratification of rate offerings between lenders is very high due to rapid changes over the past few days and weeks.  On average, top tier conventional 30yr fixed rates have fallen more than 3/8ths of a percent since Tuesday afternoon.  You’d have to go back to the days following the failure of Silicon Valley Bank in March to find a bigger drop in mortgage rates over a 48 hour time frame.  That is quite something and perhaps even a bit of a puzzler given the underlying data and events driving the current move. To be fair, we can talk about several important reasons for the rate movement, but suffice it to say that if we had to guess how the underlying events would affect rates without actually getting to see the move in rates, our guess would have been much smaller. All of that may be at moot point because Friday’s jobs report will now serve as a deciding vote on whether the rate rally was/is overdone.  At least it CAN serve as that deciding vote if the numbers come in far enough from forecasts. The bond market (which dictates rates) has a long history of volatile reactions to certain economic reports and the jobs report is certainly the most reliable in that regard.  Although the unemployment rate is the easiest number in the report to understand from a logical standpoint, it’s actually the count of nonfarm payrolls (NFP) that carries the most weight. Economists expect NFP to come in at 180k.  Sometimes the consensus is very close to reality.  Other times, reality can “beat” or “miss” by 100k or more.  In the case of a big miss (NFP under 100k), it’s fair to expect the recent rate rally to hold its ground or go even farther.  In the opposite case (NFP closer to 300k), much of the progress seen over the past 2 days could be wiped out in a matter of minutes.

The resolution ends the firm’s brief challenge to feds over its designation to utilize more flexible underwriting as it meets underserved borrower thresholds.

Rithm Capital Corp.’s plan to acquire Sculptor Capital Management hit another hurdle Wednesday when four former executives sued the hedge fund firm, alleging the transaction would wipe out more than $127 million of shares they own.

Close to 100 employees including the co-founders of Follow Up Boss will transition to the acquiring company.