The decision was announced shortly after industry players commented on the Federal Housing Finance Agency’s proposed expansion of the document’s use.

Purchase volumes reached their highest level since early May, but current numbers sit 30% lower than where they were a year ago, the Mortgage Bankers Association said.

A subsidiary pushed its tender offer to buy outstanding shares by June 27 further out after a small percentage of stockholders failed to accept by the original expiration date.

Modest Relief Rally as Headline Risk Comes and Goes

Unlike yesterday, bonds didn’t have any market moving economic reports to provide guidance in the morning.  Instead, traders were a bit apprehensive ahead of the SINTRA conference in Europe as the heads of the world’s two largest central banks were slated to comment on monetary policy (jargon translation: “headline risk”). As the headline risk faded (Powell and Lagarde didn’t say anything too scary), bond buyers filed back into the market, ultimately ushering yields to new lows in the afternoon hours.

Econ Data / Events

Wholesale Inventories

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Market Movement Recap

09:57 AM Slightly stronger overnight, but losing some ground into domestic hours.  10yr still down 2.2bps at 3.75.  MBS still up 2 ticks (.06).

12:11 PM Best levels of the day.  MBS up nearly a quarter point.  10yr down 4.3bps at 3.729.

01:09 PM Reasonably strong 7yr auction.  10yr yield down 5.5bps at 3.717.  MBS up 6 ticks (.19).

03:56 PM Sideways at the same levels from the last update.  MBS up 6 ticks (.19) and 10yr yields down 5.5bps at 3.717.

The bond market is waiting for bigger news on inflation and the economy, and traders aren’t pretending otherwise.  Why does that matter?  Traders determine the prices/yields of bonds which, in turn, determine day to day changes in mortgage rates.  At the moment, a debate is calmly raging among economists and pundits regarding the fate of inflation and economic growth.  The lower those things are, the lower rates will be.  The problem is that a majority of economists and pundits thought the Fed’s aggressive monetary tightening efforts would have already precipitated more progress on those fronts.  Instead, the economy has been more resilient than expected and inflation more persistent.   Inflation proponents continue crying wolf, and while the wolf may be real, half of the village is paying attention while the other half go about business as usual.  Once most of the village is on the same page, or even heading in that direction, rates should be making bigger moves. As for today, it was just another in the seemingly endless sea of summertime weekdays with little excitement in the bond market.  The average lender is very close to the same levels offered yesterday.

As the U.S. faces nationwide flight delays, one must ask if there are processes in place for the FAA to deal with them. “Trust the process” is a common thing to hear, but attorney Brian Levy reminds us of why process is important in the actions of government in light of the FHFA’s rescinded DTI pricing. The CFPB knows a thing or two about the process, and the Consumer Financial Protection Bureau issued an order against Nebraska’s ACI Worldwide and one of its subsidiaries, ACI Payments, for improperly initiating approximately $2.3 billion in unlawful mortgage payment transactions. ACI’s data handling practices negatively impacted nearly 500,000 homeowners with mortgages serviced by Mr. Cooper (formerly known as Nationstar). “By unlawfully processing erroneous and unauthorized transactions, ACI opened homeowners to overdraft and insufficient funds fees from their financial institutions. Today’s order requires ACI, among other things, to pay a $25 million civil money penalty.” (Today’s podcast can be found here and is sponsored by Visio Lending. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Through its top-rated Broker Program, Visio brokers can earn up to 5 percent. Hear an interview with Visio Lending’s Jeff Ball on all things rental lending and debt service coverage ratio – DSCR – lending.) Lender and Broker Services, Products, and Software

Unlike yesterday, there is no meaningful economic data to move the needle this morning.  Bonds continue biding their time, waiting for “meaningful.”  Until then, technicals and tradeflows are driving what little amount of movement there is.  Today’s version happens to be slightly stronger.  It could just as easily have been slightly weaker.  
The modest gains mean that yields are once again attacking the lower boundary of the prevailing range at 3.72.  We’ll believe in a breakout when we see one that sticks.  Technicians assume a friendly breakout is slightly more likely due to the positive momentum shift that’s always implied when bonds flat-line after spiking.  Technicians should keep in mind that–even though

In light of yesterday’s strong report on new home sales and the earlier marginally improved one on pre-owned home sales, mortgage application volumes could indicate that the spring real estate market didn’t actually evaporate. Maybe it’s just running a little late. For the third straight week, mortgage applications rose , not enough to overcome its big, long running deficit, but a welcome sign of life.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 3.0 percent on a seasonally adjusted basis from one week earlier. This despite a four-day business week to the Juneteenth observance. On an unadjusted basis, the Index declined 8.0 percent compared to the previous week. The seasonally adjusted Purchase Index rose 3.0 percent, also a third straight gain and was 21.0 percent lower than the same week one year ago. The Refinance Index was up 3.0 percent from the previous week and was 32.0 percent lower than the same week one year ago. The Purchase and Refinances Indices each fell back 8.0 percent on an unadjusted basis. [purchaseappschart] Refinance applications accounted for 27.2 percent of the total. That share was 26.9 percent the prior week. [refiappschart] Joel Kan, MBA’s Vice President and Deputy Chief Economist said, “Mortgage rate changes varied across loan types of last week, with the 30-year fixed rate increasing slightly to 6.75 percent. The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate. To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate,” he said.

The watchdog claims that during internal testing, the company illegally processed $2.3 billion in mortgage payments.

But the annual rate of change turned negative for the first time in 11 years, according to the Case-Shiller index.