United Wholesale Mortgage allows the financing to be extended to borrowers with certain medical degrees with low down payments or potentially even none at all.

Economic uncertainty and higher rates in May contributed to the second decline in applications for new homes on an annual basis, reversing March gains

The merger will bolster existing safeguards against AI threats, while providing a tool that should appeal to young homebuyers, leaders of the companies said.

A potential end to the Iran War could lead to economic recovery, suggesting sub-6% rates may be far off as monetary policy discussions take a hawkish tone.

A potential deletion from a long-standing regulatory definition has banks questioning how to classify vast swaths of their lending books.

Perfectly Acceptable Conclusion to a Potentially Volatile Week

With markets closed for the Juneteenth holiday on Friday, Thursday marked the end of the trading week. Considering the sell-off on Wednesday afternoon, the week had the potential to end on an uncomfortably volatile note. Instead, bonds pushed back nicely in the other direction–even though MBS didn’t recoup as much of their losses as 10yr Treasuries. True, there is some sense of foreboding in the inability of 10yr yields to move below 4.42%, but all told, the week was actually surprisingly calm after factoring in Thursday’s gains.

Econ Data / Events

Continued Claims (Jun)/06

1,810K vs 1800K f’cast, 1795K prev

Jobless Claims (Jun)/13

226K vs 225K f’cast, 229K prev

Philly Fed Business Index (Jun)

10.3 vs 10 f’cast, -0.4 prev

Philly Fed Prices Paid (Jun)

53.20 vs — f’cast, 47.90 prev

Market Movement Recap

08:55 AM Bonds recover much of post-Fed sell-ff overnight, but mostly in the long end. 2yr yields lost more ground. 10yr yields are down 5bps at 4.446.  MBS are up just under a quarter point.

10:24 AM MBS up 9 ticks (.28) and 10yr down 6.3bps at 4.434

03:02 PM MBS up 5 ticks (.16) and 10yr down 4.2bps at 4.454

Builder sentiment slipped again in June as elevated mortgage rates, higher material costs and ongoing affordability pressures continued to weigh on the housing market. The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell two points to 35 , marking the 14th straight month the index has remained below 40. The latest reading underscores how far confidence remains from more durable levels. A streak that long below 40 has not been seen since 2011-2012 , when the market was still dealing with the fallout from the foreclosure crisis. All three major components of the index were either lower or unchanged. Current sales conditions slipped two points to 38 , while sales expectations over the next six months held steady at 45 . Traffic of prospective buyers remained unchanged at 25 , suggesting demand is still soft despite the start of the summer selling season. “With the nation short about 1.2 million homes, builder sentiment will remain soft until barriers are eased and conditions improve for home building,” said NAHB Chairman Bill Owens. He said Congress could help by advancing the major housing package now before the Senate, along with legislation aimed at easing labor shortages and protecting access to natural gas in new homes. NAHB Chief Economist Robert Dietz said regulatory and policy costs continue to make it harder for builders to add supply. He pointed to a new NAHB study showing that government regulation, taxes, fees and other costs add more than 26% to the price of an average single-family home, arguing that easing permitting delays, density limits and zoning restrictions would help reduce costs.

Mortgage applications pulled back last week as rates moved around in response to fresh inflation data and shifting geopolitical headlines. The Mortgage Bankers Association (MBA) reported a 3.8% decline in total application volume on a seasonally adjusted basis for the week ending June 12. Refinance activity accounted for much of the slowdown. The Refinance Index fell 5% from the previous week, though it remained 17% above the same period one year ago. Purchase demand also softened, but has generally done a better job of holding near multi-year highs. The seasonally adjusted Purchase Index decreased 3% week over week and was 3% higher than a year ago. “Last week’s CPI data showed that inflation continued to move higher, putting upward pressure on rates early in the week, but growing optimism regarding the opening of the Strait of Hormuz brought rates down again by the end of the week,” said Mike Fratantoni, MBA’s SVP and chief economist. He said the net effect was a drop in both purchase and refinance activity, with purchase applications still modestly ahead of last year’s pace and conventional purchase volume showing stronger growth than government lending. Refinance share of mortgage activity edged up to 40.3% from 40.2%, while the ARM share slipped to 8.5% from 8.6%. Government-backed application shares were mixed. FHA share increased to 17.5% from 17.4%, while VA share declined to 12.9% from 13.4%. USDA share was unchanged at 0.4% .

Mortgage rates spiked yesterday after the Fed announcement. The primary driver was the Fed’s revised outlook for potential rate hikes later this year. Because the Fed Funds Rate governs ultra-short-term transactions (24hrs or less), it has the biggest impact on the shortest-term debt and a diminishing impact on longer term debt. While the typical mortgage may be ABLE to last for 30 years, in practice, the average mortgage length (due to refinances and sales) is a moving target assumed to be around 5 years. That’s helping us today.  Shorter-term debt is still having some indigestion over Fed day, but longer-term debt has recovered more of yesterday’s losses. Top tier 30yr fixed rates are about halfway back to yesterday’s pre-Fed levels for the average mortgage lender and in the lower-middle of the range seen since mid-May.

Lots of people who bought cars during the pandemic are deeply underwater on those vehicles, meaning the amount they owe is considerably higher than the actual value of the vehicle. Among car buyers who traded in a car to buy a new one, 30 percent had negative equity on their trade-in, owing an average of $7,200. One thing that may have caused the surge is the emergence of the 84-month (seven year) car loan; 42.6 percent of underwater buyers had an 84-month loan, about double the level of a decade ago. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Truework, the one verification solution to replace in-house waterfalls. Verify any borrower with a VOIE solution that automates the entire process to quickly deliver the most accurate and complete reports with broad GSE coverage. Hear interview with National Consumer Reporting Association’s Eric Ellman on the nomination of Brian Johnson to lead the Consumer Financial Protection Bureau, based on his extensive experience in financial services regulation and his understanding of how to balance consumer protection with access to credit, mortgages, and housing.) Broker and Lender Products, Software, and Services Borrower outreach isn’t broken. The experience is. Most servicers have no shortage of communication channels. The challenge is creating a connected experience that helps borrowers understand their options and the next steps. Clarifire’s latest blog explores where communication breaks down during default servicing, why early delinquency engagement matters, and how workflow automation can reduce confusion, improve responsiveness, and drive better outcomes for both borrowers and servicing teams. Discover how connected workflows, intelligent intake, and self-service tools can improve borrower engagement and servicing outcomes. Read “Closing the Borrower Communication Gap” at eClarifire.com, where Brighter Automation® creates better outcomes.