The Consumer Financial Protection Bureau has seen excessive property-inspection charges, fees that loan mods should eliminate and improper line-item labels.

The massive mortgage business saw a first quarter profit mitigated by nearly $300 million in hedging losses.

Michael Tannenbaum, whose experience in the financial services industry spans over 15 years, has a track record of helping companies scale and grow.

A majority of consumers earning more than $100,000 annually said they were concerned about their own ability to purchase a home, demonstrating how affordability issues are impacting those at many socioeconomic levels, the University of Michigan study found.

The nonbank’s results add to other indications that the first quarter’s “higher for longer” rate scenario had an upside for efficient servicing operations.

The average mortgage lender was able to offer conventional 30yr fixed rates that were very close to yesterday’s levels despite bond market movement that suggested a bigger spike.  In a vast majority of cases, if the bond market is in weaker territory compared to the previous day, rates will be higher in proportion to that weakness. In today’s case, rates moved higher by an arguably insignificant 0.01% on average.  Bonds suggested the increase should be more like 0.03-0.05%.  Lenders were able to hold the line due to the timing of yesterday’s bond market improvement and the fact that it was not fully priced in to rate offerings. In other words, if mortgage lenders were painters, they got a delivery of some nice new paint yesterday but didn’t have time or inclination to get it all on the canvas.  Now today, some of that paint has gone missing, thus leaving the big picture to look almost exactly like yesterday’s.

Uneventfully Weaker Regardless of Durable Goods Data

Bonds were weaker in the overnight session on a combination of anxiety over potential sales of US Treasuries in Japan and European economic data.  The domestic session brought actual selling of US Treasuries in the form of the 5yr Treasury auction, but the market already knew about that one.  The auction was reasonably well received and had no impact on trading levels.  Earlier in the morning, Durable Goods came out right in line with expectations and also had essentially no impact.  Overnight weakness was maintained throughout the day with most of the momentum being sideways near recent highs yields. 

Econ Data / Events

Durable Goods 

2.6 vs 2.5 f’cast
last month revised from 1.3 to 0.7

Durables, excluding defense and aircraft

0.2 vs 0.2 f’cast
last month revised from 0.7 to 0.4

Market Movement Recap

09:06 AM Weaker overnight and little-changed after AM econ data.  10yr yield up 4.1bps at 4.644.  MBS down 6 ticks (.19).

10:51 AM Weakest levels.  MBS down 7 ticks (.22) and 10yr up 5.6bps at 4.657

01:04 PM Boring 5yr auction.  No major reaction.  MBS down 5 ticks (.16).  10yr up 4.8bps at 4.649.

03:55 PM Roughly unchanged from the last update and mostly flat since the late AM hours.

Sometimes you just have to “risk it for the biscuit.” Capital markets are, for the most part, a little more complicated than, say, a recipe for next level dark chocolate brownies with salted caramel. Occasionally the topic of LOs or brokers being able to lock a loan, any time, any day, comes up. The New York Stock Exchange, owned by Intercontinental Exchange (ICE) has started polling market participants on their interest in and potential implications of an exchange that trades stocks 24/7. The polling underscores growing interest in trading stocks in off-hours. Could MBS be far behind? The survey comes after 24 Exchange, backed by Steven Cohen’s Point72, applied with the Securities and Exchange Commission to start the first 24-hour exchange. The prospect of 24-hour trading, which would likely lead to changes across the ecosystem, becomes a heavier lift for exchanges as they’re supervised by the SEC. Found here, this week’s podcasts are sponsored by Calque. With The Trade-In Mortgage powered by Calque, homeowners can buy before they sell, make non-contingent offers, and tap their home equity to fund the down payment on their next home. Today’s has an interview with Michael Bremer and Peter Kallodaychsak on interactions between lenders and Realtors in the wake of the proposed NAR settlement. Lender and Broker Products, Software, and Services Down Payment Resource’s Q1 2024 Homeownership Program Index (HPI) report reveals the largest annual jump in programs since it began tracking data in 2020, with 2,373 DPA programs now available nationwide. That’s 204 more programs than Q1 2023, a 9 percent YoY increase. DPR also noted that there’s at least one program in every U.S. county and 10 or more programs available in 2,000 counties, making it highly likely DPA could boost homeownership for borrowers in your footprint. The report also documents increases in programs for manufactured housing and multi-family purchases. Lenders are reminded that DPR is a software company, with a suite of tools to help you operationalize DPA to better serve your customers and lower your declines, especially among LMI buyers. Read the full report or schedule a demo to learn more.

The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of mortgage loan application volume, fell back for the first time in three weeks during the week ended Aril 19 as interest rates continued to rise.  The Index declined 2.7 percent on a seasonally adjusted basis from one week earlier and was 2.0 percent lower before adjustment. The Refinance Index decreased 6.0 percent from the previous week and was 3.0 percent higher than the same week in 2023. The refinance share of applications was also down, declining to 30.8 percent from 32.1 percent the previous week. [refiappschart] The seasonally adjusted Purchase Index decreased 1.0 percent, the fifth decline in the last six weeks. The unadjusted Purchase Index did increase fractionally but was 15 percent lower than during the same week one year ago. [purchaseappschart] “Mortgage rates continued to move higher last week, reaching their highest levels since late 2023 and putting a damper on applications activity. The 30-year fixed rate increased for the third consecutive week to 7.24 percent, the highest since November 2023,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “ Purchase applications declined, as home buyers delayed their purchase decisions due to strained affordability and low supply. T he ARM share of applications increased to 7.6 percent, consistent with the upward trend in rates, as buyers look to reduce their potential monthly payments.”

The bond market has been decidedly more sideways after hitting longer-term yield highs last Tuesday.  10yr Treasuries have been a relatively narrow range since then, mostly respecting a ceiling of 4.65 and a floor of 4.57.  The first two days of the week saw yields start near the ceiling and improve by the close.  We’re starting near the ceiling again today but so far, we haven’t been as quick to rally.  

Weakness began in the overnight session on a combination of factors.  Tensions remain high heading into the Bank of Japan announcement (after the close on Thursday).  Concerns center on the prospect of official selling of Treasuries in order to defend against additional weakness in Yen/USD exchange rates.
Losses continued after strong IFO data in Germany with some spillover between European and US yields.  
In general though, US yields have been trending gradually higher since hitting the lows yesterday afternoon.  Neither the IFO data, nor the U.S. Durable Goods reaction have caused much deflection.

The afternoon’s key event is the 5yr Treasury auction at 1pm ET.  These don’t usually cause big reactions, but it’s definitely capable of intraday volatility and/or shifting an intraday trend.