The complaint focused on 41 employees which allegedly accounted for $260 million in annual production volume.

The real estate investment trust, while still separately traded, is now under the Rithm umbrella, and is taking on that brand as well as a new business model.

The Federal Housing Finance Agency issued a proposed rule for the Federal Home Loan Bank System that allows the FHFA director to set “reasonable” board compensation.

Recent polling an industry group analyzed points to a range of outcomes that could create opportunities and risks for commercial and residential financing.

Federal Reserve Bank of Dallas President Lorie Logan repeated her call for the U.S. central bank to lower interest rates at a careful pace as the economic environment remains uncertain.

Ratio of Weakness to Confirmed Explanations is Off The Charts

Every year there are a few days where bonds move as if obviously inspired in spite of a distinct absence of obvious inspiration. Monday was one of those days.  Sure, there are a few “best guesses” making the rounds, but all of them are fairly easy to debate and none of them are worth the 11.5bp jump to the highest 10yr yields in almost 3 months.  News articles pointing out “the economy” or “the deficit” are grasping at straws.  These things are valid, but they wouldn’t adequately account for today’s sell-off.  Sometimes the explanations for these episodes become clearer in hindsight.  Other times, the mystery endures. Either way, volatility remains a big risk through mid-November. 

Econ Data / Events

Housing Starts

1.354m vs 1.350m f’cast, 1.356m prev

Building Permits

1.428m vs 1.46m f’cast, 1.47m prev

Market Movement Recap

09:08 AM Sharply weaker overnight and sideways from there.  10yr up 6bps at 4.137 and MBS down a quarter point in 5.5 coupons.

11:59 AM Snowball selling all morning.  MBS down more than 3/8ths and 10yr up 9.3bps at 4.17

03:36 PM Still at weakest levels.  MBS down 14 ticks (.44) and 10yr up 10.6bps at 4.184

Sports have a lot of fans, and heroes. With only 10 days until Halloween, what a great time of year to be a sports fanatic. You never have to leave your den, or local sports bar, when football, baseball, basketball, and hockey are all on TV, and if you look around you can find golf and tennis! What isn’t a great time is if you’re either lending or borrowing in Florida on a condo. With Provident Funding announcing that it is bailing on condos, at some point it will be harder to finance condos than co-ops. It’s also the time of year when a) lenders and vendors are trying to forecast and budget for 2025, b) notices for organizational holiday parties begin being sent out, and c) Costco is stocking Valentines Day items in its warehouses. Speaking of Costco, the company has entered the housing business, in a manner of sorts. Costco stocks tiny houses, playhouses, and garden sheds. So does Amazon: page down once or twice. (Today’s podcast can be found here, and this week’s is sponsored 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. Hear an interview with Wilqo’s Rob Katz on the biggest issues mortgage bankers are facing today and how companies should be planning for 2025.) Lender and Broker Software, Services, and Products By enhancing connectivity between originators, warehouse lenders, investors, and doc custodians, OptiFunder provides a fully digitized and automated solution, transforming the warehouse lending process and streamlining operations for mortgage originators. OptiFunder’s Warehouse Management System (WMS) is an essential tool, funding approximately one in every seven loans in the market. By leveraging its extensive network and proactively collaborating with warehouse lenders to fulfill unaddressed needs, OptiFunder introduced a revolutionary platform for warehouse lenders. Replicating the operational efficiencies and connectivity it provides to mortgage originators, Greyhound WMS provides a modern-day, configurable framework to meet warehouse lenders’ unique needs. An alternative to legacy platforms, Greyhound connects warehouse lenders with originators, streamlines complex workflows and enhances process automation for efficient funding, shipping, and paydown requests. Meet with the OptiFunder team at MBA Annual or schedule a Greyhound Demo to learn more. Sign up for OptiFunder’s Monthly Warehouse Lending Report here.

First off, there’s no great explanation for the extent to which bonds are losing ground this morning.  These days happen occasionally.  Sometimes an elusive market mover becomes clearer later in the day.  Other times, we’re forced to rely on our best guesses.
With that in mind, here’s a quick catalog of usual suspects at times like this.
1. Mondays, liquidity greases the skids for higher volatility.  This is a non-issue when there aren’t any threatening market movers in play.  Let’s say illiquidity makes a move 2-3x bigger than normal.  That doesn’t matter if the underlying move is quite small in the first place.  But once we get to a “medium sized” move, illiquidity will make it look big.  There’s no question that

In the bigger picture, today’s weakness fully erases the gains seen since the July jobs report (released in early August).

By the smallest of margins, mortgage rates are back up to levels last seen in July.  That means we’ve gone from being fairly close to 6% in mid-September to being nearly as close to 7% today when it comes to top tier 30yr fixed scenarios for the average lender. Today’s jump was particularly quick and frustratingly lacking in satisfying explanations.  It’s not the explanations make bad news any more palatable, but it’s always more frustrating to be confronted with unpleasantness that seems to be happening for no good reason. There are several theories, but nothing as obvious or demonstrable as a surprise result in a key piece of economic data.  These include things like shifting election odds coupled with assumptions about policy impacts, arcane calendar issues surrounding the options market, and one of several research notes regarding U.S. deficits that have been making the rounds.   It’s unlikely that any of these factors could exclusively drive the pace of weakness seen in rates today.  There are limited examples of several such factors teaming up to cause days like today, but just as often, something else comes to light in the following days that helps flesh out the explanation. Explanations aside, it was one of the bigger jumps seen in the past few months, and by far and away the biggest jump seen on a day without a big economic report or other scheduled event.

Harvard University housing experts anticipate home improvement spending to rise in the next 12 months.