The Federal Housing Administration, the Department of Veterans Affairs and the Federal Housing Finance Agency have started gathering data and analyzing how climate risk will impact the housing ecosystem.

A special committee is exploring any possible structural “strategic alternatives,” which would be aimed at increasing shareholder value, the real estate investment trust said.

An insurance-indexed debt-to-income ratio could help mitigate borrowers’ rising premiums, and help maintain a healthy servicing portfolio, experts said.

But the number of properties whose mortgage is more than 90 days late is at its lowest since 2006, ICE Mortgage Technology said.

Industry leaders expressed a high degree of satisfaction with technology in use, but also said a product’s cost is the most important criteria for them when partnering with vendors, according to Fannie Mae research.

Boring Monday Keeps The Focus on Next Week

Monday may as well have been a 3rd weekend day as far as the bond market is concerned.  While equities are preoccupied with earnings, bonds were trading at about HALF their normal clip based on the past 2 weeks of average volume.  There were no relevant economic releases and really not even any interesting market moving headlines.  Buyers pushed back against modest overnight weakness in the AM hours and then drifted mostly sideways in the PM hours.  Days like this only intensify the focus on next week’s important slate of events which include a Treasury refunding announcement, Fed announcement (with likely QT tapering on the agenda) and the jobs report. 

Market Movement Recap

08:17 AM Modestly weaker overnight with 10yr yields up 3.3bps at 4.655 and MBS down 2 ticks (.06).

10:53 AM Back in positive territory, MBS up 3 ticks (.09) and 10yr down 0.4bps at 4.618

02:52 PM Best levels at noon, but dialing back a bit into the PM hours.  Trading levels right in line with last update.  MBS down 3 ticks (.09) from highs, but still up 3 ticks on the day.

03:52 PM Back near best levels. No particular reason or significance.  MBS up 5 ticks (.16) and 10yr down 0.7bps at 4.616

Mortgage rates began the new week at almost exactly the same levels seen at the end of last week.  There were no major events or economic reports to cause volatility in the underlying bond market, but bonds were able to improve modestly by the end of the day. In general, bond market improvement leads to lower rates.  The catch, in this case, is the improvement was fairly small and that it was offset to some extent by modest weakness earlier in the day.  Even so, a handful of lenders offered mid-day improvements.  Other lenders will technically be more likely to improve tomorrow morning if bond market trading levels are unchanged (and that’s not something that can be guaranteed or even assigned better than a 50% probability). By staying near Friday’s levels, the average lender is just shy of the highest rates in 5 months.  A top tier conventional 30yr fixed scenario is still in the mid 7% range. Volatility will definitely be higher next week due to the calendar of events, but it could start increasing in the coming days as well.  There’s no directional connotation to “volatility.”  It’s an inherent 2-way street.  The direction of the movement will depend on the tenor of the data.  It looks like rates are at least willing to treat current levels as a ceiling, but only if we finally see some friendlier data–something that’s been hard to come by since February.

When I was a kid, whenever I would walk by a pay phone or newspaper vending machine, I’d check the coin change slot. Or periodically check under my Dad’s La-Z-Boy… every penny or dollar counted! (Nowadays, I still get excited when I find a forgotten quarter in my own pants or backpack.) Plenty of folks at last week’s Great River Conference were trying to do the modern equivalent of that by learning about the current vendor offerings of technology, or meeting with their current vendors to see if pennies or dollars could be saved on every loan given the current $12k+ cost per funded loan. Smart and compliant speed and efficiency are critical… speaking of which, found here, today’s podcast features an interview with Guaranteed Rate’s Victor Ciardelli on the company’s goal of closing a loan in one-day and how they will get there. 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. Lender and Broker Products, Software, and Services When people say they can see miles and miles on a clear day, they aren’t wrong: the horizon is about 3 miles away, with some variation depending on your height. And whatever may lie beyond, Dark Matter Technologies is helping lenders prepare with its first annual Horizon user conference. The event kicks off Wednesday at the Fontainebleau Miami Beach and will bring together hundreds of industry notables to network, get the inside scoop on Dark Matter’s innovation roadmap, and explore business trends including market growth strategies, AI, and cybersecurity. Feeling a little FOMO? Request a consultation today and your team could be working smarter with the Empower LOS, and catching some Florida sun, by this time next year.

It’s no secret that a vast majority of bond market movement these days occurs in response to a small handful of economic reports and the Fed’s quarterly updates on the rate hike outlook (via the dot plot).  That means we see several weeks each month without any big ticket market movers. This week arguably qualifies.  But how could that be, considering Friday’s PCE price index is the same one the Fed refers to as its preferred gauge of the 2% inflation target?  PCE just hasn’t caused big reactions for a few reasons (similarity to CPI and predictability due to other data that comes out earlier).

Assuming the track record of nonreactions continues, the typical pattern of volatility remains intact as the following week brings big ticket data and a Fed announcement (no updated dot plot, and no rate cut, but there could be some change to policy that we’ll discuss next week).
On the topic of volatility, bonds are off to a slow start this week, with no major escalation in the Middle East over the weekend. Some analysts attribute the modest bump in stock prices and bond yields to that absence of flight-to-safety trading.

Scott Reise, senior vice president at Atlantic Bay Mortgage, thinks the mortgage industry is tired, but optimistic for the year ahead.