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NAHB Says Second Homes Aren't Just Vacation Destinations

 

Posted To: MND NewsWire

The stereotype of a second home usually involves a tropical beach, a boat dock on a lake, or skiers whizzing past a picture window, but the National Association of Home Builders (NAHB) says that is not reality. Or at least not all of it. Na Zhao, writing in NAHB's Eye on Housing blog says there are a good amount of second homes and lots exist in non-vacation-y areas. NAHB estimates there are 7.4 million homes, or 5.6 percent of the total housing stock that qualify for the second home mortgage tax deduction. That information comes from the Census Bureau's 2016 American Community Survey (ACS.) As might be expected, the state with the largest stock of second homes was Florida with 1.1 million; 15 percent of all such homes in the country. Roughly half of the total is located in Florida and seven...(read more)

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Broker and Front-End Products, Subservicer Webinar; Rates Watching Overseas' Markets

 

Posted To: Pipeline Press

The focus is on the holidays but there is plenty of 2019 wedding planning occurring. Despite that, according to the U.S. Census Bureau, adults are increasingly delaying saying, “I Do” as the median age at first marriage continues to climb by approximately 2% compared to 2003. And in 2018, there were 8.5 million unmarried opposite-sex couples living together . Remember decades ago when that was a cause of concern for processors and underwriters? Lender Products and Services Live Well Financial (NMLS #1177) is excited to announce that industry veteran Dan Mahoney has joined the company as an Account Executive with its wholesale division. Dan brings more than 20 years’ experience to Live Well which offers Conventional, FHA, VA, and reverse mortgage loan products to its partners...(read more)

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MBS Day Ahead: How We Guard Our Newfound Gains

 

Posted To: MBS Commentary

We've had an impressive winning streak recently and have acquired gains worthy of a watchful, protective eye. Will this be a durable rally or a fleeting victory? That question can't be answered without seeing how economic data and events unfold in the coming weeks. Perhaps even more important will be the tenor of the Fed Announcement next week. One thing I can tell you to expect is at least one day of correction--one red day that pushes back against all the recent positivity. Whether or not that day brings friends is another matter, and a much more significant question than whether or not we'll simply see one red day. In other words, the red day is just something that's always going to happen when bonds string together this sort of winning streak. We can watch various technical...(read more)

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MBS RECAP: Bonds Think it Over After NFP, Then Finally Decide to Rally

 

Posted To: MBS Commentary

This morning's trading--both before and after NFP came out--basically acted as additional time for debate . Both MBS and Treasuries bounced quickly, but symmetrically around yesterday's closing levels before finally choosing a direction. Actually, the direction may have been chosen for them to some extent, as it was the stock market that made the first move. To bonds' credit, they didn't lose their cool in the first hour and a half of trading as stocks moved higher. Once it became clear that equities were heading down and out, bonds finally followed. 10yr yields hit their lowest closing levels since late August. MBS haven't bounced back quite as much relative to late-summertime levels, but they're getting close. NFP itself didn't seem to matter much, although I suspect...(read more)

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Mortgage Rates Lowest Since September After Jobs Report

 

Posted To: Mortgage Rate Watch

Mortgage rates held on to their recent improvements today after the important Employment Situation (the big "jobs report") showed November job creation was lower than expected. In general, weaker job creation is good for interest rates because it speaks to slower economic growth and inflation (both of which are enemies of rates). This report was particularly important because a strong result would have cast doubt on several speeches from members of the Federal Reserve. Those speeches have warned about slower economic growth in 2019 and the potential for fewer rate hikes than previously anticipated. There were no clear winners or losers at first--probably because job creation is still historically solid. Additionally, the unemployment rate remained ultra low, and wage growth remained above 3...(read more)

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New Fannie/Freddie Requirements May Penalize High-Risk Borrowers

 

Posted To: MND NewsWire

Three researchers from the Urban Institute (UI) recently analyzed the new capital standards rule proposed by the Federal Housing Finance Agency (FHFA) for Fannie Mae and Freddie Mac (the GSEs.) The proposed rule includes two alternative leverage ratio proposals. Under the first, the GSEs would be required to hold capital equal to 2.5 percent of total assets and off-balance sheet guarantees, the second, to hold capital equal to 1.5 percent of trust assets and 4 percent of non-trust assets. The second approach differentiates between the greater funding risks of non-trust assets and the lower funding risks of the trust assets while increasing the capital requirements for both relative to the current statutory requirements. On Thursday we summarized their analysis of how well the rule might align...(read more)

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Uptick in Home Purchase Sentiment Reflects Increased Confidence

 

Posted To: MND NewsWire

Fannie Mae's Home Purchase Sentiment Index (HPSI) for November rose slightly, but within the 0.5-point increase was some increased confidence about personal finances and the wisdom of buying a home. The index, which consolidates responses from a subset of questions on the company's National Housing Survey, rose to 86.2 from 85.7 in November. The index is 1.6 points lower than in December 2017. A survey high record was set in the net share of Americans who reported their income was up significantly over the last 12 months. A 5-point increase brought the net share to 24 percent. Fifty-seven percent of respondents told pollsters it was a good time to buy a home while 34 percent disagreed. This resulted in net positive responses of 23 percent, up two points from October. The other component of...(read more)

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Warehouse Products; Vendor/Service Provider Directory; Yield Curve Primer

 

Posted To: Pipeline Press

The year has sped along, and here we are at Pearl Harbor Day already. Although mortgage rates have lagged, what has pushed Treasury rates down? Released earlier this week, the Federal Reserve's latest report on economic conditions, known as the Beige Book, says most of its 12 regions achieved satisfactory growth in November but also says there is "increased uncertainty" among businesses over the influence of U.S. tariff policy. The report highlights rising costs for manufacturers and problems for farmers due to counter-tariffs imposed by China and others. (The Trump Administration’s trade fight with China has been particularly hard in Nebraska, with its Farm Bureau estimating that retaliatory tariffs let to a loss of more than $1 billion so far in 2018, which is about 11 to 16 percent...(read more)

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MBS Day Ahead: So Much of The Recent Volatility Has Been Building Toward Today

 

Posted To: MBS Commentary

Powell's speech last week at the Economic Club of New York marked the beginning of an official shift. Until then, while the Fed had its dovish dissenters, the consensus was "steady as she goes" with respect to regular rate hikes in the coming quarters. The only uncertainty was whether or not the Fed would hike 2 more times in 2019 before leveling off (maybe it would be 3 times, maybe 1 time...). But seemingly overnight, the consensus is now that we're only likely to see one hike in December, and perhaps NO hikes in 2019. This has been a big adjustment for financial markets. You might think that stocks would enjoy this shift (after all, the news has been eager to tell you that stocks are tanking because of rates), but no... This move was actually led by the longer end of the...(read more)

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Better Access to Conforming Loans Means More First-Timers in Market

 

Posted To: MND NewsWire

Access to mortgage credit moved higher in November, largely due to improved access to conforming mortgages. The Mortgage Bankers Association's Mortgage Credit Availability Index (MCAI increased 1.1 percent to 188.8. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The Conventional MCAI increased (2.4 percent) and the Government MCAI decreased (0.1 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI rose 1.1 percent, while the Conforming MCAI gained 4.0 percent. "The supply of credit continues to drift higher, driven once again by growth in the conventional credit space, while credit supply in government loans was essentially unchanged from the previous month," said Joel Kan, MBA's...(read more)

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Sluggish Construction Challenges the Housing Market

 

Posted To: MND NewsWire

While there has been a lot of talk since the recovery took hold about the lack resiliency in the residential construction sector, the issue is now moving from an academic discussion to one on the verge of alarm. As Freddie Mac's Economic and Housing Research Group writes in the company's Insights blog, "The inadequate level of U.S. housing supply is a major challenge facing the housing market in 2018 and likely for years to come." The Insights' authors, Sam Khater, Chief, and Len Kiefer, Deputy Chief Economists, and Ajita Atreya and Venkataramana Yanamandra, both senior quantitative analysts, estimate the U.S. needed 370,000 more than the 1.25 million units that were added to the stock in 2017 to satisfy demand. In the forty years starting in 1968 to the start of the Great Recession in 2008...(read more)

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MBS RECAP: Huge Day For Bonds, For Better and Worse

 

Posted To: MBS Commentary

Without discussing what tomorrow may bring for bond markets, we can safely say that today was big. Both in terms volumes and outright trading levels, we haven't seen a bigger combo since the big stock sell-off in early October, and that came near the top of the rate range. Today was arguably much more significant because it occurred as rates were already pushing multi-month lows. Today was big in a good way in the sense that yields made it all the way down to 2.826%. But the same level raises risks of a technical bounce. After all, 2.82% is the resistance level we've been watching for the past 2 sessions and we bounced fairly hard there today (10's ended at 2.89%). At the risk of stating the obvious, a lot could be riding on tomorrow's jobs report. We have NFP built up to pass...(read more)

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Mortgage Rates Are On a Tear!

 

Posted To: Mortgage Rate Watch

Mortgage rates dropped significantly yet again today, adding to an already impressive week of improvement and bringing most lenders into their best territory since September 13th, 2018. The average lender improved by more than an eighth of a percentage point in just the past 3 business days and by nearly 3/8ths of a point from the highs seen in early November. This comes out to roughly $70/month for a $300k loan, or an upfront savings of $4500 if you were to buy your rate down (paying points) back in early November. Much of the move has come courtesy of a rapid shift in expectations about the economy and Fed policy. Investors have been worrying about the longevity of the current economic cycle more and more as it ages. By some measures, this is already the longest economic expansion ever (and...(read more)

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MBS Day Ahead: Quick Recap of How/Why Rates Have Rallied So Apparently Quickly

 

Posted To: MBS Commentary

Good times are rolling in the bond market, even if they're rolling much more for Treasuries as opposed to MBS. Nonetheless, MBS will continue to benefit as long as Treasuries are rallying, and the latter is beginning the day at new multi-month lows. Seeing 10yr yields under 2.9% may feel sudden, but it's actually quite logical . We know rates had been moving higher in general due to 3 main problems: increased Treasury issuance, increased growth/inflation risk, and a Federal Reserve that had no qualms about continuing to remove accommodation. We know that rates had been trading in this 2.8-3.0% range all summer. Then in September and October, they were pushed higher by surprisingly strong economic data (some of which, like average hourly earnings, pointed toward inflation) and even tougher...(read more)

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Profitability Products; New Penn Re-Branded; What is Pushing Rates Lower

 

Posted To: Pipeline Press

I still receive questions about HMDA. It’s good to know about the 2018 edition of A Guide to HMDA Reporting: Getting it Right! (the Guide). Developed by the Federal Financial Institutions Examination Council, it provides a summary of certain key requirements of the Home Mortgage Disclosure Act (HMDA). Features include “Where to Look” hints, and the complete Consumer Financial Protection Bureau’s (CFPB) Small Entity Compliance Guide in Appendix B. Copies of the previously published resources, such as the CFPB’s Reportable HMDA Data: A Regulatory and Reporting Overview Reference Chart are also included as sections of The Guide . Lender Products and Services Don’t let the changing landscape or current market conditions inflate your loan origination costs. Get...(read more)

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