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18th July, 25
Slow Green Friday
At the end of a week with a few big ticket economic reports and unexpected headline-induced volatility, who wouldn't like a break? Friday's calendar offers respite with only Consumer Sentiment and residential construction numbers. Neither are market movers. As such, because bonds were green overnight, they remain green as we head into the afternoon. If markets closed right now, we'd be perfectly unchanged on the week
Slow Green Friday
At the end of a week with a few big ticket economic reports and unexpected headline-induced volatility, who wouldn't like a break? Friday's calendar offers respite with only Consumer Sentiment and residential construction numbers. Neither are market movers. As such, because bonds were green overnight, they remain green as we head into the afternoon. If markets closed right now, we'd be perfectly unchanged on the week
18th July, 25
Broker, Warehouse, Valuation Tools; loanDepot's LO Comp Lawsuit; MBA's MAA Campaign
With all of this talk about replacing people in our biz, could this be a future mortgage banker’s conference? Delta is moving toward eliminating set prices in favor of AI that determines how much you personally will pay for an airline ticket. I received this note from an LO in Idaho. “Before we work on ‘artificial intelligence,’ why don’t we work on ‘natural stupidity?’” In this internet age, do you think you “own” things on the web? Facebook is asking to use Meta AI on photos in your camera roll that you haven't shared yet. How about your own face? Denmark is attempting to
Broker, Warehouse, Valuation Tools; loanDepot's LO Comp Lawsuit; MBA's MAA Campaign
With all of this talk about replacing people in our biz, could this be a future mortgage banker’s conference? Delta is moving toward eliminating set prices in favor of AI that determines how much you personally will pay for an airline ticket. I received this note from an LO in Idaho. “Before we work on ‘artificial intelligence,’ why don’t we work on ‘natural stupidity?’” In this internet age, do you think you “own” things on the web? Facebook is asking to use Meta AI on photos in your camera roll that you haven't shared yet. How about your own face? Denmark is attempting to
17th July, 25
Bonds Unfazed by Econ Data
Bonds Unfazed by Econ Data If you had to guess at the bond market's response this morning based solely on the outcome of the 8:30am economic data, you'd be very well justified in assuming some selling/weakness. While that may have been the case for a few moments, it was quickly replaced by bond buying as traders parsed the Retail Sales internals, revisions, and especially the inflation-adjusted spending implications. In a nutshell, the report showed an ongoing downtrend in discretionary consumer spending and that ended up being the trade of the day--even if it wasn't a super huge trade.
Bonds Unfazed by Econ Data
Bonds Unfazed by Econ Data If you had to guess at the bond market's response this morning based solely on the outcome of the 8:30am economic data, you'd be very well justified in assuming some selling/weakness. While that may have been the case for a few moments, it was quickly replaced by bond buying as traders parsed the Retail Sales internals, revisions, and especially the inflation-adjusted spending implications. In a nutshell, the report showed an ongoing downtrend in discretionary consumer spending and that ended up being the trade of the day--even if it wasn't a super huge trade.
17th July, 25
Mortgage Rates Staying Broadly Sideways
Despite all of the economic data and news headlines over the past few days, mortgage rates have barely budged since last Friday. That was not what we expected this week given the anticipation for the inflation reports that came out on Tuesday and Wednesday. Now today, a seemingly balmy Retail Sales report (something that would normally push rates higher) ended up being no big deal for the bond market that underlies mortgage rates. There's some rational justification for the paradox, however. After adjusting for inflation, the retail sales categories that speak to discretionary spending
Mortgage Rates Staying Broadly Sideways
Despite all of the economic data and news headlines over the past few days, mortgage rates have barely budged since last Friday. That was not what we expected this week given the anticipation for the inflation reports that came out on Tuesday and Wednesday. Now today, a seemingly balmy Retail Sales report (something that would normally push rates higher) ended up being no big deal for the bond market that underlies mortgage rates. There's some rational justification for the paradox, however. After adjusting for inflation, the retail sales categories that speak to discretionary spending
17th July, 25
HMDA Review, Corresp., Data Mining, Processing Tools; Agency Credit Scoring
“I forgot to put the seat belt on my five-year-old boy this morning and as we were leaving the trailer park, somebody shouted, ‘You're an irresponsible father!’ I yelled, “Who the hell said that?! Stop the car, son!’” Lenders know that not all manufactured homes are trailers, and in fact there are some great MHs out there. In a few weeks I head to Michigan for the MMLA conference. It turns out that that over 25 percent of manufactured homes in Michigan are owned by private equity or similar entities per the Private Equity Manufactured Housing Tracker. In 2020 and 2021, they
HMDA Review, Corresp., Data Mining, Processing Tools; Agency Credit Scoring
“I forgot to put the seat belt on my five-year-old boy this morning and as we were leaving the trailer park, somebody shouted, ‘You're an irresponsible father!’ I yelled, “Who the hell said that?! Stop the car, son!’” Lenders know that not all manufactured homes are trailers, and in fact there are some great MHs out there. In a few weeks I head to Michigan for the MMLA conference. It turns out that that over 25 percent of manufactured homes in Michigan are owned by private equity or similar entities per the Private Equity Manufactured Housing Tracker. In 2020 and 2021, they
17th July, 25
Decent Start Despite Stronger Retail Sales Headline
There were multiple economic reports on tap this morning (4 of them in the 8:30am slot), but the headliner on a Retail Sales day is almost always going to be Retail Sales! In today's case, it came out much stronger than expected. Even when stripping out autos/gas/building materials (i.e. the "control group"), sales rose 0.5% vs a 0.3% forecast. This is the sort of thing that would normally put pressure on bonds, but that's not the case today. Why? Revisions are one consideration. Last month was revised down by the same amount that today's number beat the forecast. Inflation is
Decent Start Despite Stronger Retail Sales Headline
There were multiple economic reports on tap this morning (4 of them in the 8:30am slot), but the headliner on a Retail Sales day is almost always going to be Retail Sales! In today's case, it came out much stronger than expected. Even when stripping out autos/gas/building materials (i.e. the "control group"), sales rose 0.5% vs a 0.3% forecast. This is the sort of thing that would normally put pressure on bonds, but that's not the case today. Why? Revisions are one consideration. Last month was revised down by the same amount that today's number beat the forecast. Inflation is
16th July, 25
Bonds Give Free Preview of Post-Powell Momentum
Bonds Give Free Preview of Post-Powell Momentum Everyone loves a good free preview, but not all of the bond market enjoyed today's version. It involved reports that Trump was considering firing Powell. Forget the nitty gritty details because markets took it very seriously if volume is any indication (highest since tariff announcement week in April). Those who pay close attention were not-at-all-surprised to see longer-term yields RISING in response. After all, a more dovish Fed could only directly control overnight rates. This is enough to maybe help 2yr Treasuries and under, but
Bonds Give Free Preview of Post-Powell Momentum
Bonds Give Free Preview of Post-Powell Momentum Everyone loves a good free preview, but not all of the bond market enjoyed today's version. It involved reports that Trump was considering firing Powell. Forget the nitty gritty details because markets took it very seriously if volume is any indication (highest since tariff announcement week in April). Those who pay close attention were not-at-all-surprised to see longer-term yields RISING in response. After all, a more dovish Fed could only directly control overnight rates. This is enough to maybe help 2yr Treasuries and under, but
16th July, 25
Mortgage Rates Mostly Sideways After Dodging Mid-Day Drama
This morning brought another inflation report. Given the negative reaction to yesterday's inflation data, there was some cause for concern. Thankfully, today's data was more unequivocally acceptable for the bond market and--thus--interest rates. Bonds improved fairly well into the late AM hours, but then, the drama! Actually, there wasn't much drama for mortgage rates, but behind the scenes, lenders came very close to making mid-day adjustments toward higher rates. Some of them actually did, but most of those lenders later reversed course after the drama faded. So what was it? In a
Mortgage Rates Mostly Sideways After Dodging Mid-Day Drama
This morning brought another inflation report. Given the negative reaction to yesterday's inflation data, there was some cause for concern. Thankfully, today's data was more unequivocally acceptable for the bond market and--thus--interest rates. Bonds improved fairly well into the late AM hours, but then, the drama! Actually, there wasn't much drama for mortgage rates, but behind the scenes, lenders came very close to making mid-day adjustments toward higher rates. Some of them actually did, but most of those lenders later reversed course after the drama faded. So what was it? In a
16th July, 25
TBA Settlement, Processing, HELOC, Purchase Advice Mgt. Tools; JPMorgan to Charge For Info?
JPMorgan told FinTechs that it will charge for access to its customers’ bank information. The fees would bring big bucks to JPMorgan but eat into the profit margin of any lender or credit reporting agency or verification service. Will this become a trend with other depositories? Lenders and their originators, along with MBS investors, carefully watch trends in income and individuals. The gig economy, driven by on-demand work and services like rideshares and food delivery, is a growing part of the U.S. economy and primarily consists of sole proprietorships tracked by the U.S. Census Bureau’
TBA Settlement, Processing, HELOC, Purchase Advice Mgt. Tools; JPMorgan to Charge For Info?
JPMorgan told FinTechs that it will charge for access to its customers’ bank information. The fees would bring big bucks to JPMorgan but eat into the profit margin of any lender or credit reporting agency or verification service. Will this become a trend with other depositories? Lenders and their originators, along with MBS investors, carefully watch trends in income and individuals. The gig economy, driven by on-demand work and services like rideshares and food delivery, is a growing part of the U.S. economy and primarily consists of sole proprietorships tracked by the U.S. Census Bureau’
16th July, 25
PPI Reaction Playing Out Better Than CPI So Far
Tuesday's CPI reaction was frustrating. Bonds rallied for an hour only to sell off for the rest of the day starting at 9:30am. Things are off to a different sort of start today. PPI was a bit lower than expected and didn't immediately suggest a major tariff impact in the same way as some of the categories in yesterday's CPI. Imports themselves are not included in PPI, but if a domestic producer raises prices on something with tariffed components, tariffs would effectively be responsible for the increase unless the producer had a separate reason to raise prices. Bottom line: it
PPI Reaction Playing Out Better Than CPI So Far
Tuesday's CPI reaction was frustrating. Bonds rallied for an hour only to sell off for the rest of the day starting at 9:30am. Things are off to a different sort of start today. PPI was a bit lower than expected and didn't immediately suggest a major tariff impact in the same way as some of the categories in yesterday's CPI. Imports themselves are not included in PPI, but if a domestic producer raises prices on something with tariffed components, tariffs would effectively be responsible for the increase unless the producer had a separate reason to raise prices. Bottom line: it
