Latest news
21st May, 26
Hedging, Verification, Servicing, QC, Reverse Products; Road to Housing Bill Status
Lots of folks were leaving the MBA’s National Secondary yesterday, and many comments and questions were heard. “Did you hear that Jerry Seinfeld is doing a show at the MBA National in October?” (True) “Ginnie Mae began ratcheting up its cybersecurity efforts in 2024. Why aren’t others?” (Good question; I’m sure they are at some level.) “Most lenders are selling loans to the Agencies through their ‘cash windows’ on a whole loan basis rather than through MBS execution.” (True; Freddie and Fannie have increased gfees, so when capital markets staff are seeking every basis
Hedging, Verification, Servicing, QC, Reverse Products; Road to Housing Bill Status
Lots of folks were leaving the MBA’s National Secondary yesterday, and many comments and questions were heard. “Did you hear that Jerry Seinfeld is doing a show at the MBA National in October?” (True) “Ginnie Mae began ratcheting up its cybersecurity efforts in 2024. Why aren’t others?” (Good question; I’m sure they are at some level.) “Most lenders are selling loans to the Agencies through their ‘cash windows’ on a whole loan basis rather than through MBS execution.” (True; Freddie and Fannie have increased gfees, so when capital markets staff are seeking every basis
21st May, 26
Bonds Turn Red Overnight on War Headlines
Bonds spent most of the overnight session moving sideways to slightly stronger, but everything changed at 6:20am. That's when news broke regarding a statement from Iran's Khamenei saying that Uranium should not leave the country. Given that this is a sticking point for peace negotiations, the response in bonds/oil/etc was immediate and clear. Yields rose from 4.575 to 4.62 and continue to trade near there ever since. While there was a decent little chunk of line items on the econ calendar at 8:30am this morning, none of them generated any volume or volatility
Bonds Turn Red Overnight on War Headlines
Bonds spent most of the overnight session moving sideways to slightly stronger, but everything changed at 6:20am. That's when news broke regarding a statement from Iran's Khamenei saying that Uranium should not leave the country. Given that this is a sticking point for peace negotiations, the response in bonds/oil/etc was immediate and clear. Yields rose from 4.575 to 4.62 and continue to trade near there ever since. While there was a decent little chunk of line items on the econ calendar at 8:30am this morning, none of them generated any volume or volatility
20th May, 26
Full Reversal And Then Some
Full Reversal And Then Some Bonds more than made up from Tuesday's rout with a massive rally on Wednesday. Unlike Tuesday's move, which was driven by bond-market-specific selling pressure on the part of one account's massive liquidations, Wednesday's rally was broad-based and driven by war-related headlines. Specifically, newswires suggested the U.S. and Iran are now very close to agreeing on a plan to end the war. The market isn't just hearing "wolf!" It's pretty sure it's seeing an actual wolf on the horizon. This is important and ongoing proof of concept regarding the prospect of additional
Full Reversal And Then Some
Full Reversal And Then Some Bonds more than made up from Tuesday's rout with a massive rally on Wednesday. Unlike Tuesday's move, which was driven by bond-market-specific selling pressure on the part of one account's massive liquidations, Wednesday's rally was broad-based and driven by war-related headlines. Specifically, newswires suggested the U.S. and Iran are now very close to agreeing on a plan to end the war. The market isn't just hearing "wolf!" It's pretty sure it's seeing an actual wolf on the horizon. This is important and ongoing proof of concept regarding the prospect of additional
20th May, 26
Mortgage Rates Recover All of Yesterday's Losses
Wednesday brought some much-needed relief for the mortgage market after rates surged to new 9 month highs of 6.75% yesterday. Whereas that rate spike was decoupled from the prevailing narrative of war-related headlines, today's recovery was quite the opposite. Newswires came out shortly after 10am ET that suggested the U.S. and Iran are nearing a final draft of a peace agreement. While such news has been prone to correction and revision, the market was nonetheless willing to respond quickly and rather forcefully. Oil prices dropped sharply with Treasury yields in tow. In the bond market, "
Mortgage Rates Recover All of Yesterday's Losses
Wednesday brought some much-needed relief for the mortgage market after rates surged to new 9 month highs of 6.75% yesterday. Whereas that rate spike was decoupled from the prevailing narrative of war-related headlines, today's recovery was quite the opposite. Newswires came out shortly after 10am ET that suggested the U.S. and Iran are nearing a final draft of a peace agreement. While such news has been prone to correction and revision, the market was nonetheless willing to respond quickly and rather forcefully. Oil prices dropped sharply with Treasury yields in tow. In the bond market, "
20th May, 26
TPO Non-QM, Vendor Strategy, Cybersecurity Tools; NY Conference Talk; Fed Raise Coming?
Here in New York, as over a thousand of us head to airports (hopefully avoiding manholes… tragic), the mood has been pragmatic. Not overly optimistic, not somber, just realistic. No one is arguing that the war hasn’t driven up worldwide oil prices, impacting inflation and borrower psychology, impacting lending. The Mortgage Bankers Association now predicts a Federal Reserve rate hike to arrive in 2027, so any lenders or originators hoping for lower rates, well… At this point there isn’t a lot of reason for rates to drop unless higher oil prices slow the economy further. We knew that a
TPO Non-QM, Vendor Strategy, Cybersecurity Tools; NY Conference Talk; Fed Raise Coming?
Here in New York, as over a thousand of us head to airports (hopefully avoiding manholes… tragic), the mood has been pragmatic. Not overly optimistic, not somber, just realistic. No one is arguing that the war hasn’t driven up worldwide oil prices, impacting inflation and borrower psychology, impacting lending. The Mortgage Bankers Association now predicts a Federal Reserve rate hike to arrive in 2027, so any lenders or originators hoping for lower rates, well… At this point there isn’t a lot of reason for rates to drop unless higher oil prices slow the economy further. We knew that a
20th May, 26
Bleeding Subsides For Now, Headlines Helping But Bonds Remain Cautious
Tuesday's massive wave of bond-specific weakness still has the analytical community scratching its collective head. Our contacts are either saying nothing or telling us they're just as perplexed. So far this morning, there hasn't been any sort of repeat performance. Lower oil prices have helped bonds find their footing, but the move has relied on breaking news regarding the potential for the final text of the peace agreement to be drafted by tomorrow. On the calendar front, the 2pm FOMC Minutes release is the only thing that seems like it might be relevant, but as a reminder, this
Bleeding Subsides For Now, Headlines Helping But Bonds Remain Cautious
Tuesday's massive wave of bond-specific weakness still has the analytical community scratching its collective head. Our contacts are either saying nothing or telling us they're just as perplexed. So far this morning, there hasn't been any sort of repeat performance. Lower oil prices have helped bonds find their footing, but the move has relied on breaking news regarding the potential for the final text of the peace agreement to be drafted by tomorrow. On the calendar front, the 2pm FOMC Minutes release is the only thing that seems like it might be relevant, but as a reminder, this
19th May, 26
Whales Making Waves in Treasury Futures
Whales Making Waves in Treasury Futures Nerd alert: there's no way to discuss what happened in the bond market today without getting a bit nerdy. Reason being, there was an absolute deluge of block trades in Treasury futures (over $20bln--the biggest day we can remember for outright block trades). There are a few different possibilities for how this went down, but the size, structure, and timing of those trades suggests that only one or two massive players were involved. The saving grace of a move like this is that it means there was not broad-based selling pressure from a majority of the
Whales Making Waves in Treasury Futures
Whales Making Waves in Treasury Futures Nerd alert: there's no way to discuss what happened in the bond market today without getting a bit nerdy. Reason being, there was an absolute deluge of block trades in Treasury futures (over $20bln--the biggest day we can remember for outright block trades). There are a few different possibilities for how this went down, but the size, structure, and timing of those trades suggests that only one or two massive players were involved. The saving grace of a move like this is that it means there was not broad-based selling pressure from a majority of the
19th May, 26
Mortgage Rates Jump Again, Now up 0.75% Since Start of The War
It was another rough day for the bond market and, thus, for interest rates. Investors aggressively sold bonds in the first 2 hours of trading, taking 10yr Treasury yields to the highest level in more than a year. Mortgage-specific bonds have been doing better versus Treasuries in recent months thanks to increased purchase demand from Fannie Mae and Freddie Mac. All else equal, higher demand for mortgage bonds = lower rates, relatively. In the current case, it means mortgage rates haven't moved up as much as Treasury yields over the past 6 months. That said, rates have still definitely moved
Mortgage Rates Jump Again, Now up 0.75% Since Start of The War
It was another rough day for the bond market and, thus, for interest rates. Investors aggressively sold bonds in the first 2 hours of trading, taking 10yr Treasury yields to the highest level in more than a year. Mortgage-specific bonds have been doing better versus Treasuries in recent months thanks to increased purchase demand from Fannie Mae and Freddie Mac. All else equal, higher demand for mortgage bonds = lower rates, relatively. In the current case, it means mortgage rates haven't moved up as much as Treasury yields over the past 6 months. That said, rates have still definitely moved
19th May, 26
AI, Construction, Servicing, QC Products; NY Conference Chatter; AI Governance; LO Comp
One of the discussion topics here in New York at the MBA conference is, just like every other conference, artificial intelligence, and one of the questions is, “Who’s accountable if something goes wrong?” Any one of us in capital markets will tell you that, in the case of Freddie, Fannie, investors, and so on, lenders are held ultimately accountable for anything that goes wrong. In the event of a buyback, or default, a lender can’t point at an AI vendor and say, “You cover the losses.” Make sure that with any software that you buy you know where it came from and how it was designed
AI, Construction, Servicing, QC Products; NY Conference Chatter; AI Governance; LO Comp
One of the discussion topics here in New York at the MBA conference is, just like every other conference, artificial intelligence, and one of the questions is, “Who’s accountable if something goes wrong?” Any one of us in capital markets will tell you that, in the case of Freddie, Fannie, investors, and so on, lenders are held ultimately accountable for anything that goes wrong. In the event of a buyback, or default, a lender can’t point at an AI vendor and say, “You cover the losses.” Make sure that with any software that you buy you know where it came from and how it was designed
19th May, 26
Increasing Signs of Bond-Specific Panic
Ever since the initial 2 week ceasefire was announced in the Iran war, the bond market has adhered to trend channels that align with either de-escalation or re-escalation sentiment. Nothing too complicated here: if sentiment is trending in favor of peace, bonds have rallied. If sentiment is deteriorating, bonds have sold off. There was a temporary diversion as traders waited to see if last week's China summit would be a catalyst for a shift. When the summit failed to deliver, yields jumped back in line with the re-escalation trend. Now this morning, they're already challenging the bearish
Increasing Signs of Bond-Specific Panic
Ever since the initial 2 week ceasefire was announced in the Iran war, the bond market has adhered to trend channels that align with either de-escalation or re-escalation sentiment. Nothing too complicated here: if sentiment is trending in favor of peace, bonds have rallied. If sentiment is deteriorating, bonds have sold off. There was a temporary diversion as traders waited to see if last week's China summit would be a catalyst for a shift. When the summit failed to deliver, yields jumped back in line with the re-escalation trend. Now this morning, they're already challenging the bearish