MBS RECAP: 9/23/2011
By:
Matthew Graham
•
MBSonMND: MBS RECAP
| Open MBSonMND Dashboard | ||||||||||||||
|
|
|
||||||||||||
| Pricing as of 4:03 PM EST | ||||||||||||||
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard
.
12:22PM :
ALERT:
Reprices for the Worse Reported, More are Possible
For the most part, morning rate sheets didn't reflect the early weakness in MBS. 3.75 to 3.875% was left largely intact. That could continue to be the case at quite a few lenders into this afternoon, but there are several factors creating more risk now.
- TSYs and MBS have fallen further.
- Decent rates this morning created more locking - More locking creates risks of pipeline control reprices - More locking + MBS weakness = more origination = more supply and price pressures for MBS.
Combine all of the above and there are several factors creating risks of additional losses into the afternoon, especially considering its Friday.
We're not especially troubled by the bond market sell-off today, bearing in mind that 10yr yields are "up" to 1.784 and MBS 3.5's "down" to 103-02, both things we probably wouldn't have imagined saying a few weeks ago. Additionally, 3.5's look to have encountered some support as they approached the 103 level.
- TSYs and MBS have fallen further.
- Decent rates this morning created more locking - More locking creates risks of pipeline control reprices - More locking + MBS weakness = more origination = more supply and price pressures for MBS.
Combine all of the above and there are several factors creating risks of additional losses into the afternoon, especially considering its Friday.
We're not especially troubled by the bond market sell-off today, bearing in mind that 10yr yields are "up" to 1.784 and MBS 3.5's "down" to 103-02, both things we probably wouldn't have imagined saying a few weeks ago. Additionally, 3.5's look to have encountered some support as they approached the 103 level.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard
.
Bert Swyers : "i am happy about today, sent all my clients the mortage rate post from MND yesterday and this justifies my position with them. They watch cnbc and think rates will be 2% today"
Victor Burek : "2nd reprice worse from flagstar"
Ken Crute : "2nd reprice, every gain we had yesterday now gone "
Matthew Graham : "boom goes the supplynamite"
Justin Bayle : "Citi just got 1/2 point worse"
Victor Burek : "flagstar worse"
Adam Quinones : "FYI: $2bn+ in loan supply already offered by originators today. Selling #MBS in TBA mkt = hedging against rate risk = basically calling price top"
John M Roberts - TN Consumer : "If it weren't for MND, that would be one of the first things I asked about."
Matt Hodges : "EXCELLENT point JMR"
Jason Sheaffer : "I guess they had to put it on the rate sheet for the mortgage people that don't subscribe to this service."
John M Roberts - TN Consumer : "Putting the cost of 3.635 on the sheet just provides the answer to the inevitble question in tangible form the client can understatnd."
Joe Ridings : "wow, my rates are out and only lost an .125 in pricing."
Matthew Graham : "yeah, lenders want to be well-compensated for the risk of slotting that stuff directly into portfolios without the safety-net of a liquid 3.0 market to work with"
Jason Sheaffer : "i know why we're seeing it, it's just funny, the lowest our sheets have gone for a month is 3.75% and we're at max commission there so suddenly they give us a sheet with pricing below 3.75% which seems pointless since we all knew the buy down would be insane since there is no action in the 3.0 MBS coupon"
John M Roberts - TN Consumer : "yes prof MG because of what MH said"
Matthew Graham : "we all know why JS is seeing the big buy down to 3.625?"
Matt Hodges : "js - your point is what? there is no action on the 3.0"
Jason Sheaffer : "so our rate sheets finally show rates below 3.75% but it's a 3 point buydown to go from 3.75% to 3.625%!"