MBS MID-DAY: 9/28/2011

Mortgagee Letter 11-35
Subject: Annual Mortgage Insurance Premium for Loans With Terms of 15 Years or Less and a Loan to Value (LTV) ratio of 78 Percent or Less at Origination
Purpose: This Mortgagee Letter provides clarification on Annual Mortgage Insurance Premiums for loans with forward amortization terms of 15 years or less and an LTV of 78 percent or less at origination…

Mortgagee Letter 11-36
Subject: Elimination of HUD Headquarters concurrence of affordable housing programs with borrowers whose household income exceeds 115 percent of the area median income (AMI).

Purpose: This Mortgagee Letter (ML) amends guidance provided in ML 1994-02, Secondary Financing Provided by Nonprofit Agencies and Transferability Restrictions Permitted for Property with a HUD Insured Mortgage, which required the local HUD office to obtain concurrence from HUD Headquarters for the approval of affordable housing programs with borrowers whose household income exceeds 115 percent of the AMI…

From the release: "New orders for manufactured durable goods in August decreased $0.2 billion or 0.1 percent to $201.8 billion, the U.S. Census Bureau announced today. This decrease, down two of the last three months, followed a 4.1 percent July increase. Excluding transportation, new orders decreased 0.1 percent. Excluding defense, new orders decreased 0.1 percent.

"Primary metals, down following five consecutive monthly increases, had the largest decrease, $0.2 billion or 0.8 percent to $24.2 billion."

We were already a bit skeptical about the market-moving potential of economic data today, but the fact that today's Durable Goods was 0.1 percent away from consensus means we didn't get to test that theory much.

After an overnight session that did little to alter yesterday's latest MBS and TSY levels, things continue to chop around in a similar area this morning:
- Fannie 3.5's are 3 ticks lower at 102-04
- Fannie 4.0's are 2 ticks lower at 104-16
- Ginnie 3.5's are 2 ticks lower at 103-23
- 10 yr notes are just over 1 bp higher at 1.994

Rate sheet offerings could be relatively unchanged if MBS don't lose much more ground. But just a few ticks lower and we'd be revisiting last night's chart linked below, hoping for a bounce: