MBS RECAP: 10/4/2011

By: Matthew Graham
MBSonMND: MBS RECAP
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FNMA 3.5
102-23 : -0-14
FNMA 4.0
104-25 : -0-10
FNMA 4.5
106-05 : -0-06
FNMA 5.0
107-20 : -0-05
GNMA 3.5
104-17 : -0-15
GNMA 4.0
106-30 : -0-12
GNMA 4.5
108-28 : -0-07
GNMA 5.0
109-31 : -0-05
FHLMC 3.5
102-20 : -0-14
FHLMC 4.0
104-19 : -0-11
FHLMC 4.5
105-27 : -0-06
FHLMC 5.0
107-06 : -0-06
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 .
3:49PM  :  ALERT: Once Again, Potential Negative Reprices As MBS Hit Lows
Stocks have rallied immensely, with the S&P up over 25 points in 30 minutes. This has exerted a bit of pressure on Treasuries which are in turn exerting a bit of pressure on MBS. By the time that telephone game is done, MBS aren't hurting nearly as bad as the stock rally would suggest, but we are near the lows of the day at 102-23 on Fannie 3.5's. Reprices for the worse are once again a moderate risk.
2:04PM  :  ALERT: Reprice Outlook Turning Neutral. MBS Stable Into Afternoon
This is one of those less common situations in the MBS market where some lenders might reprice for the better and some could reprice for the worse.

Prices have been stable enough for long enough now (even slightly positive) that a few of the lenders who either came out with conservative pricing or who repriced for the worse might offer a small reprice for the better.

But we also wouldn't rule out the possibility of a latent reprice for the worse, although it's getting a bit late for that now. The only other potential surprise could come from a pipeline control reprice.
11:08AM  :  ALERT: Bond Markets Weaker After Bernanke, Potential Reprices For The Worse
Although Treasuries and MBS got moderately weaker after Bernanke's testimony on the Economic Outlook and Monetary Policy, his speech is not the driver of the weakness--at least not directly.

Bond markets were at their best levels of the morning just before 10am when stock markets had opened and moved lower. And that's the gist essentially: bond strength on stock weakness. So when stocks found some support in the 1070's, bonds and MBS lost some ground.

Fannie 3.5's are down 17 ticks on the day at 102-20
10yr yields are up 8 bps at 1.82.

Right now, it's all about the dance between stocks and bonds. The lever has been exceedingly connected of late and if stocks manage to break their highs of the morning, more pain could be in store for bond markets.

But keep this in mind: ONLY NOW are 10yr yields beginning to creep back into the BULLISH end of the trend channel they've been in since the first part of August. It would be UNLIKELY for 10yr yields to close lower than that trend channel for two days in a row.
Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBSonMND Dashboard .
Patrick McCarroll  :  "That is indeed the case with us all "
Ken Crute  :  "gaius, w/o appraisal NO, with appraisal Yes - at least that is the case at my bank "
Jason York  :  "Gaius, I would assume you could if you do a streamline with an appraisal"
Gaius Rossini  :  "adam - curious, do any FHA streamline these days increase balance? like closing costs and such."
Adam Shelton  :  "You can add or subtract a borrower from a streamline, but it becomes credit qualifying"
Daniel Kramer  :  "on a FHA streamline, can one borrower come off the new note, or do they both ahve to stay on the note? they wil both stay on title."
Chip Harris  :  "Payoff + new UFMIP - MIP refund = max loan amount"
Jeff Statz  :  "that too (if no appraisal streamline)"
Chip Harris  :  "Daniel, it's subtracted from the max loan amount"
Jason York  :  "plug it into FHA connection is the easiest way"
Victor Burek  :  "i think it is 80% minus 2% each month they had loan"
Daniel Kramer  :  "2) how is that refund given to borrower? as a closing credit, loan reduction, or mailed to them as a check post closing?"
Daniel Kramer  :  "1) how is the MIP refund calculated?"
Daniel Kramer  :  "can someone give me some help on a FHA streamline refi questions?'"
Victor Burek  :  "bout .3 worse"
Victor Burek  :  "flagstar worse"