MBS RECAP: Similar Trading Day, More Resilient Afternoon

MBS Live: MBS Afternoon Market Summary

In several ways Wednesday's session was quite similar to Tuesday's.  European and Asian markets coaxed Treasury yields lower overnight.  MBS opened several ticks into positive territory, but lagged Treasury gains (ultimately firming up into mid-day weakness).  The morning was uneventful, with little attention paid to data, events, or Fed speakers.  Rather, bond markets generally traced out lower magnitude moves of equities markets, leveling off in the afternoon and briefly pushing back against the weakness heading into 1PM.  But whereas yesterday provided a rather sharp drop-off for MBS prices between 2-4pm, today has seen them do more to hold their ground and level off.  This has more to do with stocks stalling out and Treasuries holding their own ground than any sort of organic strength in MBS.  All of the opportunistic "spread tightening" took place in the morning hours.

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.

Afternoon Reprice Alerts and Updates

Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.

2:00PM  :  ALERT ISSUED: Negative Reprice Risk Picks Up Slightly. MBS At Lows

Live Chat Featured Comments

A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.

Bryce Schetselaar  :  "REPRICE: 2:21 PM - Sierra Pacific Worse"

Steve Chizmadia  :  "REPRICE: 2:10 PM - Sun West Mortgage Worse"

Matthew Graham  :  "RTRS - FED SAYS WAGE, PRICE, EMPLOYMENT CONDITION TRENDS LARGELY UNCHANGED IN RECENT WEEKS, INPUT PRICES STEADY OVERALL "

Matthew Graham  :  "RTRS- REAL ESTATE ACTIVITY HAS EXPANDED OR HELD STEADY, 6 DISTRICTS SAID CREDIT QUALITY HAD IMPROVED - FED BEIGE BOOK "

Matthew Graham  :  "Beige Book : RTRS - FED SAYS RETAILERS ACROSS COUNTRY REPORTED SOME CONSUMER CAUTION DUE TO UNCERTAINTY OVER FISCAL POLICY "

Nate Miller  :  "AB that's on new deals 78% = exempt from annual but still have to pay UFMIP. I believe JD you are good, the old rule was under 90% as you stated. "

Gus Floropoulos  :  "78% is if u do refi, not stream, on a 15"

Justin Dudek  :  "was that the previous guideline though? for some reason i thought 90% was the no MI barrier in the past"

Andrew Benson  :  "get it to 78 and you are goldne"

Justin Dudek  :  "78.5% LTV on FHA 15 year streamer that was endorsed prior to 6/09. Would that be grandfathered in off the old rule of no MI under 90%?"

Rob Clark  :  "Provident had priced a little off this morning anyways even though the market did not move. Then they reprice for the better to get people to lock. A very old secondary trick."

Clayton Sandy  :  "REPRICE: 12:56 PM - Provident Funding Better"

David Z.  :  "I think purchases pick up, as do cash out and heloc consolidation regards less of rates"

Gus Floropoulos  :  "people will always need money, regardless where rates are"

Jason Adams  :  "Where do you see markets in a couple of years? I don't see enough purchase business to keep all originators feed. If we have higher rates and no value, we have no more rate and terms or cash out refis."

Matthew Graham  :  "Yes, it still holds up. Secondary market appreciates predictability of cash-flows and frowns upon any attempt to forcibly change that predictability. It has a net-negative impact on prices if it happens. Yes TM, because of prepayment. If something with a price over PAR pays off faster than expected, investor loses money, servicers lose money. "

David Z.  :  "Hi MG, is the Fed not still the main MBS investor? So does that really hold up anymore?"

Matthew Graham  :  "Congress could change the date, but they couldn't force lenders to participate. Some might, but it has a net-negative effect on rates. Pick your poison."

Matthew Graham  :  "eligibility date reminds me of the last time the convo came up in chat. "Gaius Rossini (10/24/12 9:07AM): the current date is something of a covenant between the fhfa and mbs investors.""

David Z.  :  "I did it Tom, the acct set up is super simple. Telling everyone I can about it"

Bryce Schetselaar  :  "If they didn't make you set up an account, there would probably be more"

Dustin McAlister  :  "va high seem to be stopping at about 1 in rebate here on 3.25"

Michael Gannon  :  "Va high balance get hammered over here pretty good"

Tim Mitchell  :  "i'm having problems with my high balance VA IRRRL's. All my other loans have come back into range but these are still 100 bps off, anyone else having the same problem?"

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