MBS RECAP: Bond Markets Successfully Evade Notice Ahead of Bernanke

MBS Live: MBS Afternoon Market Summary

The last two days may as well have not even happened.  With the small exception of Retail Sales, the current week has been all about Bernanke Testimony coming up tomorrow and Thursday, and trading activity has done everything in it's power to reinforce that fact.  Treasury yields and MBS prices have both ground into ever-narrower ranges and with seeming disregard--for the most part--for the data.  Of course Retail Sales was an exception yesterday, and CPI looked like it might have been an exception this morning, but the interesting thing is that in both cases, yields were set to break away from the narrow drift toward 2.52 and the data points brought them back in line.  In other words, bond markets did everything they could to keep a low profile, but in so doing have utterly confirmed just how big a deal the next two days will be (or "COULD be" anyway...  Even the most important events can result in unchanged levels from time to time). 

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.

3:59PM  :  Drifting Uneventfully Toward Close in Slightly Positive Territory

11:06AM  :  ALERT ISSUED: Heads-Up: MBS at Lows of The Morning

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.

Jason York  :  "I recently asked opinions from others about a termite report that was showing damage on a VA loan, and we were requiring a structurally sound letter from a contractor, and the listing agent was getting bent out of shape about needing it, and said she does all VA loans and has never been asked for such a thing. I told why it was needed, and politely pointed out to her on her termite report that is box B is checked, which it was, and damage was present and there were questions, as structural insp"

Jason Zimmer  :  "Jason Harris - pages 5-8 http://portal.hud.gov/hudportal/documents/huddoc?id=4155-1_4_secB.pdf"

Matthew Graham  :  "RTRS- FED'S GEORGE SAYS REDUCING BOND BUYING IN SEPTEMBER AND ENDING THEM NEXT YEAR APPROPRIATE IF ECONOMY DEVELOPS AS EXPECTED "

Matthew Graham  :  "RTRS- FED'S GEORGE SAYS MARKETS HAVE BEGUN TO ADJUST TO THE REALITY THAT FED BOND BUYING CANNOT LAST INDEFINITELY "

Raul Lopez  :  "Jason, I tried to do one of those and if borrower requests 2nd fha loan, will need the following: 1004 appraisal for current property with fha loan, printout from county verifying square ftg; max ltv on current property cannot exceed 75%, otherwise borrower will have to pay down loan. Borrower to provide loe on why needing a new fha loan on the basis of Family size. "

Jason Harris  :  "Anybody have the guides handy on what is allowable for more than one FHA loan? I know it is something like can't have two with reasonable commuting distance and size of family but i wanted to make sure I had a handle"

Jeff Anderson  :  "REPRICE: 1:58 PM - Chase Better"

Chris Kopec  :  "Good points, Chiz. We originators have our opinions on where rates are, and whether they are too high, but really, it's going to be the consumer who tells us whether rates are aligned with market conditions."

Michael Gillani  :  "No, I totally agree this industry is cyclical and will survive. But given the state of our economy, which hasn't existed in any of our lifetimes, the rising rate environment, especially following where it's been, will cause a dramatic slowdown in business. So you will have your mass layoffs due to the hiring spurts we've had, plus the meager housing recovery we supposedly have right now will all but cease to exist. I'm not saying nobody will buy, but dramatically fewer than are buying today a"

Steve Chizmadia  :  "Purchases will still be out there VB, but some people will certainly put the brakes on. Many of us here have had that experience with clients we are/were working with already. "

Steve Chizmadia  :  "All cyclical. This industry is notorious for hiring in masses and doing the opposites depending on the volume, which obviously is tied to interest rates, so I agree"

Victor Burek  :  "i don't think it would kill the purchase side, but it will slow it"

Michael Gillani  :  "Not enough to generate enough volume to avoid mass layoffs in the industry. Without a substantial peeling back of guidelines and overlays, rates at 5%+ will kill the housing recovery on the purchase side and all but shutdown refinances nationwide."

Victor Burek  :  "i think you still could Gaius, but if we are in a true rising rate environment, i could show them the benefit of paying costs to secure a lower rate"

Gaius Rossini  :  "now the question is, VB, can you refinance them (let's assume 150K, 720 FICO, in CA or NV or WA or something without a recording tax like NY), with no cost to the borrower"

Victor Burek  :  "agreed Gaius, anyone over 6% would still benefit with a refi"

Gaius Rossini  :  "assuming they meet the delinquency requirements of course."

Gaius Rossini  :  "for the '05-'08 borrowers with 6.5% mortgage rates... they can actually save money by refinancing, even now, into a 20-year"

Justin Harward  :  "I think so. Big Ben could help us tomorrow but his recent track record would suggest otherwise"

Andy Pada  :  "big lock in day for us, anyone else?"

Matthew Graham  :  "not the NAHB survey apparently "

Ted Rood  :  "So rates going up 116 bps will impact housing demand after all? Who would have guessed!"

Curt Sandfort  :  "sounds like potential for builder bailout, or is the issue just with mixed use/commercial use"

Clayton Sandy  :  "has anyone done an investment purchase where the builder is leasing back the property for a year or so. U/W having issue with it being mixed use."

Mike Ford  :  "curt yes sounds like it..for 5yr term"

Curt Sandfort  :  "so is Cordray going to be confirmed today?"

Jeff Anderson  :  "Too early for a bounce or POMO? Never too early for a positive bounce. "

Jeff Anderson  :  "It would be nice to bounce off yesterdays highs. POMO fluctuations?"

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