MBS RECAP: Surprisingly Unchanged After Bumpy Ride
By:
Matthew Graham
•
MBS Live: MBS Afternoon Market Summary
The past two days have been quite something for MBS markets--not in any meaningful way, but certainly frustrating. Reason being: BOTH days have opened at higher levels than every single session since last Tuesday's NFP and BOTH have closed below the lowest closing levels from any of those days. I sometimes mention "inside days" (where trading ranges are contained inside the previous sessions' range). These were two examples of "outside days," and not just outside the previous session, but outside most of the past two weeks!
That's not all that uncommon after holding a range that's as narrow as most of the past two weeks, but it's far less common to see it two days in a row. Imagine you're a bowling pin that's been watching gutterballs all day. Then you and your nine buddies suddenly get knocked over. Thankfully you get picked back up shortly thereafter and can get back to the business of watching gutterballs, but wait! Another strike!
These things happen in bowling and MBS, but they're no fun for the pins or the MBS-watchers respectively. It may not have felt like it if you were watching too closely, but MBS ended up in positive territory by the end of the day.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
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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.
12:57PM :
Once Again, Losses Stabilize; Trending Sideways Now
After declining to the worst levels of the day into the 11am hour, MBS and Treasuries have pulled back from the brink. While the remainder of the day's momentum is uncertain at the moment, we can at least say that the most abject selling pressure seems to be behind us.
Fannie 3.5s are near unchanged on the day at 102-16 and 10yr yields remain 3bps higher at 2.556. Negative reprice risk is a bit of a toss up, but it's less pronounced than it was at the time of previous alerts/updates.
Fannie 3.5s are near unchanged on the day at 102-16 and 10yr yields remain 3bps higher at 2.556. Negative reprice risk is a bit of a toss up, but it's less pronounced than it was at the time of previous alerts/updates.
11:32AM :
ALERT ISSUED:
Technical Levels Broken Again; More Selling; More Negative Reprices
Bond markets made a decent attempt to hold the ground marked by 2.565 in 10yr yields. While 10's are there presently, they just broke to 2.571 briefly.
Fannie 3.5s are handily outperforming Treasuries, but not enough to avoid being sucked back in to negative territory, currently down 1 tick at 102-14.
The first round of negative reprices is coming across right now. If your first rate sheet of the day was around 10am or earlier, and if you haven't yet seen a negative reprice, you probably will. The only exceptions would be lenders who had already responded to the morning's sell-off in their first rate sheet of the day. This won't be printed on the front page as a courtesy so you'd have to extrapolate based on the difference from yesterday's rates and/or relationship to other rate sheets you may have access to.
Fannie 3.5s are handily outperforming Treasuries, but not enough to avoid being sucked back in to negative territory, currently down 1 tick at 102-14.
The first round of negative reprices is coming across right now. If your first rate sheet of the day was around 10am or earlier, and if you haven't yet seen a negative reprice, you probably will. The only exceptions would be lenders who had already responded to the morning's sell-off in their first rate sheet of the day. This won't be printed on the front page as a courtesy so you'd have to extrapolate based on the difference from yesterday's rates and/or relationship to other rate sheets you may have access to.
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.
Curt Sandfort : "as a creditor, the "credit for rate" may be left blank, so it could not be reduced"
Curt Sandfort : "well, as a broker the "credit for rate" is shown on the GFE and is probably just reduced"
John Paul Mulchay : "You had better have solid, complete documentation of the entire transaction if you charge. Need to show it wasn't company/investor delay or you're sunk. If brwr delay, they can pay, is my understanding. "
tmatthews : "Has anyone been questioned on the CFPB stance concerning charging the borrower for a rate lock extension fee and redisclosing the fee on the GFE as a change circumstance."
Matthew Graham : "RTRS- NOMINATION OF REPRESENTATIVE MEL WATT TO LEAD THE FEDERAL HOUSING FINANCE AGENCY BLOCKED IN THE U.S. SENATE "
Matthew Graham : "RTRS- U.S. SENATE REPUBLICANS POISED TO BLOCK NOMINATION OF REPRESENTATIVE MEL WATT TO LEAD THE FEDERAL HOUSING FINANCE AGENCY; VOTING CONTINUES "
Gus Floropoulos : "if a pre approval is done properly then it should be like that MD...I agree with Drews"
Mike Drews : "my bank does pre-purchase committments..then when the buyer finds a home, you just need title and an appraisal."
Christopher Stevens : "Seems that is a lot of responsibility on the LO to handle ATR requirements especially debt and income"
Clayton Sandy : "not sure, just a thought. How did we come to say they are prequalified? Who knows what they could ask. "
Clayton Sandy : "With all the documentation that is going to be required, that prequal letter has your name on it."
Christopher Stevens : "will the QM rules be the end of pre-qualifications LO's do for clients/Realtors?"
Matthew Graham : "@Kris, I think next week's NFP is probably more relevant than short term technicals, but the risk is that short term technicals carry us weaker only to get an unfriendly NFP."
Joshua Crater : "dont chase the market"
Joshua Crater : "Rate are in a holding pattern, if your client is happy then lock"
Kris Langlie : "Anyone care to share any opinions on lock/float 60 days out? Should I be scared of further weakness in MBS since we broke the recent trend or hold out hope for next Friday's NFP?"
Scott Rieke : "REPRICE: 11:20 AM - Green Tree Worse"
Eric Franson : "REPRICE: 11:18 AM - Wells Fargo Worse"
Christopher Stevens : "This article speaks to that JA http://www.bloomberg.com/news/2013-10-28/tight-mortgage-credit-may-be-worse-than-crisis-ranieri-says.html#"
Jeff Anderson : "What's the over under in 2014 when they start complaining that the new guides have decreased their number of sales and reg's need to be loosened up? I say mid-February."
Victor Burek : "REPRICE: 11:11 AM - Plaza Worse"
Jeff Anderson : "REPRICE: 11:10 AM - Chase Worse"
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