MBS RECAP: If Bond Markets Were Playing Poker, Today is a Knock

By: Matthew Graham •

After Friday's orgiastic frenzy of bet-making and profit taking, bond markets sat back in their seats and abstained today.  In poker terms, this is a "knock" or a "check" where no bet is made if it's not required.  In essence, the big hands were played with gusto on Friday and now we're waiting to see how the game unfolds.

At stake is a break outside the 3 month range, which looked to be a legitimate possibility on Friday when rates shunned the stronger jobs data and continued to the lowest levels possible without actually breaking the range.  Today saw a slight pull-back, but only after stronger data (ISM Non-Manufacturing) actually did what stronger data typically does: cause weakness for bonds.

Before ISM, trading levels were edging into even better territory, but fell back just inside the confines of the long term range afterward.  There were no further reports, events, or headline worth reacting to and MBS drifted sideways for the entire remainder of the day, in an excruciatingly tight range.

MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
MBS
FNMA 3.0
97-28 : -0-03
FNMA 3.5
101-29 : -0-02
FNMA 4.0
105-02 : -0-01
Treasuries
2 YR
0.4225 : -0.0075
10 YR
2.6077 : +0.0147
30 YR
3.4058 : +0.0378
Pricing as of 5/5/14 4:15PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
2:13PM  :  Sideways in a super narrow range. Where do we go now?
10:04AM  :  ALERT ISSUED: Bond Markets Shoot to Weakest Levels Following ISM; Negative Reprice Risk Increasing
9:09AM  :  Bond Markets Slightly Stronger After Quiet (Nonexistent) Overnight Session
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
Christopher Stevens  :  "10YR flatlining today"
Andrew Benson  :  "It's dead, Jim."
Chip Harris  :  "Here is a link that a borrower can go to and get transcripts and IRS account activity, etc. Very helpful."
Chip Harris  :  "http://mndne.ws/1uqXgLb"
Chip Harris  :  "gift of equity can only be froma family member right?"
Ted Rood  :  "correct. Not from the friendly builder or home seller who is just generous in nature."
Roland Wilcox  :  "Just spoke with borrower who came across listing in which listing agent requires buyer to use listing agents preferred lender - is this a respa violation? "
Steve Chizmadia  :  "You cannot require them to use a lender. You can however require them to get pre-approved by a preferred lender"
Michael Prime  :  "I believe its legal. Builders do it all the time."
Frank Hanna  :  "a buyer can not be required to use any specific lender, just like title insurance, homeowners insurance, or alike. "
Steve Chizmadia  :  "No way it is legal for a Realtor to force them to use a lender"
Matt Hodges  :  "its perfectly acceptable for sellers to require a prequal from their preferred lender, or in the case of a REO, from their mortgage company"
Hugh W. Page  :  "Builders only require the use of their lender (or title company) in order to receive the benefits of closing costs assistance, etc. Seller can do the same. Can't outright require the use of a particular lender."