MBS RECAP: Consolidation Starts Looking Like Correction, But There's a Catch

By: Matthew Graham •

If you happened to tune in for today's mid-day commentary, that was essentially the recap for today.  But who likes opening links?  So here's another version:

The day began with overnight gains led by European bond markets.  Early domestic traders booked profits heading into the 8:20am Treasury 'open' (CME pit trading start time, and the first trades of the day for several classes of bond traders).  Those traders began pushing yields back down (or MBS prices back up) and were soon given a helping hand from the weaker economic data.

But it was really the hefty losses in oil prices that dominated the day (and perhaps the entire week, for that matter).

It was with this chart in mind that I said I would like to see bond markets picking up a bit more ground here, given the 2-day losses in oil and stocks.  One has to wonder where we'd be if everything else was holding steady.

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
99-30 : +0-09
FNMA 3.5
103-07 : +0-08
FNMA 4.0
105-27 : +0-06
Treasuries
2 YR
0.8510 : -0.0240
10 YR
2.2750 : -0.0400
30 YR
3.0570 : -0.0360
Pricing as of 11/13/15 6:23PMEST
Today's Reprice Alerts and Updates
A recap of Alerts and Updates provided to MBS Live subscribers.
9:33AM  :  Unacceptably Small Rally After Data is a Big Clue
MBS Live Chat Highlights
A recap of featured comments from the Live Discussion on the MBS Live Dashboard.
John Tassios  :  "MG is correct, it goes by names that were on the NOTE at the time the Deed was filed."
Matthew Graham  :  "If he's not on the mortgage, why would it be an issue?"
Scott Valins  :  "logic says no way your client is responsible"
Caroline Roy  :  "can anyone weigh in on my previous question: data verify just found a foreclosed property for one of my customers back in '12. Here's the thing. It was his mother's and he inherited it when she passed away. Is that a foreclosure that he has to be responsible for when it comes to purchasing a new home? he was not on the mortgage and it didn't show up on his credit"
Ted Rood  :  "so if you run DU with anything but a TBD address, it's an application."
Ted Rood  :  "exactly. Biggest difference with TRID is once you have the 6 pieces of necessary data, it's an application, whether client wants to apply or not."
Timothy Baron  :  "And if you don't have AUS approval, or don't have enough info to run AUS, why send out any letter, regardless of what you call it?"
Ted Rood  :  "An underwriter told me "DU does the approval, underwriters verify the info input into DU and documentation.""
Ted Rood  :  "That's always been my thought, TB, as long as the data entered into DU is accurate"
Timothy Baron  :  "But really, if you have AUS approval, don't you have a pre-approval?"
Ted Rood  :  "how long until CFPB mandates "pre-approval" forms?"
Ted Rood  :  ""Dear OCD underwriter, Obviously I have to buy another home since I sold mine. I am downsizing to make my life simpler, other than fulfilling your seemingly nonsensical requirements.""