MBS reminder: Reprices reported

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Afternoon Market Updates

A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard.

3:26PM  :  New Mortgage Rate Watch Post

3:13PM  :  ALERT: Additional Reprice Risk. MBS Hit New Lows

Moments after the 3pm official close, MBS and TSYs are well into their worst levels of the day. FNCL 4.5's are down 5 ticks on the day at 103-13 and 10yr notes are up to 3.202, a 4.5 basis point increase on the day. Lenders that haven't already repriced for the worse are now more likely to do so.

2:51PM  :  New MBS Commentary Post

1:47PM  :  ALERT: Negative Reprices Reported. Bonds at Weakest Levels

The slight bit of bearish bias in bond markets following the 3yr note auction just took another small and incremental into negative territory. The 10yr note is now just barely ABOVE 3.19 and FNCL 4.5's are at their lows of the day at 103-15. Loan pricing was mixed this AM. Some lenders owed gains from yesterday while others were flat on first release. With FNCL 4.5s -3/32 and 4.0s -6/32, reprices for the worse are possible from the lenders who withheld rebate yesterday afternoon. If your pricing was dinged this morning, you have a few more ticks to work with...if the downtrend continues you too are likely to see unfriendly recalls.

1:29PM  :  Auction Inspires Limited Directionality

Despite a reasonably normal 3yr note auction bond markets first move following the auction was to their weakest levels of the day with FNCL 4.5's falling to 103-14 and 10yr notes getting almost as high at 3.19. But both have moderated somewhat with 4.5's currently at 103-16, and 10yr notes at 3.182. It's still a moving target however, and if we had to guess, we'd say it looks a bit more bearish than bullish as far as bonds are concerned. If 10's tick further back toward 3.19, or MBS back toward 103-14, reprices for the worse would become more likely.

1:11PM  :  New MBS Commentary Post

1:04PM  :  3 Year Treasury Note Auction Results.

* U.S. SELLS $32 BLN 3-YEAR NOTES AT HIGH YIELD 1.000 PCT, AWARDS 20.92 PCT OF BIDS AT HIGH *U.S. 3-YEAR NOTES BID-TO-COVER RATIO 3.29, NON-COMP BIDS $25.87 MLN * US TREASURY - PRIMARY DEALERS TAKE $16.60 BLN OF 3-YEAR NOTES SALE, INDIRECT $10.46 BLN

12:48PM  :  Lacker: even modest recovery can be inflationary

ARLINGTON, Va., May 10 (Reuters) -- The U.S. economic recovery is humming along despite high unemployment and depressed housing activity, making it key for Federal Reserve policymakers to remain vigilant about budding hints of inflation, Richmond Fed Bank President Jeffrey Lacker said on Tuesday.
Lacker said improved household and business spending, as well as strong exports led by demand from fast-growing emerging nations, was helping to support the economic recovery.
A self-described inflation hawk who is not a voter on this year’s Federal Open Market Committee said he expects energy prices to stabilize or ease a bit, allowing overall consumer price growth to trend back toward his preferred goal of around 1.5 percent.
"We should not take that outcome for granted, however. I would be concerned if I expected substantial further price increases, but at this point, futures markets are pricing in modest declines in petroleum products," Lacker told the Northern Virginia Regional Forum.
"Having said that, our experience over much of the last decade demonstrates that a flat futures curve does not preclude further price hikes." (Reporting by Pedro Nicolaci da Costa; Editing by Neil Stempleman)

12:30PM  :  Moderate Weakness Persists Ahead of Auction

10yr notes are effectively at their highs of 3.18 with just over 30 minutes to go before the 1pm 3yr note auction. FNCL 4.5's are slightly above their lows of the day currently 1 tick down versus yesterday at 103-17. This has also proven to be their preferred pivot point of the day with more touches here than anywhere else. Risks of negative reprices for the worse are somewhat elevated since we last updated you but are most likely to change (for better or worse) after we see how accounts bid for the lowest yielding 3yr in 4 months.

11:17AM  :  New MBS Commentary Post

11:14AM  :  ALERT: First Signs of Negative Reprice Pressure

With the passing of this morning's data, we see that the week indeed looks to officially begin with the auction cycle. Volume is light and trading patterns are technical. The slightly higher yields than yesterday, consolidating around 3.17 suggest a bond market that's in the process of getting in position for today's auction. FNCL 4.5's are down a tick on the day at 103-17 and FNCL 4.0's are down 4 ticks at 100-10. The former is near previous lows while the latter is at the lowest level of the day. With 4.5's only down 3 ticks from peak to trough, it's not overly likely that we'll see reprices for the worse, but we're perhaps at the "early warning sign" stages.

Featured Market Discussion

Adam Quinones  :  "i need a shoe shine."

Mike Drews  :  "wf reprice"

Michael Tadros  :  "Sounds smarter than half the people selling the product"

John Rodgers  :  "My customers are soooo smart. After giving my client the caps on a 7 year ARM he responded with .................5% - 1st adjustment -> This is the maximum increase at year 7, which coincides with the total maximum lifetime increase over the 30 year loan period. Therefore the worst possible rate could be 9.125%
2% - subsequent adjustments -> This is the maximum increase at year 8 and after wards up to a maximum total increase of 9.125%.
5% - life cap -> Maximum cap at 9.125%.
Index – 1 yea"

Brent Borcherding  :  "Sierra Pacific worse .15"

Victor Burek  :  "5/3rd repriced for the worse"

Andy Pada  :  "Cash window at the GSEs only off by 4 or 5 bps."

Victor Burek  :  ".15 worse at flag"

Victor Burek  :  "flagstar worse"

Jill Statz  :  "PF .125 worse"

Brent Borcherding  :  "I locked 3 this morning, inside 30 days, I can renegotiate if necessary, but I believe there's greater risk of short term rise."

Shane  :  "MG & AQ - i just cancelled my subscription with one of your competitors (not sure if you would consider them a competitor or not tho)...now lets bring on 2.0!"

Adam Quinones  :  "quote " With 4.5's only down 3 ticks from peak to trough, it's not overly likely that we'll see reprices for the worse, but we're perhaps at the "early warning sign" stages.""

Matthew Graham  :  "benchmarks broke out of support, 4.5's and 4.0's hit lows of day, always going to be an "on toes" kinda time. "

Matt Hodges  :  "pricing likely occurred 3 tic higher and it looks like an ugly trend WC. If i were secondary, I'd want to get in front of it"

Adam Quinones  :  "just an early warning to be on your toes."

William Crawford  :  "We are only down 2 tics, why the negative reprice warning?"

Chip Harris  :  "The report we provided currently at this time is only designed to gather your client information and is not designed to be uploaded into the NMLS website at time. Unfortunately for now you will need to manually input the data into their site until future updates will allow for a xml upload."

Chip Harris  :  "Update on the Call Report from Calyx web support:"

Matthew Graham  :  "DEALERS SUBMITTED $25.66 BLN OF TREASURIES FOR CONSIDERATION IN FED PURCHASE -NY FED"

Matthew Graham  :  "FED BOUGHT $6.68 BILLION OF TREASURIES MATURING BETWEEN MAY 2015 AND SEPT 2016 -NY FED"

Interest mortgages: After the end of the day unchanged Reprices

It was exciting day
the bond market.

Early in the session environment looked unfriendly interest mortgage.  Stocks have been rallying and first round sheets rates released by the lenders were worse than yesterday 's.  But then the tide turned after the rush of economic data and a header message events-10: 00 in the morning.  Stocks soon lost steam and the major indexes fell. Helped interest mortgage benefit from another investor ' flight safety ' to the bond market. and gave an opportunity for lenders that reprice to a better zaprzepaszczeniu losses early in the morning and left loans prices broadly unchanged vs. tenders yesterday. Best execution does not budge, and in most cases, closing costs or not.

"Flight to safety" happens when investors are nervous about the owner of the risky assets like stocks, but you don't want to miss out on to earn a return on their funds, so they give their money to secure the Government guaranteed debt of the Treasury to provide a safe haven investments. Treasury yields fall as benchmarking at the request of the purchaser "flight to safety", such as securities prices, mortgage move higher in Unison. This allows lenders to reprice them better rates sheets and gives developers the ability to offer borrowers lower interest rates meeting fence mortgages or more competitive costs of closure.

The current market: "best execution" of conventional 30 year fixed
mortgage rate is 4.87%.  For those looking to buy down their
rate to 4.75%, this quote leads of higher costs of closure. Initial costs
permanent collection down the rate to 4.75% is not good for many
of the applicant. It would be generally only we fixed floatdown if you plan to
Hold your new mortgage for more than the next 10 years.  Ask your loan
officer on the run to benefit analysis on any origination points they may
require to cover fixed float down fees. For FHA/VA 30 year fixed ' Best
"It is still a 4.75%. 15 year best buy fixed conventional loans
between 4.125% and 4.25% but 4.25% is more efficient from the point of view of floatdown
benefit costs. The five-year arms are preferably priced at 3.625%.

The previous guidelines: If we were "in limbo"
extension of the recent rally at the end of last week, we are now likely to be
outwearing our welcome.  The environment is generally positive and
drama-free interest rate mortgages now a few weeks. So that one has
Wonder when can we see a natural push back on the bond market. The rally has
Gone on long enough, so bit correction is possible, even if more
term trend remains borrower-friendly. From this point of view, with a large impact on the
Setting economic events coming this week and "Flight to safety"
be examined, it is a good week looking at the block. Especially with the feet
their best levels in a month and provided that the necessary main flow
on the secondary market, mortgage Best execution rates fall below current
levels. Employment situation report on Friday is big-ticket business
the data this week, with powers to push rates higher or lower depending on how
the market is it. Full ECON calendar and MBS market
COLOR

NEWguidelines: many of today's reflection in the bond market was
You can assign short-term trading strategies, which may or may not represent the shifting bias towards
lower rates in the coming months.  We are still awaiting confirmation of the extension of the recent rally.  Report of the employment situation is always high-risk event for interest rate mortgages.  We are encouraged about the possibility of recovery of current mortgage rate outside including, but not expecting it to take shape in the quick timeline. If the decision is Lock/float
more direct, is a great moment to be blocking.  Long termers have some thinking to do
and most importantly, you need to decide what would be the sacrifice cost/rates
before locking the loss in exchange for the chance to see if rates can be improved
further here.

What should you consider before one
thoughts about writing recovery rate?

1. What is NEEDED? Rates may not be as much as you can recover
want/need.
2. When YOU NEED IT by? Rates may not be as fast as you can recover
want/need.
3. how to HANDLE STRESS? Whether you're ready for more VOLATILITY in the
on the secondary mortgage market?

"Best execution" is the most effective combination of Note
offered rates and points paid at closing. This rate is calculated on the basis of a Note
time required to recover the points paid child-resistant fastenings (rabat) vs.
monthly savings permanently purchase down mortgage rates by 0.125%. 
When deciding whether to pay points, the borrower must have an idea
If you intend to maintain their mortgage. For more information, ask the
Outsourcer to explain the results of their "benefit analysis"
fixed cost rate buydown.

Important mortgage rate Disclaimer: loan "best execution"
offers made available to the above are generally regarded as a more aggressive
primary mortgage. The originators of loans only will be able to offer these
rates for conforming loan amounts to highly qualified borrowers, who have
FICO score above 740 Center and sufficient equity in their home in order to qualify
refinance or large enough savings to cover down payments and closing
costs. If the conditions of your loan, call each level of credit risk pricing adjustments
(LLPAs), quote the rates will be higher. If you do not belong to
"perfect borrower" category, make sure that you can ask the developer of the loan
for an explanation of the features that make Your loans more expensive.
"No point" of the loan does not mean "no cost" loans. 30 Best
interest mortgages conventional/FHA/VA year established still contain closing costs such
as third party fees + title fee + transfer and recording. Don't forget to
fiscal intense frisking that comes together with the insurance process