Renting

Apache is functioning normally

Data dependent… That’s a phrase that is all too prevalent in financial markets and among members of the Federal Reserve.  It refers to the fact that economic data will guide the future path of interest rate decisions.  

While rates always depend on data, the data outlook isn’t always as uncertain as it has been in the past few years.  At times, we’ve been waiting for inflation and job growth to stop surging.  At other times, we’ve been waiting for them to confirm a move in the other direction.  Either way, there are a few reports that financial markets watch more closely than others and today’s jobs report is one of the best examples.

When job growth is higher than expected, the default reaction is for rates to move higher.  The bigger the “beat” (which refers to the actual job count versus the median forecast among multiple economists), the bigger the rate jump tends to be, on average.  With that in mind, today’s payroll count of 303k versus a median forecast of 200k was a big beat!  

It was no surprise to see bonds lose ground and rates move higher, but the size of today’s rate increase is much more curious.  The average lender was only modestly higher in rate. 

It’s curious, but it may not be incredibly surprising.  Again, it’s all about the data, and although Friday’s jobs report is definitely one of the two most important reports on any given month, next week’s Consumer Price Index (CPI) is bigger.  Today’s resilience could have a lot to do with the market waiting to see those results next Wednesday.

Source: mortgagenewsdaily.com

Apache is functioning normally

In the March rate update, we discussed why Federal Housing Administration (FHA)-sponsored Home Equity Conversion Mortgages (HECMs) utilize two interest rates. The “expected rate” is unique to reverse mortgages and is calculated by adding the lender’s margin to the weekly average 10-year constant maturity treasury (CMT). This rate is used, among other things, to help determine a borrower’s initial principal limit (borrowing capacity).

For such a critical number, little has been written about the expected rate and its impact on HECM loans. In this month’s update, we’ll discuss two features you may not know about expected rates.

HUD publishes tables using expected rates in 1/8% increments

Because U.S. Department of Housing and Urban Development (HUD) look-up tables are published using expected rates in 1/8% increments (6.625%, 6.75%, 6.875%, etc.), we must use the nearest 1/8th percent (0.125%).

For example, a 2.50% lender margin combined with last week’s 10-year CMT average (4.22%) would produce an expected rate of 6.72% today. When looking up the borrower’s principal limit factor, we would use 6.75%. Here are sample lender margins and expected rates for the period from Apr. 2 to Apr. 8, 2024.

Because we use the nearest 1/8%, HECM proposals often don’t change from week to week unless the 10-year CMT moves enough to push expected rates beyond a rounding threshold.

Higher or lower expected rates impact principal limits

Higher expected rates reduce borrowing capacity, while lower expected rates increase borrowing capacity. So, it is understandable that HECM prospects want to know how unlocked expected rates could impact their principal limit.

We cannot determine the precise percentage until we know both the relevant age and the expected rate. Depending on those two factors, the impact could be 0.4% to 0.9% of a prospect’s home value. Nevertheless, the average impact of a 1/8% change in the expected rate is a little over 0.6%.

For example, a prospect with a $500,000 home could see their principal limit drop by an average of $3,000 (0.6%) from a 1/8% increase in expected rate. Conversely, their principal limit could increase by an average of $3,000 from a 1/8% decrease in the expected rate until that rate is locked.

April 2024 update

The 10-year CMT average dipped to 4.13% for one week in March, offering higher principal limits for new applications and some loans in processing. While the index rate in effect for April 2-8 is 9 basis points higher (4.22%), the 10-year CMT has been relatively flat since early February.

Example

With a 2.5% margin and resulting HECM expected rate of 6.72% (Effective 4/2/24 – 4/8/24), a 73-year-old homeowner with a $500,000 home appraisal for would qualify for 39.2% of the appraised value of the home. This equates to a principal limit of $196,000 as shown here:

  • Expected rate: 6.72%
  • Youngest age: 73
  • Home value: $500,000 
  • Principal limit: $196,000

For updated principal limit calculations like this, a loan originator can use RapidReverse® (available on any Apple or Android mobile device) or use any HECM loan origination system of their choice.

Note: 2.5% lender margins are used for education purposes only. HUD expected rate look-up tables use the nearest 1/8% for calculating HECM principal limits. 

This column does not necessarily reflect the opinion of Reverse Mortgage Daily and its owners.

To contact the author of this story: Dan Hultquist at [email protected]

To contact the editor responsible for this story: Chris Clow at [email protected]

Source: housingwire.com

Apache is functioning normally

Thursday is shaping up to be a calmer and less eventful trading day than the two most recent examples.  It’s similar in the sense that there was some weakness to overcome this morning, but pleasantly different in the sense that the weakness was overcome very quickly.  The morning’s economic data played some role in the resilience with both Challenger Job Cuts and Jobless Claims conveying some incremental labor market weakness.  With no other scheduled data today and no fireworks expected from the afternoon’s Fed speakers, the focus is decidedly shifting to Friday morning’s jobs report.

Source: mortgagenewsdaily.com

Apache is functioning normally

LOS ANGELES (AP) — Home loan borrowing costs fell for the second week in a row, pulling the average long-term U.S. mortgage rate to its lowest level since early February — good news for prospective home shoppers as the spring homebuying season gets underway.

The average rate on a 30-year mortgage dropped to 6.74% from 6.88% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.60%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also fell this week, pulling the average rate down to 6.16% from 6.22% last week. A year ago it averaged 5.90%, Freddie Mac said.

“Despite the recent dip, mortgage rates remain high as the market contends with the pressure of sticky inflation,” said Sam Khater, Freddie Mac’s chief economist. “In this environment, there is a good possibility that rates will stay higher for a longer period of time.”

The recent pullback in rates follows a string of rate increases. Mortgage rates rose for most of February as stronger-than-expected reports on inflation and the economy fueled speculation among bond investors that the Federal Reserve would have to hold off on cutting interest rates longer than expected.

The Fed has signaled that it will likely cut its key interest rate this year, once it sees more evidence that inflation is falling sustainably back to its 2% target. The Fed’s main interest rate is at its highest level since 2001.

Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates can influence rates on home loans.

Economists expect that mortgage rates will ease further this year, though most forecasts have the average rate on a 30-year mortgage going no lower than 6% by the end of the year. But that’s not likely to happen until the Fed begins cutting its short-term interest rate, something Wall Street is largely betting won’t happen until June, according to data from CME Group.

Despite the choppy trajectory in mortgage rates this year, the average rate on a 30-year home loan is still down from the 23-year high of 7.79% it reached in late October.

“Rates are much lower than they were last fall when they hovered near 8%,” said Lisa Sturtevant, chief economist at Bright MLS. “Any downward trend in rates later this spring will bring more buyers and sellers into the market.”

The decline in rates since their peak last fall has helped lower monthly mortgage payments, providing more financial breathing room for homebuyers facing rising prices and a shortage of homes for sale.

Lower rates helped lift sales of previously occupied U.S. homes by 3.1% in January versus the previous month to the strongest sales pace since August.

Still, the average rate on a 30-year mortgage remains well above where it was just two years ago at 4.16%. That large gap between rates now and then has helped limit the number of previously occupied homes on the market by discouraging homeowners who locked in rock-bottom rates from selling.

Source: apnews.com

Apache is functioning normally

Mortgage application activity drifted lower again last week, the third straight week of mostly fractional declines. The Mortgage Bankers Association’s Market Composite Index, a measure of application volume, decreased 0.6 percent on a seasonally adjusted basis from one week earlier and 0.1 percent before adjustment.

The Refinance Index declined by 2.0 percent from the previous week and was 5.0 percent lower than the same week one year ago. The refinance share of mortgage activity slipped to 30.3 percent from 30.8 percent the previous week.

The seasonally adjusted Purchase Index ticked down by 0.1 percent week over week but did move 1.0 percent higher on an unadjusted basis. Purchase activity was 13.0 percent lower than during the same week in 2023.   

“Mortgage rates moved lower last week, but that did little to ignite overall mortgage application activity. The 30-year fixed mortgage rate declined slightly to 6.91 percent, while the 15-year fixed-rate decreased to its lowest level in two months at 6.35 percent,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Elevated mortgage rates continued to weigh down on home buying. Purchase applications were unchanged overall, although FHA purchases did pick up slightly over the week. Refinance applications decreased to fall 5 percent below last year’s pace.” 

Other Highlights from MBA’s Weekly Mortgage Application Survey

  • Loan sizes rose last week, with the average rising from $387,000 to $395,500. The size of loans for home purchases jumped to $453,000 from $441,800. During the same week in 2023, the average loan size was only slightly lower at $381,100 while the average for purchase loans has increased from $428,000.
  • The FHA share of total applications dropped to 11.7 percent from 12.0 percent while the VA share edged up to 12.1 percent from 12.0 percent. USD applications accounted for a 0.5 percent market share once again.
  • The 6.91 percent average rate for conforming 30-year fixed-rate mortgages (FRM) represented a 2-basis point decline from the prior week. Points dipped to 0.59 from 0.60.
  • The average contract interest rate for 30-year FRM with jumbo loan balances decreased to 7.06 percent from 7.14 percent, with points increasing to 0.57 from 0.38. T
  • hirty-year FRM with FHA backing had a rate of 6.74 percent with 0.90 point. The prior week the rate averaged 6.75 percent with 0.97 point.
  • The 15-year FRM average decreased to 6.35 percent from 6.46 percent with a decline in points to 0.56 from 0.75.  
  • The average contract interest rate for 5/1 adjustable-rate mortgages (ARMs) rose 10 basis points to 6.37 percent and points increased to 0.68 from 0.64  
  • The ARM share of activity was unchanged at 7.0 percent of total applications.

Source: mortgagenewsdaily.com

Apache is functioning normally

Rising mortgage rates this week cast further doubt on meaningful rate cuts happening soon for homebuyers.

The average rate for a 30-year loan inched past 7% this week, settling at 7.07% on Wednesday, according to Mortgage News Daily.

A separate measurement tracking weekly average rates rose to 6.82% from 6.79%, Freddie Mac reported.

Homebuyers continued to pull back as affordability challenges worsened and consumer optimism diminished over how soon and how much interest rates could ease this year. Waiting for loan rates to decline is now the top reason buyers say they are not actively searching for a home.

“Elevated mortgage rates have been a persistent market challenge, holding back first-time homebuyers and repeat homebuyers alike, albeit for different reasons,” said Danielle Hale, chief economist at Freddie Mac. “In order for rates to decline meaningfully and sustainably, inflation needs to be convincingly on a path to the Fed’s 2% target.”

Read more: Mortgage rates remain around 7% — is this a good time to buy a house?

Homebuyers stay on the sidelines

Homebuyer affordability continued to decline, with the US median mortgage payment increasing 2% monthly in February and 6% annually to nearly $2,200, according to the Mortgage Bankers Association (MBA).

Rising mortgage payments across the US — driven by either higher interest rates or higher home prices, or both — have considerably cooled buyers’ demand.

The volume of home-purchase applications stayed unchanged this week and dropped 13% compared to the same week one year ago, MBA data showed.

“Challenging affordability conditions and low housing supply are keeping some prospective homebuyers on the sidelines this spring,” Edward Seiler, MBA’s associate vice president, said. “The eventual, expected decline in rates in the coming months will hopefully spur new activity in the housing market.”

Expectations of a rate decline have been waning, though. Investors are now betting the Fed will cut rates by less than a percentage point instead of the 1.5% forecast at the beginning of 2024.

Despite the market shift, Fed Chair Jerome Powell recently assured the public that inflation is easing and the central bank is still expected to cut rates at “some point” this year.

Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).

Click here for the latest personal finance news to help you with investing, paying off debt, buying a home, retirement, and more

Read the latest financial and business news from Yahoo Finance

Source: finance.yahoo.com

Apache is functioning normally

Although fourth quarter mortgage originations were flat year-over-year, nonbank lenders that could provide products through multiple means were able to grow their business during that tough period, a Morningstar DBRS recap found.

“In addition to affordability challenges, seasonality and competition also impacted volumes and pricing,” the report from Shaima Ahmadi, assistant vice president, North American financial institution ratings, said. “However, on an individual company basis, those with omnichannel organization models continued to grow originations in [the fourth quarter] as they were able to capture a higher share of the market versus those with less diverse channels and refi heavy models.”

The top mortgage lenders benefited by undertaking business restructuring and making strategic shifts in order to capture more purchase business, Ahmadi said.

A shift underway that might not be going well is taking place at Finance of America, which had been at one point a multi-channel forward lender. After several previous strategy shifts, the company elected to focus on reverse mortgages. As part of that strategy, it bought American Advisors Group, which helped to drive FOA to a 40% market share in that segment.

“Despite market share gains, when excluding forward organizations in 4Q22, FOA’s reverse mortgage origination volume was down a significant 56% YoY in 4Q23,” Ahmadi pointed out.

“Meanwhile, Rithm Capital Corp. has made a number of acquisitions of mortgage servicing and alternative asset management businesses over recent years as part of the company’s strategic shift to become a real estate asset manager. Companies also continue to diversify their basket of mortgage loan offerings with added complementary services.”

The Mortgage Bankers Association’s fourth quarter industry profitability survey found that independent mortgage bankers and bank mortgage subsidiaries, both public and privately held, lost an average of $2,109 on every loan produced.

Furthermore, servicing was a net financial loss for the group of $24 per loan, while operating income for this function, which excludes amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on bulk sales, was $108 per loan.

Mortgage servicing rights proved to be a double-edge sword in the fourth quarter. Companies reported fair-value losses on their MSR portfolios — a requirement of mark-to-market accounting that is tied to potential prepayments — but servicing fee income was up.

The publicly traded nonbank lenders tracked in the Morningstar DBRS report had a 6% increase year-over-year in their portfolios. But that ranged from a 14% gain at Mr. Cooper, which was active in the bulk purchase market, to declines of 5% at Rocket and 4% at United Wholesale Mortgage; UWM has been a strategic seller of servicing rights as part of its risk management strategy, executives noted on its fourth quarter earnings call.

FOA actually had a larger percentage increase at 38%, but that was primarily reverse servicing picked up in the AAG deal, and among the nine companies listed, it has by far the smallest portfolio.

Even though its portfolio is now smaller, Rocket bought MSRs originated with high rates for the potential refinancing opportunity.

“Given where mortgage rates currently are, borrowers have little incentive to refinance,” Ahmadi said. “However, some companies indicated that they expect a meaningful rebound in refinance activity when rates fall below 6%.” While the MBA thinks rates will sink under that mark, Fannie Mae’s latest forecast calls for them to just get to that level by the end of next year.

For the group losses narrowed as improved gain on sales margins were partially offset by lower origination volume.

Gross gain on sales margins, inclusive of fee income, net secondary marketing income and warehouse spread, was 334 basis points in the fourth quarter, up from 329 basis points three months prior, the MBA survey reported.

“We would expect margins to remain under pressure in 1Q given the negative impact seasonality typically has on both 4Q and 1Q,” Bose George, an analyst with Keefe, Bruyette & Woods said in an April 1 note on the survey. “Industry profitability is likely to be flat to down in 1Q as volumes should once again be low due to the seasonality associated with the quarter and the elevated average mortgage rate.”

Several public companies also reported major one-off expenses, including Pennymac Financial Services, which recorded $158.4 million in expenses from an arbitration ruling in favor of Black Knight (now part of Intercontinental Exchange) over mortgage servicing technology including allegations of breach of contract and misappropriation of trade secrets.

Meanwhile, Mr. Cooper’s November 2023 cybersecurity incident hit its results to the tune of $27 million.

Ahmadi also noted that the nonbanks had higher leverage ratios year-over-year for the fourth quarter, as debt levels increased slightly but was primarily caused by financial losses eroding company equity.

“During [the fourth quarter], nonbank mortgage companies were active in the high yield market, raising unsecured funding, which was partially used to pay down upcoming maturities in 2025, which we view positively for their credit profiles,” Ahmadi said. “Indeed, unsecured debt issuances increase nonbank mortgage companies’ financial flexibility by decreasing balance sheet encumbrance.”

Both Rocket and Pennymac Mortgage Trust were able to reduce their leverage ratios. But FOA’s debt-to-equity ratio increased to 97.8x compared with 49.7x one year prior, while Ocwen’s was at 27.2x, versus 22.9x over the same period.

Source: nationalmortgagenews.com

Apache is functioning normally

Recruiting, Loan Trading, TPO, Compliance Tools; FHA and USDA News; Fed Cuts Wanted, but Not Needed?

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Recruiting, Loan Trading, TPO, Compliance Tools; FHA and USDA News; Fed Cuts Wanted, but Not Needed?

By:
Rob Chrisman

Tue, Apr 2 2024, 11:53 AM

“I think it’s disgraceful that after 55 years, people don’t know who Neil Armstrong was… or even the type of trumpet he played.” Time flies. Did you know that Freddie Mac and Fannie Mae have their driver’s permits? I am kidding about the permit, but it has been 16 years since they were placed under conservatorship, under the FHFA. Of course, no regulator ever wants their job to go away, so it is doubtful that the FHFA will be an active proponent of “releasing them into the wild.” Besides, their focus has, in recent years, shifted to first-time home buyers and previously underserved markets. While we’re on the passing of the years, at a recent TMC session on leadership, First Community’s Keith Canter reminded everyone that it was four years ago that managers and companies sent everyone home due to the pandemic. Companies couldn’t hire fast enough. Two years later rates moved higher, and managers were dealing with layoffs. Since, management teams have been focused on what is working, what is not working, and what employees need from their supervisors. It is a good exercise to partake in several times a year. (Found here, this week’s podcasts are sponsored by Loan Vision. With Loan Vision, the mortgage banking industry’s premier mortgage accounting solution, you can take your accounting department from “cost center” to “revenue generator,” operating more efficiently and profitably. Hear an interview with Loan Vision’s Paul Loftus on the competitive landscape of the mortgage market and strategic direction of the mortgage accounting space.)

Lender and Broker Services, Products, and Software

Stay “in the know” with the MGIC’s Mortgage Connects knowledge hub, your single-source destination for 100s of resources and insights to build your referral network and educate homebuyers.

Your Legacy LOS May Be Costing You More Than You Realize! Let’s be honest: legacy mortgage solutions no longer cut it if you want to grow, and nurture, lasting relationships and key revenue opportunities. Today’s borrowers demand a fast, frictionless digital journey without sacrificing the personalized touch from their loan officer. 100 percent browser-based and cloud-native mortgage lending technology, such as MeridianLink® Mortgage LOS, is crucial to helping you attract and retain more business by prioritizing the borrower experience while reducing costs and enhancing ROI. Looking to make the switch but unsure where to start? Here are 5 questions to ask when beginning the search for a new mortgage LOS.

Free eBook: How to Lower Costs, Boost Profitability, and Surge Ahead of the Competition in 2024. Looking to improve your strategy as Q2 begins? By upleveling your plan, you can reduce fixed costs, improve your bottom line, and set the groundwork to win market share as volume begins to improve. Want to learn how? We spoke to senior members of the Maxwell team, each with decades of industry experience, and the result is our new eBook: an actionable guide that will teach you the likely path for rates and volume in 2024, strategies to bulk up your pipeline, why reevaluating your cost structure is vital to achieving profitability, and more. Get your free copy today to inform your 2024 planning: Click here to download Make More Out of ‘24: How to Win Market Share as Your Competition Lags.

“What do you need to know about fair lending compliance in 2024? That’s the question we answered in our recent webinar. With the HMDA submission window open, what better time to look at fair lending? In this new article, our team reviews the top 7 takeaways critical for your institution, including: Adverse Action Notices (AANs) are a cornerstone of your Fair Lending Compliance Program; Denying loans based on immigration status may violate ECOA protections; Don’t try to outsmart your borrowers; Marketing is critical to your fair lending lifecycle; Monitor pricing exceptions; Make sure you’re collecting HMDA/1071 data and reporting it correctly; and You must manage third-party and indirect fair lending compliance. Read the full article for more.”

“First Colony Mortgage Corporation (FCM TPO): Introducing our revolutionary mobile app and most robust TPO portal! Say goodbye to time-consuming tasks and hello to efficiency. With our app, manage your pipeline seamlessly, access pricing and loan information, and get the resources you need, all while on-the-go or in meetings with clients. We understand your needs and are committed to delivering the solutions you deserve. Here is what our brokers are saying, ‘I just registered a new purchase with you, and it was probably the easiest portal to lock a loan I’ve ever experienced,’ Danielle O.” FCM TPO is up and running with some of the most experienced Account Executives in the industry including Robb Fordham, Mike Meyers, Matt McGuinn, Marcus Korth, Velvet Cordes, Rex Hagood, Kurt McLaughlin, Tom Carroll, Angela Lewis, Brennan Baim, Roger Quandt, Cassie Quinn Mead, Ralph Mesa, Mike Antrim, and Chris Agin. If you are not approved with FCM TPO, please reach out.”

“Headed to Memphis April 16-18 for the Great River MBA Conference (GRC24)? The Optimal Blue team would love to connect and discuss your Q2 goals! This year, our capital markets solution specialist, Brad Eskridge, will join in the 7-in-7 presentation on April 17. In this seven-minute presentation, he will showcase how Trade Assistant, available in Optimal Blue’s CompassEdge hedging and loan trading platform, can add next-level precision, enhanced accuracy, and increased speed to your hedging process, making it all but foolproof! After the session, visit Brad and the Optimal Blue team at Booth 20 in the Peabody Grand Ballroom to learn how our capital markets solutions can help you operate more profitably and efficiently. Better yet, schedule a personalized meeting with our experts to discuss your business goals and current challenges!”

Loan officers are the lifeblood of any successful lender. Lenders who can recruit and retain talented producers will be able to ensure an active pipeline and exceed their revenue goals. Competition and compliance challenges in the current market demand that you set up a scalable recruiting function to target the right talent that aligns with your business. Join Total Expert on Wednesday, April 17 as we sit down with InGenius CEO Jeff Walton to discuss strategies for identifying, engaging, and converting loan officers who are the right fit for your business. Save your digital seat.

FHA and USDA Updates

FHA published in the Federal Register (FR), Mortgagee Review Board: Administrative Actions [Docket No. FR-6455-N-01]. The FR Notice provides a description of, and the cause for, the Mortgagee Review Board’s administrative actions against HUD-approved mortgagees in 54 fact-based cases; five cases where mortgagees failed to timely obtain a required Unique Entity Identifier; and 15 mortgagees that had annual recertification violations and were withdrawn from the program for one year. Read the entire FR Notice by viewing the Mortgagee Review Board: Administrative Actions.

Pennymac is aligning with the recent USDA changes to technical Handbook 1-3555 Chapter 8. Effective 4/1/2024. For details, view Pennymac Announcement 24-29.

Pennymac will update Government LLPAs effective for all Best-Efforts Commitments taken on or after Friday, March 29th. Details shown in Pennymac Announcement 24-32.

DPA Direct by Unified Reliance Wholesale (URW) is a 100 percent financing option pairs a primary FHA loan with down payment assistance in the form of a second lien. This means more homebuyers can take advantage of the benefits of an FHA loan without having to come up with a 3.5 percent down payment. And better yet, this program is available in most states*, unlike some location-specific assistance programs. *Not available in MA, NJ, or NY.

Capital Markets

Market reaction to the inflation numbers from Friday, which showed core prices in February cooled relative to the spike observed in January while personal spending rose more than anticipated on the heels of the largest gain in wages in the past year, was a little sour to open this trading week. Bonds and MBS prices were down, and thus rates moved up toward their highest levels of 2024.

Both that report and yesterday’s data releases from the manufacturing sector supported ongoing hawkishness among Federal Open Market Committee officials. The S&P Global U.S. Manufacturing PMI dipped slightly in the final reading for March while the ISM Manufacturing Index unexpectedly returned into expansion. U.S. manufacturing expanded in March for the first time since 2022 on a sharp rebound in production and stronger demand, while input costs climbed.

Keep in mind that March nonfarm payroll employment data will be the headline this week. Growth likely decelerated in March, holding the unemployment rate unchanged and indicating the modest margin of slack in the economy is slowing wage growth to a pace more typical of a balanced job market. We learned yesterday that total construction spending, which was expected to have risen, declined 0.3 percent during February, the second consecutive monthly drop. Construction spending was expected to be buoyed by single-family construction and non-residential building subsidized by government incentives for renewables and semiconductor reshoring.

Fed Chair Powell reminded market participants at the end of last week that the Fed is in no hurry to begin cutting rates. He mentioned that there might be some seasonal noise in Q1 data as it encompasses more than just inflation and perhaps Q4 was understated which makes January and February overstated. Bond traders are now pricing in fewer Fed rate cuts this year, and the solid U.S. factory data reinforced speculation the central bank will be in no rush.

The odds of a first cut in June are moving down toward 50 percent, while three 25 basis point cuts for 2024 (at the June, September, and December FOMC meetings) are currently pricing in as the highest probability. Fed Governor Waller echoed Chair Powell’s comments yesterday, saying there is no rush to lower interest rates and emphasizing that recent economic data warrants delaying or reducing the number of cuts this year.

Today’s economic calendar gets under way shortly with Redbook same store sales for the week ending March 30, and will be followed by February factory orders, JOLTS job openings, several short-duration Treasury auctions, and a litany of Fed speakers (all current FOMC voters). After the bearish mood yesterday sent the 10-year yield climbing 12 basis points to 4.33 percent, we begin Tuesday with Agency MBS prices worse .125 and the 10-year yielding 4.35; the 2-year is up to 4.72.

Jobs and Transitions

Are you an experienced mortgage banking professional with a passion for building and leading high-performing teams? An ongoing mortgage banker is seeking a talented individual to join its Northern California team as the Vice President of Mortgage Banking, ideally in, or within driving distance of, the Greater Sacramento area. In this role, you will have the opportunity to shape the future of the company’s mortgage banking division and drive growth through strategic recruitment and operational excellence. The company is looking for a leader with the ability to drive production, to work closely with operation management to build a streamlined process and provide overall management. If you are a dynamic leader with a strategic mindset and a passion for excellence, you’re invited to apply for the VP of Mortgage Banking position. Take the next step in your career and join in shaping the future of mortgage banking. Apply now to be considered for this exciting opportunity: send me your confidential resume for forwarding.

“It’s 1999: Californication and Slim Shady dominate the charts, the iconic films Fight Club and The Matrix are released, Serena Williams wins her first Grand Slam to kick off an outrageous career and with inspiring greatness being born all around Seth Fass founds East Coast Capital. Celebrating its 25th anniversary, East Coast Capital has scored incredible victories for clients to achieve their homeownership goals. Once a small broker, NY-Based East Coast Capital is now a licensed bank across the nation, approved with Fannie, Freddie, and FHA and also specializes in underwriting Non-QM loans. Committed to providing homeowners access to capital and supporting loan officers with a diverse range of products and common-sense approach to underwriting, the movies and songs may have fallen off the playlist and Serena has retired from the courts, but born among the best, East Coast Capital still remains! Ready to Join? Email us.”

Homecomings Mortgage & Equity, a division of AnnieMac Home Mortgage, is thrilled to announce Rocky Bergante’s appointment as the new Regional Manager based in Chicago. Rocky brings an impressive track record of over 25 years in the mortgage industry. His strategic planning, sales, and growth expertise have led to remarkable achievements. His recent roles include SVP of National Business Development at Amres Corporation and VP of Sales for Interfirst Mortgage. “Rocky’s past success in growing teams is evidence of what Rocky will do at Homecomings,” said Fobby Naghmi, SVP at Homecomings Mortgage & Equity. “We are eagerly anticipating the innovative strategies and exceptional leadership he will bring to our company. “Rocky’s appointment marks a significant step in Homecomings Mortgage & Equity’s journey toward excellence and innovation in the mortgage sector. Mortgage professionals interested in exploring opportunities with Homecomings Mortgage & Equity are encouraged to Fobby.

“AFR Wholesale® is on an exhilarating growth trajectory, and on the lookout for forward thinking Sales and Operations Leaders. Are you a modern mortgage leader with a knack for crafting strategies that turn customers into raving fans and elevate the experience beyond expectations? Then you’re exactly who we need to steer our expanding team towards unparalleled success. At AFR, we value leaders who are leveraging technology to battle the complexities of the industry but are also passionate about making homeownership dreams a reality. As an equal opportunity employer, we’re dedicated to fostering an inclusive and supportive work environment. Joining AFR means being part of a dynamic team that’s dedicated to helping families achieve their dream of homeownership. Don’t miss this exciting opportunity to be part of AFR’s growth journey and make a meaningful difference in the lives of others. Want to have a confidential discussion about your career? Email us.”

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Source: mortgagenewsdaily.com

Apache is functioning normally

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Mortgage rates are down significantly this week. Average 30-year mortgage rates have dropped nearly 30 basis points from a week ago, according to Zillow data. And they could drop further this year.

As inflation slows and the economy comes into better balance, mortgage rates are expected to go down. Inflation has been a bit stickier than expected over the last few months, but Federal Reserve officials have indicated that they still believe it will continue to slow and enable them to start lowering the federal funds rate this year. This should take a lot of upward pressure off of mortgage rates and allow them to decrease.

Right now, investors are pricing in a Fed cut in June, according to the CME FedWatch Tool. So we could see mortgage rates start trending down more substantially in just a few months.

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Current Refinance Rates

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Use our free mortgage calculator to see how today’s mortgage rates would impact your monthly payments. By plugging in different rates and term lengths, you’ll also understand how much you’ll pay over the entire length of your mortgage.

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$1,161
Your estimated monthly payment

Total paid$418,177
Principal paid$275,520
Interest paid$42,657
  • Paying a 25% higher down payment would save you $8,916.08 on interest charges
  • Lowering the interest rate by 1% would save you $51,562.03
  • Paying an additional $500 each month would reduce the loan length by 146 months

Click “More details” for tips on how to save money on your mortgage in the long run.

Mortgage Rates for Buying a Home

30-Year Fixed Mortgage Rates Fall (-0.27%)

The current average 30-year fixed mortgage rate is 6.32%, down 27 points from where it was this time last week, according to Zillow data. This rate is also down compared to a month ago, when it was 6.59%. 

At 6.32%, you’ll pay $620 monthly toward principal and interest for every $100,000 you borrow.

The 30-year fixed-rate mortgage is the most common type of home loan. With this type of mortgage, you’ll pay back what you borrowed over 30 years, and your interest rate won’t change for the life of the loan.

20-Year Fixed Mortgage Rates Go Down (-0.24%)

The average 20-year fixed mortgage rate is 24 points down from where it was last week, and is sitting at 5.99%. This time last month, the rate was 6.30%.

With a 5.99% rate on a 20-year term, your monthly payment will be $716 toward principal and interest for every $100,000 borrowed.

A 20-year term isn’t as common as a 30-year or 15-year term, but plenty of mortgage lenders still offer this option.

15-Year Fixed Mortgage Rates Decrease  (-0.33%)

The average 15-year mortgage rate is 5.64%, down from last week. It’s also down compared to this time last month, when it was 5.98%.

With a 5.64% rate on a 15-year term, you’ll pay $825 each month toward principal and interest for every $100,000 borrowed.

If you want the predictability that comes with a fixed rate but are looking to spend less on interest over the life of your loan, a 15-year fixed-rate mortgage might be a good fit for you. Because these terms are shorter and have lower rates than 30-year fixed-rate mortgages, you could potentially save tens of thousands of dollars in interest. However, you’ll have a higher monthly payment than you would with a longer term.

7/1 ARM Rates Plunge (-0.60%)

The 7/1 adjustable mortgage rate is down 60 basis points from a week ago, currently at 6.18%. It’s also down from a month ago, when it was at 6.47%. 

At 6.18%, your monthly payment would be $611 toward principal and interest for every $100,000 borrowed — but only for the first seven years. After that, your payment would increase or decrease annually depending on the new rate.

5/1 ARM Rates Drop Nearly Half a Percentage Point (-0.49%)

The average 5/1 ARM rate is 6.51%, a 49-point decrease from last week. It’s down from where it was a month ago, when it was 6.74%.

Here’s how a 6.51% rate would affect you for the first five years: You’d pay $633 per month toward principal and interest for every $100,000 you borrow.

30-year FHA Rates Nearly Flat (+0.03%)

The average 30-year FHA interest rate is 5.65% today, which is just 3 basis points up from last week. This rate was 6.11% a month ago.

At 5.65%, you would pay $577 monthly toward principal and interest for every $100,000 borrowed.

FHA mortgages are good choices if you don’t qualify for a conforming mortgage. You’ll need a 3.5% down payment and 580 credit score to qualify.

30-year VA Rates Lower (-0.38%)

The current VA mortgage rate is 5.54%, 38 basis points lower than this time last week. This rate was 5.92% a month ago.

With a 5.54% rate, your monthly payment would be $570 toward principal and interest for every $100,000 you borrow.

Mortgage Refinance Rates

30-Year Fixed Refinance Rates Increase (+0.69%)

The average 30-year refinance rate is 7.69%, 69 basis points higher than last week. It’s nearly flat compared to a month ago, when it was 7.65%.

Here’s how a 7.69% rate would affect your monthly payments: You’d pay $712 toward principal and interest for every $100,000 borrowed.

Refinancing into a 30-year term can land you lower monthly payments, but you’ll ultimately pay more by refinancing into a longer term.

20-Year Fixed Refinance Rates Up Over a Full Percentage Point (+1.20%)

The current 20-year fixed refinance rate is 7.66%, which is 120 basis points up compared to a week ago. This rate was 6.42% this time last month.

A 7.66% rate on a 20-year term will result in a $815 monthly payment toward principal and interest for every $100,000 you borrow.

15-Year Fixed Refinance Rates Go Up (+0.58%)

The average 15-year fixed refinance rate is 6.92%, which is more than half a percentage point higher compared to last week. It’s down just a little bit compared to this time a month ago, when it was at 6.99%.

A 6.92% rate on a 15-year term means you’ll pay $894 each month toward principal and interest for every $100,000 borrowed.

Refinancing into a 15-year term can save you money in the long run, because you’ll get a lower rate and pay off your mortgage faster than you would with a 30-year term. But it could result in higher monthly payments.

7/1 ARM Refinance Rates Tick Down (-0.32%)

The average 7/1 ARM refinance rate is 6.83%, down 32 points from where it was last week. It’s up a bit from a month ago, when it was 6.69%.

Refinancing into a 7/1 ARM with a 6.83% rate means your monthly payment toward principal and interest will be $654 for every $100,000 you borrow. This will be the payment for the first seven years, then your rate will change annually unless you refinance again.

5/1 ARM Refinance Rates Fall Dramatically (-1.11%)

The 5/1 ARM refinance rate is 6.44%, which is significantly lower than it was this time last week. It’s up a bit compared to this time last month, when it was 6.34%.

A 6.44% rate will result in a monthly payment of $628 toward principal and interest for every $100,000 borrowed. You’ll pay this amount for the first five years of your new mortgage.

30-Year FHA Refinance Rates Drop a Bit (-0.10%)

The 30-year FHA refinance rate is 5.52%, which is 10 points lower than last week. This rate was 5.61% this time last month.

A 5.52% refinance rate would lead to a $569 monthly payment toward the principal and interest per $100,000 borrowed.

30-Year VA Refinance Rates Decrease (-0.19%)

The average 30-year VA refinance rate is 5.56%, which is down compared to where it was was last week. This rate was 5.78% a month ago.

At 5.56%, your new monthly payment would be $572 toward principal and interest for every $100,000 you borrow.

Are Mortgage Rates Going Down?

Mortgage rates started ticking up from historic lows in the second half of 2021 and increased over three percentage points in 2022. Mortgage rates also rose dramatically in 2023, though they started trending back down toward the end of the year. Though rates have been somewhat elevated recently, they should go down by the end of 2024. 

For homeowners looking to leverage their home’s value to cover a big purchase — such as a home renovation — a home equity line of credit (HELOC) may be a good option while we wait for mortgage rates to ease further. Check out some of our best HELOC lenders to start your search for the right loan for you.

A HELOC is a line of credit that lets you borrow against the equity in your home. It works similarly to a credit card in that you borrow what you need rather than getting the full amount you’re borrowing in a lump sum. It also lets you tap into the money you have in your home without replacing your entire mortgage, like you’d do with a cash-out refinance.

Current HELOC rates are relatively low compared to other loan options, including credit cards and personal loans. 

Molly Grace

Mortgage Reporter

Source: businessinsider.com

Apache is functioning normally

Technical Breakout in Treasuries. Does it Matter?

By:
Matthew Graham

Tue, Apr 2 2024, 4:00 PM

Technical Breakout in Treasuries. Does it Matter?

Bonds began the day in much weaker territory as Treasuries followed European yields higher after a series of stronger PMIs overnight. Domestic traders added to the weakness early with 10yr yields hitting their highest levels since November.  Bonds found their footing after an as-expected JOLTS report and MBS even made it all the way back to “unchanged” just before 3pm.  Nevertheless, 10yr yields had broken their recent 4.32% ceiling.  As always technical levels don’t predict the future.  This breakout reinforces the headwinds of the past few weeks and acknowledges the risks associated with the incoming data.  If that data is friendly, this will not look like an important technical breakout in hindsight.  But the opposite is also true: stronger data would make this breakout look like ominous foreshadowing.

    • Job Openings
      • 8.756m vs 8.75m f’cast, 8.748m prev

08:52 AM

10yr yields up 7.8bps at 4.394. MBS are down just over a quarter of a point.

11:12 AM

Pushing back after uneventful JOLTS.  MBS down only an eighth.  10yr up 4.5bps at 4.361.

01:51 PM

Sideways to slightly stronger.  MBS down only 2 ticks (.06) and 10yr up 4.3bps at 4.359

02:30 PM

MBS turn green, now up 1 tick (.03).  10yr still up 4.4bs at 4.36, but 5yr Treasury now unchanged as well.

 Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.

Source: mortgagenewsdaily.com