ALLIED EQUITY A Diversified Mortgage Company
400 North Mountain Ave., Suite 223, Upland, CA 91786
Phone  909-932-9226 Fax  909-803-9840

Mortgage Related News

Fueled by Low Rates, Prepayment Rate Continues to Rise

Posted To: MND NewsWire

With interest rates remaining at 2019 lows and spring market home sales kicking in, the rate of prepayments continues to rise. Black Knight, in its "first look" at April mortgage performance data, says the rate is up 17.54 percent from March and 17.65 percent year over year. Over the last three months the prepayment rate has increased by an aggregate of 67 percent. The rate in April was 0.99 percent. The delinquency rate fell by 5.05 percent compared to March and is down 5.41 percent from April 2018. At 3.47 percent of all mortgages in the country, the rate is the lowest in Black Knight's records dated back to 2000. Loans that were at least 30 days past due but not in foreclosure fell by 91,000 to 1.812 million in April. This was 73,000 fewer delinquencies than a year earlier. Serious delinquencies...(read more)

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Budgeting, Comp Products; Sales, Government Investigation Webinars

Posted To: Pipeline Press

What’s the banter, and in the unverified rumor mill, at the MBA’s Secondary Conference? Fannie, Freddie, and FHA are all concerned about being adversely selected against by lenders, and F&F are rumored to be ending pilot programs under FHFA direction. Regarding the QM Patch (expiring 1/10/21), industry insiders are working toward fixing the Ability to Repay Rule, in which case we wouldn’t need the Patch. Every FHA & VA lender should read Ginnie’s report from Friday as that organization is evaluating non-bank issuers. Lots of rumors about Freedom Mortgage purchasing RoundPoint Mortgage Servicing. Many lenders had good Aprils, profit-wise, and wholesale “pricing wars” are subsiding somewhat, but innovation in that sector continuing to push retail and...(read more)

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MBS Day Ahead: Without Help, Bonds Face Uphill Battle

Posted To: MBS Commentary

In the day just past, bonds weakened moderately amid the lightest volume in more than 3 weeks and a relative absence of market moving data/events. The losses are somewhat logical in the sense that momentum measurements have increasingly suggested this month's rally momentum was looking tired, not to mention the fact that friendly headlines and events have died down rapidly (i.e. no more daily doses of US/China trade war surprises). Even if we wanted to say that Huawei news or speculation about the trade war's effect on companies like Apple were still market movers this week, the impacts there have primarily been an issue for the stock market. Bonds generally shrugged off a rather steep drop in stocks yesterday and then bounced to the weakest levels of the day simply because stocks stopped...(read more)

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MBS RECAP: Bonds Skittish After Stocks Find Bottom

Posted To: MBS Commentary

Both stocks and bonds have been edging back into less panicked territory after trade war drama fizzled out last week. In other words, stock prices and bond yields were moving higher together. To be fair, bonds got one last rally push from Italy/EU drama mid-week (stocks didn't care as much about that one). Either way, by the end of last week the worst of the "risk-off" momentum appeared to be over and momentum looked to be shifting back in the other direction. Overnight weakness in equities markets threatened to push bond yields back down and create a green day for rates as opposed to modest weakness implied by the recent trend. But stocks were only ever looking panicked in the overnight and early morning hours. As soon as the 9:30am NYSE session got underway, stocks found their...(read more)

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Mortgage Rates Mostly Hold Near Lows, But Things Could Change Tomorrow

Posted To: Mortgage Rate Watch

Mortgage rates moved microscopically higher today, depending on the lender. In terms of underlying movement in the bond market, however, rates should have risen a bit more than they did. This has to do with the timing of the bond market weakness and the amount of movement lenders typically want to see before changing their mortgage rate offerings for the day. Simply put, weaker bonds suggest higher rates, but bonds didn't weaken fast enough for most lenders to see their "re-price" threshold. All of the above means that most lenders continued to offer rates that were very close to the lowest levels in more than a year. Only a handful of days have been any better, and all of them have occurred in the past 2 months. Much of the credit for the recent drop in rates goes to the well-publicized trade...(read more)

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New Data Prompts Freddie Mac to Upgrade Their Forecast

Posted To: MND NewsWire

Freddie Mac's May Forecast continues to look for a downward trending interest on the 30-year fixed-rate mortgage. The company's economists are project an average rate of 4.3 percent this year with a small increase to 4.5 percent in 2020. Coupled with a strong labor market, low unemployment, and "modest" wage growth, this should mean a steadily growing housing market this year. The forecast is for total housing sales, both new and existing, to slightly best the 2018 number of 5.96 million units, rising to 5.98 million. Existing home sales will account for 5.35 million of the total and new home sales for 630,000 units. Sales in 2020 are expected to be even better, at 6.14 million overall. Housing starts will be flat this year , with single-family starts gaining 0.01 million units to 0.88 million...(read more)

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MBS Day Ahead: Holiday-Shortened Trading Week Promises Little Inspiration

Posted To: MBS Commentary

In the week just past, bonds managed to extend the already unexpected gains that began on May 6th following a sharp escalation in US/China trade war rhetoric. Trade-related news continued to be a market mover throughout that two week period, and markets remain susceptible to "aftershock" headlines. Last Wednesday saw a flare-up in Italy/EU tensions revolving around the country's decision to violate EU budget rules. In general, risks to EU monetary stability are good for the bond market. There was limited economic data throughout the week, but logical reactions in general. That said, the size of the reactions was muted by the market's focus on geopolitical issues. In the week ahead, data will once again be limited with new and existing homes sales reports being the only notable...(read more)

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Training, Reno, Appraisal Products; Compliance Warning; FHFA, Fannie, Freddie News

Posted To: Pipeline Press

Tony H. sent, “A conference is a gathering of people who singly can do nothing, but together can decide that nothing can be done.” Not at this MBA event, right!? Here in New York there’s a lot to talk about. Ellie Mae laying off 10% of its workforce, for example. MERS reporting 19,000 eNotes added to the MERS eRegistry during the first quarter of 2019, more than in all of 2018. At the MBA’s Secondary Conference one topic being batted about is the LTV ratio. Yes, the “lender to vendor” ratio has been sinking over the years as the number of vendors has increased. One-month bank statement programs? Yup, there’re out there. Chase Advantage reminding capital markets folks of 2006 programs & pricing through “access to the private MBS market?”...(read more)

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MBS RECAP: Bonds Start Strong but Fade to 'unchanged' By the Close

Posted To: MBS Commentary

Bonds began the overnight session in unchanged territory but began to improve on various news reports that fueled a global flight-to-safety. These included the latest edition of US/China brinksmanship as well as a surprise update on the Brexit talks "collapsing." The Brexit news reaction delivered Treasuries to the domestic starting line in much stronger territory (10yr yields down into the 2.36's), but that was as far as the day's gains would go. After an hour and a half of indecision , yields began to rise right at the NYSE open. They received another push at 10am from stronger-than-expected Consumer Sentiment data (which included higher inflation expectations to boot!). Just as yields weren't willing to press any lower than yesterday's lowest levels, neither were...(read more)

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Mortgage Rates End Week Near Long-Term Lows

Posted To: Mortgage Rate Watch

Wednesday was the best day this week for Mortgage rates with the average lender at the lowest levels in more than a month and very close to the lowest levels in more than a year. Things changed on Thursday with rates moving up slightly. That said, Thursday would have been the best day in more than a month had it not been for Wednesday! Friday brought effectively no change to Thursday's levels, thus keeping the average lender very close to long-term lows . In fact, the average loan quote won't have changed in terms of the quoted interest rate during the past 3 days--only in terms of the upfront costs. In other words, APR would be slightly higher while the payment rate itself would be unchanged (APR factors certain upfront costs into a total cost of financing). In the bigger picture, rates have...(read more)

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Broker, Underwriting, MSR Products; Bank, Lender, and Credit Union News

Posted To: Pipeline Press

A capital markets friend relayed this note recently received from an LO. “When do you think stated pick-a-pay products will come back? I have some borrowers with LTVs less than 70% who could really use that. Can you find us a program to offer?” Huh? Pick-a… Pik-a-chu? As over a thousand capital markets folks head to New York this weekend to tax their livers and hear, yet again, another set of titillating GSE reform updates at the MBA Secondary conference that are heard at every conference, there is investor chatter as always, like PHH re-entering the mandatory business. At least one associated group is optimistic. U.S. homebuilders are becoming significantly more confident after a sharp downturn last year. The monthly confidence index of the National Association of Home Builders...(read more)

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MBS Day Ahead: Limited Data; Trade Headlines Still Asking For Attention

Posted To: MBS Commentary

In the day just past, bonds enjoyed a break in trade-related headlines, an absence of new Italy/EU drama, and a reasonably informative set of economic reports in the morning. Less enjoyable was the fact that the econ data made a case for bond market weakness. Indeed, the main thrust of upward momentum in Treasury yields followed the 8:30am economic reports. Nonetheless, bonds were able to find a supportive ceiling mid-morning, even as stocks continued to rally. In the day ahead, there's only one mid-tier econ report to digest in the form of Consumer Sentiment. This CAN move markets, but frequently doesn't. Leading Economic Indicators shares the same time slot, but is better characterized as almost never moving markets. Beyond the data, overnight trading suggests markets remain susceptible...(read more)

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Low Rates Stabilize Refinancing Share of Originations

Posted To: MND NewsWire

Refinancing held on to a 35 percent share of mortgage originations in April according to the Origination Insight Report from Ellie Mae as the 30-year note rate dropped for the fourth consecutive month. The rate was at its highest so far at 5.01 percent in January. The April average was 4.61 percent. The share of refinancing was little changed from March for any of the loan types and ranged from 38 percent for conventional loans to 23 percent for those backed by FHA. The time to close loans continues to shrink, dropping two days to 40. Time to close a refinance was 33 days, down from 34 in March and 43 compared to 45 for purchase loans. "We are seeing closing times drop across the board as our lenders leverage technology for a more efficient and streamlined loan origination process," said Jonathan...(read more)

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MBS RECAP: Logical Losses Leave Bonds in Still-Decent Shape

Posted To: MBS Commentary

Bonds finally moved in a less friendly direction today after 3 solid days of gains. The losses were logical, though, considering an absence of geopolitical headlines and an abundance of stronger economic data in the early domestic session. In fact, it was that data more than anything that pushed yields higher and MBS Prices lower in the 830am-930am time frame. Refreshingly, a surge in the stock market didn't do any noticeable damage to bonds. That's not something we would have expected based on the recent trend of extreme correlation. 10yr yields managed to hold under the 2.425% technical ceiling with room to spare. Fannie 3.5 MBS only lost an eighth of a point and never experienced any volatility after the initial hour of losses. Tomorrow's data is limited, as is the entirety of...(read more)

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Mortgage Rates Ebb Higher, But Only Slightly

Posted To: Mortgage Rate Watch

Mortgage rates hit the lowest levels in more than a month yesterday and came very close to the lowest levels in more than a year. Things changed today , but only slightly. Without a fresh supply of drama or weaker economic data, the bond market deteriorated. Bonds typically benefit when investors are seeking safe havens in response to economic risks. This pushes bond prices higher and yields (aka "rates") lower. Whereas there were concerns about Italian budget news and a weaker reading on Retail Sales yesterday, today brought stronger economic data across the board. Bonds reacted by weakening (i.e. moving higher in yield/rate) and that was basically that. If there's a saving grace for the bond/rate market is that the weakness found a limit fairly quickly and rates were only modestly higher...(read more)

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MBA Betting on New Home Sales Surge

Posted To: MND NewsWire

Applications for new home purchases jumped 15.6 percent in April compared to a year ago and were 3.0 percent higher than in March. The Mortgage Bankers Association said these non-seasonally adjusted numbers indicate there will be a strong increase in new home sales for the month. "There was a healthy increase in new home purchase activity in April, boosted by the strong economic and employment conditions seen in the first quarter of 2019," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "Applications for new home purchases increased, as did our estimate for new home sales. After two months of declines, MBA estimates that April new home sales were 10 percent higher than last April and reached the highest annual pace since this survey's inception in 2013."...(read more)

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Permitting and Housing Starts are Finally Gaining Ground

Posted To: MND NewsWire

There was a small gain in residential construction permitting in April while housing starts rose strongly , both reversing their unexpected declines in March. Neither however has yet caught up with their year earlier numbers. The U.S. Census Bureau and the Department of Housing and Urban Development said permits increased by 0.6 percent to a seasonally adjusted annual rate of 1,296,000 in April, besting the upwardly revised estimate of 1,288,000 in March. The March rate was originally estimated at 1,269,000. The April number was still 5.0 percent lower than the April 2018 rate of 1,364,000. Analysts polled by Econoday had expected permitting to be in the range of 1,269,000 to 1,302,000. The consensus was slightly below the actual number at 1,290,000. Permits for single family construction continue...(read more)

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HELOC, Closing Cost, Loan Trading Products; Tech Survey

Posted To: Pipeline Press

Lender Products and Services My AMC, LLC is pleased to announce the hiring of Carolyn Covington as Sales Account Executive working in the Dallas, TX office to collaborate with My AMC’s nationwide customer base. “I accepted the position because I love what they do in terms of turn times, pricing and most importantly customer service”, said Covington. Covington comes to My AMC with over 20 years’ experience in the sales field. Covington’s extensive experience combined with her relationships and knowledge in the lending industry will allow her to transition seamlessly into her new role. Since 2004, My AMC, LLC’s purpose has been to deliver quality appraisals nationwide that are compliant with investor, state, and federal Appraiser Independence Requirements and...(read more)

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MBS Day Ahead: Bond Sellers Waiting For The All Clear

Posted To: MBS Commentary

In the day just past, bonds rallied profusely on news that Italy would defy EU budget rules in laying out expenditures to stimulate its economy, thus introducing systemic risk to the Euro currency which, in turn, benefits core bond markets like German Bunds and US Treasuries. 10yr yields moved from 2.41 to 2.37% before the start of business and then rallied more on weak Retail Sales and manufacturing data. In the day ahead, bonds will be looking around, wondering if the coast is clear for some much-needed selling pressure. why much needed? Simply put, just as Italy defied the EU, bond market momentum has defied expectations and conventional wisdom by continuing to move lower in yield, despite several logical opportunities for a bounce or correction. Yesterday might have brought such a bounce...(read more)

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MBS RECAP: From China to Europe, Bonds Benefiting From Overseas Drama

Posted To: MBS Commentary

Interestingly enough, the most interesting thing that happened to the bond market today happened in the overnight session. It accounted for most of the movement, and it brought bonds exactly to the levels seen at the end of the day. The event in question was news that Italy would defy EU budget rules in an attempt to stimulate its economy. This is the sort of thing that gets investors thinking about systemic risk and degradation of the EU monetary system, even if only slightly. In turn, core EU bonds tend to benefit noticeably, and those gains tend to spill over to US bond markets (which is exactly what happened overnight). Weaker Retail Sales and Industrial Production added to the bond market gains, but it was ultimately Europe that was in control. The EU rally bounced in the morning hours...(read more)

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Rates Close In On Lowest Levels in Over a Year

Posted To: Mortgage Rate Watch

Mortgage rates have had a few first world problems to complain about recently. Well, there's really only been one: a relative inability to keep pace with the broader decline in rates as seen in the Treasury market. If Treasuries are the "master," mortgage rates are the proverbial dog on a leash. The dog can pull ahead, heel faithfully, or drag recalcitrantly behind. The latter has been mortgage rates' M.O. for the past few weeks owing to some abstruse loan performance data that made investors rethink the value they were placing on mortgage investments. But now, the broader rate market has done well enough over the past two weeks that even the mortgage market is forced to participate. To be clear, mortgage rates haven't dropped nearly as much as Treasuries, but at least they've dropped! The...(read more)

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Builders See Market Improvements

Posted To: MND NewsWire

New home builders finally got a little wind under their wings this month. The National Association of Home Builders (NAHB) said its NAHB/Wells Fargo Housing Market Index (HMI), a measure of builder confidence in the new home market, finally broke out of the low 60s where it has nested since the first of the year. The overall index rose 3 points to 66 in May, its highest level since October of last year. "Builders are busy catching up after a wet winter, and many characterize sales as solid, driven by improved demand and ongoing low overall supply," said NAHB Chairman Greg Ugalde. "However, affordability challenges persist and remain a big impediment to stronger sales." "Mortgage rates are hovering just above 4% following a challenging fourth quarter of 2018 when they peaked near 5%. This lower...(read more)

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Delinquencies Increased Slightly in First Quarter

Posted To: MND NewsWire

Delinquency rates popped up in the first quarter, pushing the percentage of mortgage loans that were behind by at least one payment up 36 basis points (bps) to 4.42 percent. The rate, derived from the Mortgage Bankers Association's (MBA's) quarterly National Delinquency Survey was 21 bps lower than in the first quarter of 2018. Foreclosures were started on 0.23 percent of mortgage loans, down 2 bps from the previous quarter and 5 bps year-over-year. "The national mortgage delinquency rate in the first quarter of 2019 was down on a year-over-year basis, which is another sign of a very strong economic environment, bolstered by low unemployment and rising wage growth," said Marina Walsh, MBA's Vice President of Industry Analysis. "Moreover, the serious delinquency rate - the percentage of loans...(read more)

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Home Owners Pull Back on Remodeling Work

Posted To: MND NewsWire

The National Association of Home Builders (NAHB) is seeing some softening in the residential remodeling sector. Carmel Ford noted in an article in NAHB's Eye on Housing blog several weeks ago that the association's Remodeling Market Index (RMI) fell three points to 54 in the first quarter of this year. The index is constructed in a manner similar to NAHB's Housing Market Index, but from a survey of remodelers rather than new home builders and has a breakeven point of 50. At that level more remodels report market activity is higher than report it lower than the previous quarter. The RMI has been above that breakeven point since the second quarter of 2013. This week another entry in the blog, this one written by Na Zhao, takes data from the U.S. Census Bureau's Construction Spending Report to...(read more)

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Non-QM, TPO, Marketing Products; 2-yr Yield Lower Than Overnight FF - What is Moving Rates?

Posted To: Pipeline Press

As we nip at the lowest interest rates in 2019, banking regulators are directing their attention to the declining quality of certain farm loans . A Federal Reserve report says from 2016 to 2018, nonperforming-loan ratios rose for farmland and agricultural production, as well as for credit cards and vehicles. Commercial loans aren’t risk free either. Flagstar has financial exposure totaling $69 million on a commercial and industrial loan to the now defunct reverse mortgage lender Live Well, per a 10-Q filing with the Securities and Exchange Commission. Flagstar’s stock sank accordingly. And for economic trivia, the U.S. is also seeing its lowest birthrate since 1986 – not exactly a recipe for an expanding economy. More on what is moving rates below. Lender Products and Services...(read more)

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Joe Sanchez
Allied Equity
Ph: 909-932-9226Fax:909-803-9840
400 North Mountain Ave., Suite 223
Upland, CA 91786 US
CA DRE License # 01201910, NMLS: 359382, Company ID: 359090
www.alliedequity.com
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