Bryan Flynn's Central Massachusetts Mortgage Blog

Mortgage Market Update for Friday July 25, 2008

Fri, 25 Jul 2008 08:24:36 -0500

Bonds had a nice rally yesterday and closed above a key level of resistance. In order for confirmation of a technical break through the next trading day needs open above that as well......well bonds did not and they have given back 70% of yesterday's gains already. The headline number of durable goods came in much better than expected. Estimates called for negative 0.3% and the actual number was up 0.8%, stock market should open well today. Friday's in the summer tend to be very volatile so expect yet another crazy day in the markets.

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The above Mortgage Market Update information was provided by Bryan Flynn of Wells Fargo Home Mortgage. Bryan can be reached at Bryan.K.Flynn@wellsfargo.com or by phone at 508.363.2223. Bryan has worked in the Central Mass and Worcester area for the past 6 years as a mortgage loan officer.

More than likely, this is one of the largest and most important financial transactions you will ever make. I have a desire to help people out and love my job. You might need a mortgage only four or five times in your entire life... but I do them every single day. It's your home and your future. It's my profession and my passion. I'm ready to work for your best interest.

For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

A Week of Rising Rates

Fri, 18 Jul 2008 09:01:02 -0500

Mortgage Bonds have traded lowered for 4th straight session today losing just shy of 200 basis points over that period. To get a rate quoted on Monday a client would now have to pay 2 points on their loan if they did not lock and wanted that , that is scary.

No economic news out this morning; movement today should be technically driven, the sellers are losing their steam and the buyers should be coming to market for a reversal in pricing.

Have a great weekend!

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market Update for July 16th, 2008

Wed, 16 Jul 2008 07:45:05 -0500

CPI was hotter than expected which is inflationary and bad for mortgage bonds.

CPI was estimated at .7% and came in at 1.1% year or year is 5%

Core CPI, ex -food and -engergy, was estimated at .2% and came in at .3% year or year it is 2.4%

It is the biggest CPI jump in a single month since 1982, biggest year or year rise since 1991.

Bonds are down 25 bps but are down 19 bps right now but it's still early......overall not a great number but you kind of had to expect this so it could be priced in already by the traders.

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market Update for Tuesday July 15th, 2008

Tue, 15 Jul 2008 08:07:32 -0500

Another crazy day in this economy....the PPI was hotter than expected this morning which means inflation and the Retail Sales number missed. The core PPI which takes out food and energy was slightly better than expected which is some positive upside, but really food and energy is an obvious concern. Mortgage Bonds had a nice run up yesterday after their big brother, our government, backed Fannie Mae and Freddie Mac which confirms these companies are just too big to fail.

Stocks look to open down this morning as GM halted their dividend. Technically bonds closed between the 50 and 100 day moving average but are giving back some of yesterday's upside as they are down 16 bps this morning. The dollar hit a record low against the euro this morning as well. Look for volatility today as Bernanke speaks before Congress.

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

The Crisis of Confidence

Sun, 13 Jul 2008 21:03:57 -0500

The Crisis of Confidence....that's probably the best way to describe it.

Friday was a crazy day in the financial markets being headlined by the potential failure of the government sponsors agencies (GSEs), Fannie Mae and Freddie Mac. At the start of Friday it was reported the government could take over these agencies over the weekend and perhaps they would dissolve and rename them. Well both stocks opened sharply to the downside.

At about 2pm there were rumors that the Bernanke was going to announce the opening of the discount window to Fannie and Freddie to help solve their liquidity problems. By 315pm the information was deemed untrue. Freddie Mac rallied to positive territory and ended up closing slightly negative on the day, Fannie Mae was still done considerably. After the close both GSEs made a statement saying they had well more than required by law in liquid assets to be okay.

....and then there was today, Sunday....Treasury Secretary Paulson announced they would open the discount window to the agencies so they would have that liquidity if needed. Also they want the Treasury to be allowed to buy stock in the companies.

A quick refresher on mortgages...a lender provides the money to close the mortgage and then sells it to the GSEs who package them up with other like mortgages and convert them to bonds(or securities...same thing) THEN they are sold off to investors while a lender just services(collects the monthly payments) the loan for the investors and gets a fee.

However, the appetite for new bonds coming to market is weak, they are fearful of default, which to all of us lenders and agents out there we know they these securities are A+ and if the credit score is sub 719 without a huge down payment the GSEs are charging a decent sized risk premium.

These announcements are an added security blanket for the GSEs with investors, thus increasing their confidence.

Tomorrow Freddie Mac is scheduled to sell $3 billion in debt...I expect a strong sale of them and mortgage bonds to do well after their Friday afternoon sell-off.

In my opinion, the government dealt with this quite well.

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market Update for Wednesday July 9th, 2008

Wed, 09 Jul 2008 06:13:25 -0500

Bonds have been on a wild ride this week trading significantly lower until a sharp turn around Monday afternoon followed by a big rally yesterday, opening at their low and closing just off their high. The 30 year fixed rate is at it's best level in just over a month.

Bonds and stocks both finished up on the day which is not a normal occurrence. Oil was down over $5 on the day, the biggest one day drop in about 4 months.

Technically bonds broke through 2 levels of resistance and are just 28 bps below the 200 day moving average, which will be their next level of resistance to overcome. There are no major economic numbers for the rest of the week that should sway the market.

For the LOs out there....pricing should improve this morning as the late day repricing probably did not account for all of the upside benefit. If bonds open flat this morning expect slightly better rate sheets and it should be a prudent time to lock in those deals.

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market Update for June 30, 2008

Mon, 30 Jun 2008 08:35:51 -0500

Today is the last day of the 2nd quarter and the DOW is on pace to have its worse month of June since 1930. A new oil intraday high of $143.57 just hit as well. I just heard those stats and thought I should share.

This is my first update in a week, I was in training most of last week and had limited computer access. Mortgage Bonds did rally last week after the Fed changed their policy statement preparing themselves to act if inflation worries continue. Personal Consumption Expenditure was released Friday as well and the Core PCE which does not count food and energy was lower than expected estimated 0.2% and the actual was 0.1%; meaning inflation for now is in check. Bonds closed at their high on Friday above 2 levels of resistance and are up 6 bps today. Rates will be better this morning.

There is a lot of data to be released this week and being a short summer holiday week we should see a great deal of volatility. When trading volume is down, volatility increases.

945am today the Chicago PMI, officially known as the Business Barometer, will be released. The key number is 50, a number higher / lower of that equals an expansion / contraction of the Chicago manufacturing sector which is an overall indicator of the national economy.

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For more information on my service please check out my Central Mass and Worcester Mortgageswebsite or you can click to view Bryan Flynn's Mortgage profile

Mortgage Rate Update for June 23rd, 2008

Mon, 23 Jun 2008 17:45:26 -0500

This week is about about Wednesday and what the Fed is going to do. It would be an absolute shock if they chose to raise rates to begin the fight on inflation. Wall Street is most interested in what the statement is going to say about the issues and their views, expect volatility.....safe beat is to lock.

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Mortgage Rates for June 20, 2008

Mon, 23 Jun 2008 05:06:39 -0500

Bonds were off 3 bps on the day this Friday, aftering stalling out and not being able to break up the upward resistance line for the 3 consecutive day. There was not economic released and the down did finish off down over 200 points and the S & P finished down 1.8%. Unusual day for stocks and bonds both to lose stream. However bond traders awaiting the fed decision on Wednesday, expect a very votatile week ahead.

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market update June 19th, 2008

Thu, 19 Jun 2008 21:49:48 -0500

Rates were down modestly today 22 bps on the day. Bonds tested both the closest support and resisitance levels and closed right in the middle of it....meaning we are in another tug of war with the bulls and the bears going into next week's Fed meeting. From a technical standpoint bonds are still "oversold" so hopefully we can break through the resistance and get interest rates back down a bit.

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Market Update June 18, 2008

Wed, 18 Jun 2008 08:51:57 -0500

Mortgage Bond are trading higher 12bps this morning following yesterday's momentum. Bond are resting just above the closest resistance level which is bullish, no real news to report today. Watch the stocks if they go down should be good for bonds today. Tomorrow the Philly Fed Index will move the markets and next week the Fed meets......

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Mortgage Rate Update for June 17th, 2008

Tue, 17 Jun 2008 17:26:41 -0500

CPI was in line with expectations and PPI was a bit hotter this morning. Mortgage Bonds seems to have drawn a line in the sand for now and are attempting a reversal. We finished up 50 bps on the day closing right inbetween a dual layer of resistance. Bonds are also highly oversold which should bring some more buyers into this market and drive the price up a bit, thus dropping rates. Let's hope this continues tomorrow and we get rates back to the mid 6% range.

For now we are FLOATING!

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Mortgage Market Update for June 16,2008

Mon, 16 Jun 2008 09:50:53 -0500

Mortgage backed securities are trading flat on the day down just 3bps this morning. Bonds have been in a downward trend for the last 2 weeks and rates have crept up .75% higher nearing 7.00%.

The recent pressure on bonds are due to the pressure the heightened inflation concerns of the market. The Fed meets next week and bonds traders are looking for short-term rates to be increased which will be great for long-term bond rates....however don't expect much more than shift in the policy statement.

Floating for now....

Mortgage Market Update Friday the June 13th, 2008

Fri, 13 Jun 2008 22:52:08 -0500

Well it is official......the bond market is fearful of inflation. Some decent CPI numbers came out this morning but that was overshadowed this afternoon by the word no bullish bond trader wants to here........INFLATION is here and rising......well on the flip side it is quite obvious with the cost of food and energy. The manufacturing, wholesalers, and retailers are going have to pass their rising costs off to the consumer, at least partially and that leads to inflation.

At the end of May mortgage rates were in the low 6s and we are just another down day away from 7% conforming rates.

Bond traders are making their feelings loud and clear to the FED they want the funds rate to be raised. The Fed meetings in 2 weeks and it will be interesting to see what Big Ben and his posse with do.

Probably nothing with the rate, but a change in the statement basically saying they are going to raise rates sooner than originally thought....we will see.

Market Update for June 12, 2008

Thu, 12 Jun 2008 08:32:39 -0500

Mortgage Bonds are down 38 bps this morning as of 920am EST. Stock futures are up and oil is down which is leading to bond deterioration. Retail sales were released this morning and came in better than expected for May and better than they were in April, very good news for consumer sentiment. Some people did receive their stimulus checks at the end of May so that may have added to the positive numbers. With a dual layer of support just behind current prices it would be prudent to FLOAT for now.

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For more information on my service please check out my Central Mass and Worcester Mortgages website or you can click to view Bryan Flynn's Mortgage profile

Market Update for June 10th, 2008

Wed, 11 Jun 2008 07:28:32 -0500

On a technical note, mortgage bonds are down 5 straight session at 216 bps points....rates have rose to the 6.625% area on a conventional 30 year fixed. Bonds are oversold, which generally indicates that the buyers will be back and drive prices back up. When bonds drop suddenly they have a tendancy to retest half of their loss so in this case upside of above 100 bps...there is no guarantee and a lot with have to do with what the future economic indicators say, but technically it hopefully will happen

That being said bonds are trading high by 28 bps going into the retail sales number.

Market Update June 10th, 2008

Tue, 10 Jun 2008 06:12:13 -0500

Mortgage Backed Securities had a wild day yesterday. Off 81 bps at the low but did rally to close at a support level see chart below noting the circled red candlestick representing yesterdays trading day(amazing how that works)

Bernanke spoke yesterday about inflation believing the sluggish growth of our economy will hold donw inflation, seemingly not considering a rate hike in the near future. Bonds like good inflation talk and that was okay so we will see how bonds react this morning. Retail sales out Thursday...should see a big reaction in the market.

Market Update June 9th, 2008

Mon, 09 Jun 2008 07:19:39 -0500

Mortgage Bonds are taking a beating off this morning by 59 bps early bouncing off a resistance level and now are sitting down on a level of support. No economic data released today. Retail Sales is out Thursday which should be a market mover. Oil went up $16 a barrell on Thursday and Friday. Rates are at their worst level since the first part of March. Lehman Brothers lost 2.8 billion and is raising another $6 billion in cash....a sign the credit crisis is not quite over. All in all rates are in a down trend and we look for some support level to strengths and some good inflation news in the near future.

Mortgage Rate Update for 6/6/2008 - are we in a Recession???

Fri, 06 Jun 2008 07:18:00 -0500

Non-farm payrolls estimated -60,000 actual -49000 (better than expected...good news for the economy bad for mortgage rates)

Unemployment numbers estimated 5.1% actual is 5.5% (huge jump of .5% last time this happened was in 1986.....THIS IS A HUGE NUMBER PROBABLY CATCHING UP TO WHATEVER EVERYONE WAS EXPECTING)

Unemployed workers surged by 861,000 last month. There are now 8.5 million unemployed in the US.

We are still not technically in a traditional recession but seem to be in growth recession with rising unemployment with not enough grow to accommodate new workers coming into the labor force.

Mortgage Bonds prior to these numbers were down 25 bps on the day and in a down trend.......with those number bonds are now up 9 bps........the dust has not settled with these number....wait and see rates in an hour or so and I will update.

I feel I am not alone to think we are in a recession, regardless of what the numbers actually say, this time last year it was an entirely different feel.....agree? disagree?

Mortgage Rate Update for June 5th, 2008

Thu, 05 Jun 2008 11:08:58 -0500

Mortgage Bonds are down again today after breaking through the 200 day moving average yesterday afternoon. Initial jobless claims where lower than expected this morning and the umemployment rate is released tomorrow and given the inconsistentcy of this number recently we will remain in a LOCK. Should be a big market mover tomorrow. Stay tuned....

It' on tonight.....whom will win

Thu, 05 Jun 2008 07:31:18 -0500

Celtics v. Lakers

Last time these 2 teams meet in June was in 1987. The Lakers, led by Magic Johnson beat Larry Bird and the Celtics 4-2. Since that point the Celtics had ZERO success and some bad luck. The Lakers, went on to the championship 7 times and winning 5. Interesting stat I saw the other day is Phil Jackson, the Lakers coach, is 38-0 in series when his team wins Game 1.

21 years in the making....

So who is going to win?

Mortgage Market Update for June 4th, 2008

Wed, 04 Jun 2008 09:19:36 -0500

Mortgage Bonds are trading lower this morning and surprise, surprise they are sitting right on the 200 day moving average. On Monday bonds broke through and closed above the 200 DMA and did trade below it yesterday but closed in positive territory at the end of the trading day. Technically yesterday was a bulls v. bears struggle because of the wide trading range so it could be another day of uncertainty in the mortgage bond market.

Productivity and ISM Index both came in better than consensus and stocks have been down over the past few days so I expect a weaker bond market at least this morning.....if you took advantage of yesterday's reprice and locked you are in good shape, otherwise it is a wait and see what bonds do at the key level.

Unemployment numbers to be released Friday which should see some big revisions to last month's numbers, expect the markets to move.

Mortgage Rate Update for June 3rd, 2008

Tue, 03 Jun 2008 08:25:37 -0500

Mortgage bonds are trading -6 bps this morning with no economic data on the docket for today. Fed chairman Bernanke is speaking this morning about the economy and he could move markets, other than that bond trading will be driven by the stock market (stocks up bonds down vice versa)

Bonds did close above the 200 day moving average yesterday and if those levels can hold today bonds rates should be trending lower for the next few days. Some employment, productivity and manufacturing numbers are to be released tomorrow that could sway the markets, but for now I recommend a FLOAT as we still trade above the 200 day moving average.

Mortgage Rate Update for June 2nd, 2008

Mon, 02 Jun 2008 07:43:23 -0500

Mortgage bonds are up 22 bps this morning. After the selloff Friday afternoon, pricing should be right inline with the Friday morning rate sheets. Just 9 bps higher and bonds hit the strong resistance level at the 200 day moving average. Wait and see what rates do after the ISM number is released this morning at 10am.

The ISM is released on the 1st business day of each month reflecting the manufacturing industry for the previous month. Its a survey of purchasing executives at roughly 300 industrial companies. A number above 50 show expansion and below 50 contraction.

Last month's number was 48.6 and it is estimated this month to be 48. Stay tuned...as it is a market mover.

Update 1040am: ISM came out at 49.6 better than expect but doesn't seem to be enough to break through the 200 day MA

Mortgage Rate Update for May 30th PCE and Bulls v. Bears

Fri, 30 May 2008 08:42:06 -0500

Mortgage Bonds are up 41 bps as of 910am this morning. Core PCE, Personal Consumption Expenditures without food and energy, was released this morning in line with estimates, inflation is still under control. Year or Year PCE is 2.1% slightly above the Fed's target range of 1-2% but this the Fed expects that to creep up in the coming year more before it retreats back to their comfort zone.

Expect a nice pop in rate sheets this morning has bonds test resistance at the 200 day moving average. Yesterday bond did rally late day and close very near this open, this shows indecisiveness with the bulls and the bears, but give the bears the edge for now. The close yesterday should be a new level of support which would potentially narrow the trading range of bonds. Bonds are 1 tick below the 200 day moving average at their highs of the day, if stocks have a down day we could see a break above, but confirmation would have to be made next week as well for it to stick. See chart below:

See how rates sheets look this morning with pricing and realize this could be the best we will see for the next few weeks. Sit tight and be prepared to lock, a very very cautious float for now.