mbs: Big News in the Interest Rate World!
- 01/07/12 03:26 PM
Big news in the Interest Rates market! The mortgage backed securities that enable banks to package loans into the secondary market are at an all-time high which means rates are great and getting better. Only once ever has the 3.50% coupon MBS from Fannie Mae closed this high and it was in the excitement of the “Operation Twist” announcement and introduction about 100 days ago. At that time interest rates plummeted. Today we are experiencing the same thing with interest rates in a place that allow for cost-free, 30-year fixed loans on purchases and refis with a 3 in … (5 comments)
mbs: "Significant" is more significant than you would think!
- 09/26/11 05:44 AM
The Fed’s FOMC meeting announcement on Wednesday started a small landslide in the global equity markets. The impact on bond markets and interest rates were significant and have painted a new picture for expectations in interest rates. The 10-yr Treasury is the most important indicator in the commercial loan world. Thursday the 10-yr dipped down to 1.72%, its all-time lowest closing yield. All-time. Other commercial loan index values dropped as well. Home mortgages followed the down trend, sending APRs below 4%. Both the 10-yr T and the home mortgage markets rebounded slightly on Friday, but the bullish trend in interest rates … (0 comments)
mbs: How to read a candlestick chart of prices in Mortgage Backed Securities - impact on rates.
- 08/23/11 09:06 PM
Here is a candlestick chart of the most common Mortgage-Backed Security or MBS (3.5% 30-yr FNMA) and its activity over the past 90 days. I’ll be happy to cover any of it in detail, but in general the candles represent the price of bonds (when price goes up, yield goes down and rates improve). MBS are where banks get mortgage money to lend, so there is a very direct relationship between movement in price of bonds and what banks offer.
The fat part of each candle represent open and close, wicks represent intraday high and low. Last 3 days are … (0 comments)
mbs: What Drives Interest Rates? Jobs Numbers Tomorrow Will Be Huge For Rates - Preview Them Today!
- 07/07/11 09:17 AM
Today, ADP put out their estimation of the jobs numbers. Tomorrow the Bureau of Labor Statistics (BLS) will issue their official report for June (albeit, full of estimations.) The consensus is that private, non-farm payroll (NFP) jobs will grow by 110,000. This is better than prior weeks going back for 3 months but just barely above the rate at which the working-age population grows. Our interest rates are driven by the availability in the secondary market for banks to sell bundled loans. These bundles are called Mortgage-Backed Securities (MBS). When the economy is heating up, bond holders anticipate inflation. They aren't … (0 comments)
mbs: Wondering What the QE2 Fuss is All About? Read Here, then Watch Today @2:15 et for Big News!
- 11/01/10 09:53 AM
A big week for the economy is off to the races this morning and interestingly, the Mid-term Elections on Tuesday are NOT the biggest story. We’ll get to those stories in a moment, but first let’s take a look at today’s rates. We are still right at historic lows in residential mortgage rates. During the past week they stepped up a bit and then back down as you’ll see below. The commercial rates are enjoying very low rates as well with lenders approving loans and money flowing a bit better than 6 months ago. Residential Rates: conventional, conforming with normal closing … (0 comments)
mbs: Fed Buying of MBS off the Cliff and Mortgage Rates Respond
- 04/17/10 07:12 AM
As the headline suggests, the Fed purchases of Mortgage-Backed Securities came to a screeching halt on Wednesday. The only surprise to me was that the market didn't "bake in" the known-certain drop off in demand prior to the actual date. Sure enough, on Wednesday the markets dropped precipitously as the chart at the right shows So what was the effect on residential 30-year mortgages? You can see the long red tail has taken us into territory close to lows for the year. Remember that this chart reflects supply and demand pricing for MBS, lower prices means higher yields and higher interest … (0 comments)
mbs: Cheerleading from Washington, but Reality is Driven by Bond Purchasers
- 04/17/10 06:10 AM
There was pressure on bonds during the week from two fronts, but even with a bit of an unfavorable slide in MBS, Signet's 30-year residential mortgage rates stayed at 4.750% for the price of an origination and normal closing costs. Pressures came from economic news threatening some inflation and from supply and demand of bonds being issued (primarily from the US Treasury.) Here are some touch points on economic activity: Retail sales drew attention from the cheerleaders, but a closer look says nearly flat for 3 months and over 6% off from where we were 2 years ago. Treasury bond issues … (0 comments)
mbs: Rates Drop and Buffett Speaks up on Bond Buying
- 11/16/09 03:45 AM
Rates are even better this week than last! We are locking conforming loans at 4.625% for 30-year fixed for the price of an origination and normal closing costs. Why the improvement? Mortgage Backed Securities (MBS) continue to ride sky high with values very close to their 2-year high-water mark set 6 weeks ago. There are more investors wishing to buy MBS as an excellent investment, now safely returning twice what CDs and other fixed income instruments are returning. The volumes available (supply) of mortgage bonds dipped lower in the last 2 weeks as home purchases and refinances slowed, causing demand to … (0 comments)
mbs: Treasury Note News Becomes Good News
- 06/30/09 04:20 PM
It has been a great week for long-term mortgage rates! Before I get to some of the causes and what we can anticipate, let me make a quick report on the state of banks and their willingness to lend. If you follow me on Twitter, you saw that another local lender just shut their doors on lending to commercial property investors. I know of two stellar investor deals with exceptional guarantors who were turned away from what I believe is the last remaining local bank who was lending on investor deals. That closing leaves Signet Mortgage as the sole channel to … (0 comments)
mbs: It's all about inflation.
- 06/30/09 04:13 PM
It’s all about inflation. The markets have been moving in gargantuan steps over the past month starting on May 21, right before Memorial day with the first realization that all of the deficit spending needs to be funded with Treasury Debt offerings (duh!) More debt offerings mean two very bad things for mortgage backed security interest rates: 1) competition for fixed-income investor dollars and 2) more debt = more inflation. And recently, the competition has been fierce. This past week had some of the best and worst of the tug-of-war for investor dollars in play. If you follow me on … (0 comments)
mbs: Record lows set in rates and unemployment
- 01/12/09 06:03 AM
Good morning! The global economy continues to plumb new records and some that are fairly old. To wit, the Bank of England lowered its targeted rate to 1.5% last week from 2.0%. It has never, since its 1694 creation in been below 2.0%, not through the Great Depression, or world wars, but it is there now. Job loss hit a record low (high number 2.6M, but negative – see the chart below) making 2008 the worst year since 1945. On the plus side, we are more than double the 1945 population of 133M people, but this is a very big job … (0 comments)
mbs: Treasury Saber Rattling and Rates in the low 5% range
- 12/08/08 01:08 PM
Big actions continue to impact Mortgage-Backed Securities, and first, let's talk about the Treasury and their desire to jump start housing with 4.5% mortgage rates. I know this has the media all a-twitter. It was a story that broke in Thursday's Wall Street Journal article (click here) and was picked up in most newspapers on Friday with quotes like this from the NYT News Service "At the Treasury Department, meanwhile, top officials continued to work on a plan to boost the housing market by subsidizing 30-year home mortgages with rates as low as 4.5 percent - a level that homebuyers have … (0 comments)
mbs: Mortgage Rates impact from the stock market swings explained
- 11/21/08 06:15 AM
Well the stock market continues to tumble and surprise with bad news. Last week I saw something I had never seen before – the targeted price of a stock (GM in this case which makes it all the more unusual) was in an analysts report projected to be $0.00. That’s right, nothing. A couple of weeks ago Mattel, the maker of Hot Wheels cars made news when it had a market cap greater than GM and now it looks like most companies might. This is a sad statement on a decades-slow response to market demands and workforce contracts. Let’s hope there … (0 comments)
mbs: Favorable bounce after the Fed rate cut. Look for another next month.
- 11/04/08 06:16 AM
Fed Week was surrounded with a full-scale shift of funds from Mortgage-Backed Securities (MBS) into the stock market and elsewhere and with it we saw quite a negative move in bonds and rates. But it seemed to find a floor after the announcement with a bounce favorable that continues into today. As I mentioned in my News Flash on the announcement day, this is different from recent Fed rate changes in that the drop in rate didn't have a negative (opposite) effect on mortgage rates that are long-term and all about inflation. Why not? The Fed announcement wording reiterated what we … (3 comments)
mbs: Historic, Unprecedented Actions - Explained!
- 09/22/08 05:46 PM
Well, HISTORIC seems to be an understatement for the activity right now on Wall Street and Washington, D.C. Certainly the biggest financial activity since Black Monday in 1987 and the formation of the Resolution Trust Corp in 1989. I am sure you have heard and read much about the specifics of the rescue efforts so I will try to give you the mortgage-backed securities and long-term interest rate impact of these events to add to your knowledge-base of what’s going on. I hope you will be able to share this information with your clients in making significant financing decisions. It is … (1 comments)
Big news in the Interest Rates market! The mortgage backed securities that enable banks to package loans into the secondary market are at an all-time high which means rates are great and getting better. 
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