Sentiment Remains High

Feb 10 2017

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Last Friday's Employment report left investors feeling good about buying bonds, and mortgage rates improved over the first half of this week. An announcement from President Trump on Thursday was negative for bonds, however, and a partial reversal took place. After a couple of weeks with relatively little net change, mortgage rates ended this week a little lower.

The much weaker than expected wage growth in the Employment report released on February 3 eased investor concerns about future inflation. Lower inflation increases the value of future cash flows from bonds. With little economic news early in the week, investors purchased bonds, including mortgage-backed securities (MBS). Since mortgage rates are set based on MBS prices, rates declined.

On Thursday, President Trump said to expect an announcement about tax cuts in two to three weeks. Mortgage rates moved a little higher after the comment. There are a couple of reasons why tax cuts are viewed as negative for mortgage rates. The first is that tax cuts increase the wealth of the affected individuals or businesses. As they spend some of this money, it boosts economic activity, which in turn raises the outlook for future inflation. The second reason is that tax cuts increase the budget deficit, at least initially. This means that the government has to issue more Treasury bonds to fund the deficit. The added supply reduces the value of bonds, including MBS.

MortgageNews_2-10.pngThe report on Consumer Sentiment released on Friday showed that consumers remained optimistic about economic activity. While the reading was a little below the 13-year high seen last month, it was still quite high by historical standards. This survey from the University of Michigan measures the level of optimism or pessimism about current and future economic conditions. 

Looking ahead, Retail Sales will be released on Wednesday. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. The Consumer Price Index (CPI), a widely followed monthly inflation report, also will come out on Wednesday. CPI looks at the price change for goods and services which are purchased by consumers. Housing Starts will be released on Thursday. In addition, Fed Vice Chair Fisher will be speaking on Saturday morning, and Fed Chair Yellen will deliver her semi-annual testimony to Congress on Tuesday and Wednesday. 

Topics: mortgage news

The Money Source Hires Shayna Arrington as Chief Compliance Officer

Jan 26 2017

Shayna Arrington.jpgThe Money Source is pleased to welcome Shayna Arrington as our new Chief Compliance Officer to lead our regulatory compliance efforts.

Arrington comes to The Money Source with extensive governmental and private sector experience, including positions with the U.S. Department of Housing and Urban Development and the U.S. Department of Justice. Arrington was most recently a compliance attorney with the American Mortgage Law Group in San Francisco.
 
Rick Toma, Chief Operating Officer of The Money Source, praised Arrington’s deep industry knowledge and keen understanding of regulatory compliance.

“We are truly excited to expand our executive team with such incredible depth and breadth,” said Toma. “We are gaining an expert in compliance who has been at the forefront of the evolution of compliance in our industry.”

Arrington will oversee regulatory compliance within our many service lines, including retail lending, correspondent lending, wholesale lending and loan servicing. As we continue to build out industry-leading mortgage and financial technology, Arrington will assure our technology architecture is driving not only a class-leading user experience but also the highest levels of compliance.

Topics: The Money Source Inc., compliance, Chief Compliance Officer, Shayna Arrington

Fed Officials Surprise Investors

Jan 23 2017

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Comments from Fed officials and stronger than expected economic data were negative for mortgage rates this week. Renewed concerns about the United Kingdom's exit from the European Union offset a little of the increase, but mortgage rates ended the week higher.

Brexit is back in the news. On Tuesday, British Prime Minister Theresa May spoke about the UK's objectives in its negotiations for the United Kingdom to exit the European Union. According to May, the UK will not attempt to remain in the single market of the EU because it would require allowing the free movement of workers between the UK and the rest of the EU. Instead, the UK will negotiate trade agreements with the EU and other countries. It is difficult at this time to predict the effect Brexit will have on the economies in Europe. The uncertainty about the outlook for growth caused investors to shift to safer assets, including U.S. mortgage-backed securities. This added demand was good for mortgage rates.

On Wednesday, however, the Fed's Kaplan expressed support for tighter monetary policy due to progress in meeting the Fed's labor market and inflation goals. Of note for mortgage rates, he thinks that the Fed should soon begin to consider a reduction in the Fed's large holdings of MBS and Treasuries. The prospect that this change may take place sooner than expected was negative for mortgage rates. Later that day, Fed Chair Yellen said that most Fed officials expect to raise the federal funds rate gradually until it reaches 3.00% by the end of 2019. This was a faster pace than many investors had expected, and Yellen's comments also pushed mortgage rates higher.

MortgageNews_1-23.pngHousing data released this week revealed that the housing market ended 2016 on a positive note. In December, housing starts rose 11% from November, well above the expected levels. For the year, housing starts were 5% higher than in 2015, making it the best year since 2007. 

Looking ahead, additional information about policy changes under the Trump administration could continue to affect mortgage rates. Existing Home Sales will be released on Tuesday and New Home Sales will come out on Thursday. The first reading for fourth quarter GDP, the broadest measure of economic growth, will be released on Friday. Durable Orders, another important indicator of economic activity, also will come out on Friday. 

Topics: The Money Source, mortgage news

Announcing Bulk Registration!

Jan 19 2017

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We are pleased to announce the latest feature of our EASY loan portal - Bulk Registration!

This feature will save you time which of course saves you money! You'll be able to map your LOS to our template and submit dozens of files in a matter of seconds.

Once activated, you'll access bulk upload on the EASY Registration page where you will upload all of your files in one document. Your Post Closing team will then take care of uploading the FNM 3.2 of the loan files at a later time.

To enable the Bulk Registration feature for your team, please contact your Account Executive.

Click here to log  into EASY!

Topics: EASY, bulk registration

Wage Inflation Picks Up

Jan 09 2017

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Mortgage rates showed some nice improvement following Wednesday's release of the Fed Minutes. Friday's key Employment report caused a reversal, however, and mortgage rates ended the week with little change.

From the presidential election until the last few days of the year, the trend in yields was upward, and this kept many potential bond buyers on the sidelines. Buyers finally stepped in at the end of the year and then paused early this week. It appears that they were waiting until a major risk, the Minutes from the December 14 Fed meeting, was out of the way. When there were no surprises in the Minutes, investors felt comfortable purchasing bonds again. The rush to buy intensified on Thursday, pushing mortgage rates to the best levels in a month, but Friday's economic data halted the rally.

MortgageNews_1-9.pngThe most notable aspect of Friday's closely watched monthly Employment report was an upside surprise in wage growth in December. Average hourly earnings were 2.9% higher than a year ago, up from 2.5% last month, and the highest level since 2009. Job gains in December came in right on target. The unemployment rate increased to 4.7%, as expected.

Another important economic report released earlier in the week also hinted at higher future inflation. Manufacturers reported that they expect a large increase in the prices to be paid for producing goods. Since it reduces the value of future cash flows, inflation is negative for mortgage rates. Already wary about inflation due to the manufacturing report, investors pushed mortgage rates higher after the wage data.

Looking ahead, the most significant economic report will be Retail Sales on Friday. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator. Before that, the JOLTS report will come out on Tuesday. JOLTS measures job openings and labor turnover rates. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday, and there will be many Fed officials speaking during the week. 

Topics: mortgage news

Positive Outlook for Housing

Dec 29 2016

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On little news and light trading, mortgage rates ended the last few days of 2016 a little lower, reversing some of their recent rise. The economic data released this week had little impact.

Despite the rise in mortgage rates since the election, there are many reasons to be optimistic about the housing market and overall economic activity heading into 2017. This week's release by the Conference Board of the consumer confidence index is the latest.

MortgageNews_12-29.pngOn Monday, the index revealed that consumers are more confident about their future than at any time in the last 15 years. Low unemployment, rising wages, record stock market values, home price appreciation, and expectations of growth-friendly policies from the Trump administration are contributing factors.

Even though inventories of homes available for sale are at very low levels, home sales are ending 2016 at the highest levels since the 2008 recession, and demand from home buyers remains high. In addition, there is reason to be optimistic that home builders may pick up their pace of construction next year. A December survey of home builders showed a surge in optimism since the election. Single-family housing starts and building permits are near multi-year highs. Confident consumers and home builders are solid reasons to look for continued improvement in housing market activity next year. 

Looking ahead, the ISM national manufacturing index will be released on Tuesday. The Minutes from the December 14 Fed meeting will come out on Wednesday. The ISM national services index will be released on Thursday. The next Employment report will come out on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Mortgage markets will be closed on Monday in observance of New Years.

Topics: mortgage news

Home Sales Rise

Dec 22 2016

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The economic data released this week had little impact on mortgage rates. Tuesday's Bank of Japan meeting also caused little reaction in U.S. markets. Mortgage rates ended the week lower.

MortgageNews_12-22.pngWhile it had little market impact, Wednesday's report on sales of previously owned homes exceeded expectations and reached another multi-year high. November existing home sales increased a little from October to the highest level since February 2007. Existing home sales were 15% higher than a year ago.

This figure is inflated somewhat, though, since sales in November of last year were depressed by the implementation of new closing disclosure requirements. Total inventory of existing homes available for sale fell to a 4-month supply, and it was 9% lower than a year ago. The median existing-home price was 7% higher than a year ago. Since sales of previously owned homes measure closings, the November data was not affected much by the increase in mortgage rates seen since the election.

Thursday's report on orders for durable goods contained mixed news. Durable goods are products which are expected to last more than three years. The overall figure revealed that orders for durable goods in November declined 4.6% from October, which was close to the expected levels. The decline was mostly due to a drop in aircraft orders. Since certain products such as aircraft tend to be very volatile from month to month, investors generally prefer to look at a core reading to get a better sense of the underlying trend. This core indicator of business investment, nondefense capital goods excluding aircraft, showed a healthy increase of 0.9% from October. 

Looking ahead, it will be a light week for economic data. Pending Home Sales will come out on Wednesday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. During the last couple of weeks in December, trading volume tends to be lighter than usual, which can lead to exaggerated price swings. Mortgage markets will be closed on Monday in observance of Christmas. 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline)

Topics: mortgage news

Did You Know - Purchase Advice

Dec 16 2016

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You can download the Purchase Advice within the Reports section of EASY. 

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Define the date range, download, and export to Excel.

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This report also tells you how quickly we purchased the loan.

We are you partner on your path to successa and our EASY system is built for you!

Topics: purchase advice, did you know

Fed Projects Faster Pace of Hikes

Dec 16 2016

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Wednesday's Fed meeting turned out to be negative for mortgage rates. Recent economic data had little impact. As a result, mortgage rates ended the week higher.

As widely expected, the Fed raised the federal funds rate by 25 basis points. Unfortunately for MBS, Fed officials also raised their outlook for the pace of future rate hikes. They now forecast three rate hikes in 2017, one more than previously projected. The faster pace was viewed as negative for mortgage rates. But why? The purpose for raising the federal funds rate is to keep inflation from rising above the Fed's target of 2%. This should be a good thing for mortgage rates. 

Part of the reason for the adverse reaction stems from a more direct effect the Fed has on mortgage rates. The Fed owns over $1.7 trillion of the agency mortgage-backed securities (MBS) that it purchased during its quantitative easing (QE) days. The Fed keeps the balance of MBS around that level by buying new MBS to replace that which pays off. The Fed is currently the buyer of approximately 25% of all newly issued MBS. This added demand from the Fed drives MBS prices higher and mortgage rates lower. The Fed says that it will not allow its holdings of MBS to decline until "normalization of the level of the federal funds rate is well under way." When that will be is hard to say, but the faster they raise the federal funds rate, the sooner their demand for new MBS will be removed.

MortgageNews_12-6.pngOn Thursday, the December National Association of Home Builders (NAHB) housing index showed that home builder confidence jumped from 63 to 70, far above the consensus, and the highest level since 2005. According to the NAHB, home builders are optimistic that the Trump administration will "reduce costly regulatory burdens." 

Looking ahead, there will be a meeting of the Bank of Japan on Tuesday which could influence U.S. mortgage rates. In the U.S., Existing Home Sales will be released on Wednesday. Durable Orders and Core PCE will come out on Thursday. Core PCE is the inflation indicator favored by the Fed. New Home Sales will be released on Friday. Mortgage markets will close early on Friday in observance of Christmas. 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline)

Topics: mortgage news

The Money Source Hires John Brumund to Grow National Network of Retail Production Centers

Dec 14 2016

DSC_5097 _2.jpgThe Money Source, a rapidly expanding nationwide mortgage lender and loan servicer has hired John Brumund as their new Senior Vice President, National Distributed Retail Director.

In this position, Brumund will lead a new initiative to continue to grow their retail lending presence throughout the United States for The Money Source and drive pre-qualified mortgage leads to a nationwide network of Regional Retail Production Centers.

Brumund comes to The Money Source with more than 20 years of experience in national production within the retail and wholesale mortgage origination industry. He held executive-level positions at SWBC Mortgage and Pacific Union Financial, and was the Chief Technology Officer and Executive Vice President of Wholesale Lending at Paramount Residential Mortgage Group before joining The Money Source.

"John’s experience and qualifications along with the respect that he has earned in the industry made him the perfect candidate to help continue to grow our retail channel,” said Trent Ford, Executive Vice President of Retail Lending.

The Money Source’s rapidly expanding Arizona offices and junior loan officer program will support the expansion, positioning the company to evolve and grow for years to come.

“We’re always looking around the bend,” said Darius Mirshahzadeh, CEO of The Money Source. “We know the retail sales model is evolving and we’re engineering our platform for the next generation of homebuyers. We’re looking to people, like John, to realize our vision for a new retail lending platform that empowers our sales teams and attracts buyers in a way that works for both us and the customer.”

Brumund’s hire follows a year of nationwide expansion for The Money Source, including hiring more than 500 new employees, opening offices in Santa Ana, Calif.; Phoenix, Ariz.; Meriden, Conn. and funding over $1 billion in new loans in one month. The Money Source was recently honored as a Financial Services Silver Stevie® Great Employers award winner. This honor follows recognition in May, when The Money Source was awarded the Bronze Stevie® Award for “Management Team of the Year.”

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