Below is a collection of articles, news, and announcements associated with our industry.

Posts Tagged ‘Treasury’

BlogTalkRadio Podcast – Apr 12, 2010

Thursday, April 22nd, 2010

MBS prices are up nicely this morning, up 9/32nds.  No economic data was released this morning.  The Dow is also up.  It is above 11,000 for the first time in 18 months.

Last week was a great week for the mortgage market.  MBS prices improved about 24/32nds during the week.  Most of the improvement followed a very strong 10 yr Treasury auction.  Strong demand and foreign participation fueled a rally in Treasury prices, which spilled over to MBS prices.  Also kind to MBS prices during the week were the minutes from the 3/16 Fed meeting.  The minutes showed that the Fed was nearly unanimous in their belief that Fed funds rates need to stay very low for an extended time and that inflation was not a concern.   Next week will be full of significant economic announcements.  On Wednesday both CPI and Retail Sales for March will be released and on Thursday Industrial Production will be released.

Glen Corso, Executive Director of the Community Mortgage Banking Project, joined the show to discuss further the need to voice concerns about the 5% risk retention provisions in the current Financial Reform bill before the Senate.  Glen described that passage of the bill with this provision in its current form will be detrimental to community mortgage bankers and their customers.  Glen proposed a revision to the bill to exempt from the retention provisions soundly underwritten loans.  The Bill is expected to be voted on by the full Senate in late April and Glen encouraged all the listeners to contact their Senators.

Andy Schell, a CPA and a CMB, joined the show to discuss the importance of quality loan level accounting systems and reports.  Too many mortgage bankers have no way of knowing which of their loans make them money and which cost them money.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

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BlogTalkRadio Podcast – Apr 5, 2010

Thursday, April 22nd, 2010

MBS prices are lower this morning after a stronger than expected ISM Services Index was announced at 8:30 a.m. et and then at 10:00 a.m. et a much better than expected Pending Home Sales number was released.  This followed a week last week that saw MBS prices fall by about 1%.  Last week included the end of the Fed’s MBS purchase program, but the end of the program cannot be the sole blame for the drop in MBS prices.  Treasury prices fell as well and stocks improved.  Generally, the economic announcements during the week, including the Nonfarm Payrolls, were better than expected increasing the need to build in yield to cover longer term inflation.  The spread in yields for 10 yr Treasuries versus mortgage-backed securities did widen but only by 15 to 20 basis points.

The focus of the mortgage industry regarding pending legislative and regulatory issues is now placed squarely on the Senate Finance Committee’s passage of the Restoring American Financial Stability Act.  This Act contains many provisions which if passed will impact mortgage companies, but possibly none as significantly as a provision which will require mortgage originators and/or security issuers to retain 5% of the risk of the loans they originate and sell.  Special guest Glen Corso, Managing Director of the Community Mortgage Banking Project, explained the vague nature of many of the risk retention provisions of the Act  and the substantial degree to which regulatory decisions will dictate how its provisions are interpreted.  The retention of risk as included in the Act will substantially change the mortgage industry.

Guests Tom Millon and Rob Katz joined the show to finish the discussion on the risks of implementing a mandatory delivery strategy versus a best efforts strategy.  Experienced professionals and accurate, timely data were identified as essential elements of a successful conversion.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

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BlogTalkRadio Podcast – Mar 29, 2010

Thursday, April 22nd, 2010

MBS prices were volatile last week and fell about half a point during the week.  Most of the push for MBS prices lower came from weak Treasury auctions.  On Wednesday the 5 Yr Treasury Note received lower than usual demand, especially from foreign investors, and the yield required from the bidders was higher than the previous trading range.  The weakness in the Treasury auction spilled over to the MBS market.  The economic data released during the week was mixed with Durable Orders better than expected and the housing data was a little weaker than expected.

All of the focus in Congress now that Health Care has passed seems to be with the Restoring American Financial Stability Act of 2010.  This proposed law will have sweeping changes for the mortgage industry, if passed.  It includes the creation of a new regulator for consumer protection, retention of 5% of the risk on loans originated and then sold, and increased HMDA reporting requirements, among other things.  This 1300 page bill seems to be on a fast track.

Discussion continued on the risks and benefits of converting a mortgage company’s operations from a best efforts delivery of loans originated to a mandatory delivery.  The focus of this week’s discussion was on the importance of good data and the need for additional data collection points.  Accurate and timely data on loans in pipeline and closed loans is essential to effectively hedging the interest rate risk associated with mandatory delivery of loans, special guest Rob Katz of Del Mar DataTrac explained.  Also critical to effectively managing the risk, is the need to have a centralized lock desk to communicate with investors.  Having loan originators lock directly with investors may work in a best efforts environment, but not so in with mandatory delivery.

Click PLAY to listen to the podcast of this week’s BlogTalkRadio/Lykken on Lending with Dave Lykken and MBSQuoteline’s Joe Farr :

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