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MBS MORNING: Foreign Demand for TSY Notes and Bonds Still Strong	3/15/2010 9:07 AM
Posted To: MBS Commentary The Treasury Department this morning released Treasury International Capital data for January 2010. This report tracks flows of investment funds leaving and entering the U.S financial system. Foreign accounts bought a net total of $61.4bn in TSY notes and bonds in January 2010 . Compare that to $69.9bn in Dec and $117.9bn in November and $289.2 billion in January 2009. Notes are debt securities with a maturity between 1 year and 10 years (rate sheet influential). Bonds are debt with a maturity greater than 10 years. Both notes and bonds trade with a coupon. Yields are determined by the coupon and the price the market is willing to pay for that coupon clip. For instance, the 10 yr note is trading with a 3.625% coupon. Current market is 3.71%. The yield is higher than the coupon, the 10 year...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
FDIC Selling Mortgage Assets of Failed Banks; "Good" Foreclosure Stats; Updates from: Chase, WAMU, USB, Wells, FAMC,SunTrust	3/15/2010 9:04 AM
Posted To: Pipeline Press As the lyrics from "Green Acres" noted, "New York is where I'd rather stay. I get allergic smelling hay. I just adore a penthouse view. Dah-ling I love you but give me Park Avenue." New York regulators on Friday closed the Park Avenue Bank with total assets of $520 million and total deposits of $494 million. The FDIC has arranged for Valley National Bank (NJ) to run it. (Valley National is also taking over LibertyPointe Bank, which was shuttered Thursday.) Down in Florida Old Southern Bank was shut down, and will be run by Centennial Bank out of Arkansas. And in Louisiana, Statewide Bank was closed by the Louisiana Office of Financial Institutions, which appointed the FDIC as receiver. Home Bank , also based in Louisiana, will assume all of the deposits. There is indeed...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS OPEN: Range Trade with a Chance of Chopatility	3/15/2010 6:22 AM
Posted To: MBS Commentary Good Morning. An essentially empty econ calendar made it easy for rates traders to price in a pre-auction concession last week. The corresponding effect was higher benchmark yields and steeper yield curve (more expensive funding for TSY too!). However, healthy demand was seen taking down the debt and the pre-auction concession was pretty much price back out of the curve...leaving us almost flat on the week. Below is the week over week for the 3.625% coupon bearing 10 year note. On Monday morning, 10s were yielding 3.696%, moved as high as 3.779% over the course of the week, then fell back to 3.703% by Friday afternoon. Status quo was restored after the auctions. On Friday afternoon, the FN 4.0 was +0-01 at 97-28 yielding 4.208% and the FN 4.5 was +0-00 at 100-28 yielding 4.402%. The secondary...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
The Week Ahead: FOMC Meeting, Housing Data, Inflation, Industrial Production	3/15/2010 6:01 AM
Posted To: MND NewsWire Equity markets are mostly lower across the globe Monday, leading US stocks to open sharply lower ahead of a moderately busy schedule. Two hours before the bell sounds, Dow futures are off 30 points to 10,543 and S&P 500 futures are down 4.50 points to 1,142.00. Commodity prices are mixed as WTI crude oil is trading down 58 cents to $80.66 per barrel but Spot Gold prices are up $2.37 to $1,104.27. Key Events This Week: Monday: 8:30 ― The Empire State Manufacturing Index is expected to expand for the eighth consecutive month in March. The consensus expects the index to fall 3 points to 22.0 in March, reflecting strong growth overall in the region. Economists from Nomura worry that the strong figures in February may not have been wholly accurate due to the early timing of the release. “Most...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Harmony Of The Trends And The Whole Day Explained In One Chart	3/12/2010 5:47 PM
Posted To: MBS Commentary (A bit long, but another worthwhile closing post to read... with some not-often-phrased-in-such-a-way explanations. I enjoyed writing it at least. Let me know what you think.) You know the "stock lever?" If not, that's the term we use to describe the common occurrence of stock prices and bond prices moving in opposite directions. Doesn't happen all the time, but in a general sense, sure. Last night we talked about both stock and bond markets closing at some pretty long term "on the fence levels" and so it was a reasonable assumption that it was up to retail sales and whatever else Friday could muster to convince stocks to go one way and bonds to go the other. I didn't have the minerals to offer a solid prediction, but simply that it could be a big day either...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Mortgage Rates Higher After Retail Sales Data. Floating into Monday	3/12/2010 3:20 PM
Posted To: Mortgage Rate Watch While benchmark Treasury yields moved slowly higher throughout the course of the week as our government auctioned debt to raise spending money, mortgage-backed securities managed to maintain a pretty consistent price range. After all was said and done and the auctions were behind us, mortgage rates were left basically unharmed, near the best levels of 2010. There was one more test to pass though: RETAIL SALES DATA. The Commerce Department released Retail Sales data at 8:30 am eastern this morning This report shows the monthly change in the total receipts at retail stores. Since consumer spending accounts for a large majority of GDP, market participants track retail sales to gauge economic growth. Last month’s report posted a 0.5% increase, a notable improvement from December’s disappointing...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
What Did Top Performing Mortgage Bankers Earn in 2009?	3/12/2010 2:51 PM
Posted To: The Garrett Watts Report Audited financials are starting to come in, and they’re confirming what we saw all year. Top performing mortgage bankers made 90-100 bps per loan. That means, for every $100 million you closed, you should have (and could have) earned $900,000 to $1 million. If you didn’t make this much, you need to look carefully at why you didn’t. Or call us for a FOCIS-plus diagnostic to see what you can do to boost earnings per loan. The top quintile of companies we worked with over the year made over 100 bps per loan, with the top performer making 121 bps. For every $100 million they closed, they made $1.21 million. What most mortgage company Boards are somewhat clueless about is their earnings broken down into bps per loan. We see companies that did, say, $1 billion last year and earned...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
MBS LUNCH: Mortgages Left Behind as Benchmarks Rally	3/12/2010 1:50 PM
Posted To: MBS Commentary It was an interesting morning in the rates world. Let's start with our fearless leader, the benchmark 10 year note. In below average trading volume, yields rose marginally (at most) in the overnight session before popping higher on the heels of a much better than expected Retail Sales print at 830. After that we noticed some nibbling from real money accounts as 10s hit session price lows (yield highs). This bargain buying coupled with a short covering bid helped push yields lower ahead of the release of Consumer Sentiment survey results, which turned out to be worse than expected at 72.5 vs. forecasts for 73.6. The reading was however not far from the six month average and much improved from levels one year ago. Here is a table of the results: On the surface this data appears to be bond...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
Fitch Ratings: Expiring Housing Incentives Likely to Increase Loan Losses this Year	3/12/2010 11:51 AM
Posted To: MND NewsWire Fitch Ratings is warning that the expiring homebuyer tax credits, the end of the Fed's MBS Purchase Program , and the growing maturity of various government loan modifications programs are likely to increase loss severities on distressed mortgage loans later this year. The report says that these factors as well as low interest rates and the Federal Reserve's $1.25 trillion mortgage-backed securities purchase program have led to an improvement in both home prices and loss severities since the second quarter of 2009, but this is unlikely to continue. The $8,000 tax credit for first-time homebuyers and $6,500 credit for move-up buyers will be effectively expiring with the deadline for signed sales contracts on April 30. Buyers must complete the sale by June 30 so any drop off in sales...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.
USDA Rural Housing Funds to Run Dry by April. Lenders Already Dropping the Program	3/12/2010 11:04 AM
Posted To: MND NewsWire USDA Section 502 loans are primarily used to help low-income individuals or households purchase homes in rural areas. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities. There is no required down payment. The lender must determine repayment feasibility, using ratios of repayment (gross) income to PITI and to total family debt. John Rodgers called my attention to the following bulletin released by the USDA: This message is to notify you that program funding for the Single Family Housing Guaranteed Loan Program will likely be exhausted by the end of April, 2010 . Once funding is exhausted, the Agency will not issue Conditional Commitments “subject to receipt of appropriated funds. ” This...(read more) Forward this article via email: Send a copy of this story to someone you know that may want to read it.

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