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Mortgage Daily News

MBS RECAP: Bond Yields Struggle to Break Last Week's Floor

Posted To: MBS Commentary

There were no significant economic reports or events today, and only a few newsworthy developments. The biggest of these also happened the earliest (yesterday night, in fact) when the White House announced the suspension of certain tariffs on China. Stock futures liked the news (after all, the threat of a trade war has been a big deal), but bonds didn't react much. As the overnight session progressed, a familiar trade took shape in European bond markets with core yields continuing to rally. Whereas that had been helpful for US bond markets on Friday, they were less responsive today. Both before and after the European rally, US yields approached and bounced at the 3.06% technical level (to be fair, it's more like 3.055%). This is right were bonds ran into resistance on Friday afternoon...(read more)

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Mortgage Rates Unchanged to Begin Week

Posted To: Mortgage Rate Watch

Mortgage rates held steady today, which is better than what could be said for most of last week when rates shot up to the highest levels in 7 years. Friday was the only day of improvement, but it was scarcely enough to undo the damage from the previous 4 days. That said, it did raise questions. Specifically, was Friday some sort of indication that the worst was behind us in terms if upward rate momentum? Answering that question is tricky business because the time frame matters greatly. In the short term, there's always a possibility that a prevailing trend toward higher rates will cool-off and reverse course. While that's also technically possible over longer time horizons, we can begin to talk more about probabilities and less about random chance. With that in mind, we've be discussing the...(read more)

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Will "Freeing" Fannie/Freddie Improve Housing Finance?

Posted To: MND NewsWire

In a prior article we summarized the options the Trump Administration might utilize to reform the residential mortgage financing system should Congress continue to drop the ball. Two noted economists, Jim Parrott and Mark Zandi, writing for the Urban Institute, address the notion of shrinking Fannie Mae and Freddie Mac's (the GSEs) footprints and eliminating their cross-subsidy of higher risk borrowers. This article summarizes their alternatives for ending the 10-year government conservatorship of the two companies. The director appointed to replace Melvin Watt when his term as director of the Federal Housing Finance Administration (FHFA) expires next year will undoubtedly reflect the attitudes of the Administration including their claimed commitment to changing the GSEs' status. The authors...(read more)

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