Shopping for a mortgage

[mattig]

nothing is rigged. We've seen this before albeit under different circumstances in 2008. Mortgage rate spreads vs Treasuries were even wider (and for far worse, more deeply embedded reasons). Can't remember if I posted this already, but this sums up a lot of the shit that is causing a lot of confusion for a lot of people:

https://housingbrief.com/article/5e6...7eae194022246e

And sort of an addendum to that from yesterday: https://housingbrief.com/article/5e6...7eae194022246e

This morning, many mortgage lenders are quoting higher rates. Spreads (between mortgages and Treasuries) will come back down, but that will take time and stability.

[Brock Landers]

Would mortgage plumbing (and possibly rates) change once this onslaught of refi works it way through? With 2 months worth of paperwork appraisals etc in a week time, do we just need to wait it out? Or have I got it all wrong

Not to say rates would go lower, just better chances a lender picks up the phone

[Danno]

I sent my guy an email 6 days ago, he just got back to me today.

[liv2ski]

Would mortgage plumbing (and possibly rates) change once this onslaught of refi works it way through? With 2 months worth of paperwork appraisals etc in a week time, do we just need to wait it out? Or have I got it all wrong

Not to say rates would go lower, just better chances a lender picks up the phone

If the 10 Year stays low like today, I would guess within 3-4 weeks the normal players will be stepping up for business again.
The present spread from last week to this week in the face of a .50 basis point decrease in the 10 Year is unbelievable.
At this point I am asking everyone I am talking to to wait and I will update them down the road.

[Conundrum]

nothing is rigged. .

You mean to tell me special interest groups and lobby money doesn’t influence policy which impacts the economy? And that big money isn’t making more big money? My comment was tongue in cheek but yeah, I’m sure we’re truly operating in a free market with no tax advantages or policies benefitting one group over another.

[mattig]

You mean to tell me special interest groups and lobby money doesn’t influence policy which impacts the economy? And that big money isn’t making more big money? My comment was tongue in cheek but yeah, I’m sure we’re truly operating in a free market with no tax advantages or policies benefitting one group over another.

Sorry I misread that then. Sounds like we agree resoundingly. One of my favorite rants, actually.

[4matic]

For sure bond market locking up. BOND is the PIMCO total return etf and it's mostly treasury with some beta built in with a 5 year duration. It's getting hammered today after getting hammered yesterday. Down another 1%

[Brock Landers]

The difference between a true “core” portfolio and pimco total return.

[liv2ski]

This explanation makes sense, so it may take awhile for rates to comeback down to a normal spread with Treasuries.

by: Matthew Graham
Mortgage Rates Rising at Fastest Pace in Years

Mar 11 2020, 4:46PM

Mortgage rates continued a relentless surge higher today. The move began in earnest yesterday for two key reasons: bond market panic and mortgage market over-supply. If you take nothing else away from the following, the important part to understand is that rates are absolutely significantly higher than they were this morning, yesterday, and on Monday morning. The pace of that move has been the fastest since the 2 days following the 2016 presidential election, and one of only a handful of 2-day periods with more than a 3/8ths bump to the conventional 30yr fixed rate.

The bond market panic is the logical ingredient. Rates--especially those in US 10yr Treasuries, which do NOT directly translate to the mortgage market--fell precipitously to new all-time lows as of Monday morning. They've since bounced fairly hard. Although the bonds that underlie mortgage rates weren't able to keep up with the move in Treasuries, they were generally moving in the same direction until that reversal. Since then, they've been forced back toward weaker levels.

But it's really not the mortgage-backed-securities market that poses the key issue for mortgage rates right now. It's the mortgage market's over-supply. Like anything else, a rampant excess of supply puts downward pressure on prices. When we're talking about bonds or mortgages, lower prices mean higher rates and it's really that simple. The investors that ultimately buy the mortgage debt create by new refinances have been so overwhelmed with the available supply on the market that sellers have desperately lowered prices in order to find buyers. And again, lower prices on mortgage debt mean higher rates for consumers.

As an example of just how intense the ramp in supply has been, consider that today's report on new refinance applications showed the biggest week-over-week jump... EVER! And I guarantee you Monday's volume of new business was every bit as high as the busiest day from last week.

Will this end? Yes. But it will take time. There are also 2 parts to the equation. Volatility is one consideration. The sooner the underlying bond market finds a narrower trading range, the easier it will be for the mortgage market to begin settling down. The other consideration is the outright level of rates and new business. This is already in the process of taking care of itself. To be sure, once lenders have slowed down due to the massively higher rates, they'll lower margins as much as the price of mortgage bonds allows in order to drive new business. Either way, we're not talking about quick fixes.

[4matic]

Who would want to loan money non recourse right now? You have to get some risk premium.

[4matic]

Got mail from my big CU today. They underwrite their own loans. Pretty good all considered.

New Rates Effective today 03/12/2020.
30YR & 20YR Conforming: 3.375%
15YR & 10YR Conforming: 2.750%
30YR FR Jumbo Portfolio: 3.500%

[mattig]

This explanation makes sense, so it may take awhile for rates to comeback down to a normal spread with Treasuries.

by: Matthew Graham
Mortgage Rates Rising at Fastest Pace in Years

Mar 11 2020, 4:46PM

Mortgage rates continued a relentless surge higher today. The move began in earnest yesterday for two key reasons: bond market panic and mortgage market over-supply. If you take nothing else away from the following, the important part to understand is that rates are absolutely significantly higher than they were this morning, yesterday, and on Monday morning. The pace of that move has been the fastest since the 2 days following the 2016 presidential election, and one of only a handful of 2-day periods with more than a 3/8ths bump to the conventional 30yr fixed rate.

The bond market panic is the logical ingredient. Rates--especially those in US 10yr Treasuries, which do NOT directly translate to the mortgage market--fell precipitously to new all-time lows as of Monday morning. They've since bounced fairly hard. Although the bonds that underlie mortgage rates weren't able to keep up with the move in Treasuries, they were generally moving in the same direction until that reversal. Since then, they've been forced back toward weaker levels.

But it's really not the mortgage-backed-securities market that poses the key issue for mortgage rates right now. It's the mortgage market's over-supply. Like anything else, a rampant excess of supply puts downward pressure on prices. When we're talking about bonds or mortgages, lower prices mean higher rates and it's really that simple. The investors that ultimately buy the mortgage debt create by new refinances have been so overwhelmed with the available supply on the market that sellers have desperately lowered prices in order to find buyers. And again, lower prices on mortgage debt mean higher rates for consumers.

As an example of just how intense the ramp in supply has been, consider that today's report on new refinance applications showed the biggest week-over-week jump... EVER! And I guarantee you Monday's volume of new business was every bit as high as the busiest day from last week.

Will this end? Yes. But it will take time. There are also 2 parts to the equation. Volatility is one consideration. The sooner the underlying bond market finds a narrower trading range, the easier it will be for the mortgage market to begin settling down. The other consideration is the outright level of rates and new business. This is already in the process of taking care of itself. To be sure, once lenders have slowed down due to the massively higher rates, they'll lower margins as much as the price of mortgage bonds allows in order to drive new business. Either way, we're not talking about quick fixes.

Hey, the JONG who writes that shit would always appreciate a link if you're going to paste it in full in a forum.

Here's the new one

https://housingbrief.com/article/5e6...7eae194022246e

Or


http://www.mortgagenewsdaily.com/con...es/938641.aspx

[Brock Landers]

^^^haha saw your name at the top of the article and was like- he knows who that is right?

Is there a mailing list I can get on? I read every fucking thing out there, and yours is among the most readable for a subject that sometimes blows (no offense)

[huckbucket]

Hey, the JONG who writes that shit would always appreciate a link if you're going to paste it in full in a forum.

Here's the new one

https://housingbrief.com/article/5e6...7eae194022246e

Or


http://www.mortgagenewsdaily.com/con...es/938641.aspx

^^
Fucking classic. Good for you Matt!

[liv2ski]

Rates today are .375% higher on average than they were on 3/4/2020. I priced out a few loans with a $600k value, $350k loan amount, SFR, O/O, rate and term refi with a 760+ score.
15 year was 2.875% and a 30 year was 3.375% with a credit of $2,500 back towards the fees. Such BS. If any CA mags need a loan pm me, as my pipeline will be funded in the next two weeks.

[evdog]

What do you see happening with rates in that time frame? I had held off hoping rates would drop a bit more from last week or two.

[liv2ski]

I hope they improve, as I had a few clients with credit surprises that couldn't lock in immediately and now we are all hoping they come back down again. So far I have batted a 100% on getting 30 day locks closed on time, but now all my investors tell me to take a 45 day lock, so that bumps the pricing a hair too.

[mattig]

No urgency now. Biggest weekly rate spike in history, Monday morning to Friday afternoon. Perfect time to get set up to lock and target a rate you want with standing lock instructions if it's hit. This is about as easy as the lock/float decision ever gets.

Updated newsletter today: https://housingbrief.com/article/5e6...7eae194022246e

[XXX-er]

https://www.cbc.ca/news/business/ban..._xxxtoZ67xFOZI

big cuts up here due to Covid-19

[mattig]

Not sure how it works in Canada, but Central Bank rate cuts only impact home equity credit lines here (even though everyone, including people that pass for experts, seems to think otherwise). Can't count the number of times we've seen the Fed cut rates only for mortgage rates to move higher or vice versa.

[Garbowski]

Perfect time to get set up to lock and target a rate you want with standing lock instructions if it's hit.

How does one go about doing that? Just having a good agent/broker? I understand there’s lots of minor details, but I’d love to say lock me in if you can do it at 3% and cost me less than 1k or whatever.

[XXX-er]

Up here the central bank rate also affects the mortgage rates so they will go down if the prime rates goes down eh

you cant write off the interest on money borrowed to buy a principal res ( which I understand you can do in USA ?) so there is no point in borrowing mo money to have a bigger tax write off

you don't pay capitol gains on the profits when you sell your house ( duno how that affects you down there ? )

between rail shutdowns and the oil going thru the floor its been a tough go up here so there was just a rate cut on march 4 and now there is this emergency cut

Because of that don't think the banks are completely up to date on rates but here are Current interest rates at Tangerine bank

5 Year. Variable Mortgage. 2.65%
1 Year. Fixed Mortgage. 3.39%
2 Year. Fixed Mortgage. 2.39%
3 Year. Fixed Mortgage. 2.19%
4 Year. Fixed Mortgage. 2.49%
5 Year. Fixed Mortgage. 2.39%
7 Year. Fixed Mortgage. 2.69%
10 Year. Fixed Mortgage. 2.79%

current ^^ posted rates at the bank where I would have a mortgage if I still had a mortgage, an online bank ( used to be ING) that always seems to have the best rates

[liv2ski]

My CA clients complete the on-line application and email in their supporting docs. Once the market gets to their target price, I lock the loan. I am sure other companies do the same thing. I am killing Zillow quotes right now, but the market has a ways to improve to get back to March 1st levels.

[Brock Landers]

What, ultimately is the Zillow quote? Some broker that paid Zillow to get their name out or linked to the platform? Or is Zillow explicitly in the mortgage game?

[liv2ski]

Fucking Zillows platform use to be great for the consumer, as little guys like me could afford to advertise on it. In 2018 they called us and said the minimum monthly ad buy had to be $25k Fuck! If I was paying that much I would need 10 L.O.'s working for me to handle all the leads and I don't want that.

Needless to say, now that only the big guys are on the platform, there is price fixing in my opinion to allow them all to quote in the same highly marked up ballpark. I am smokin the lenders on Zillow at this time. In a normal market I am usually .25% better than the best there.

O and ya, now Zillow has their own lending platform on there too. How fucked up is that for their advertisers?