Posts Tagged ‘stock market’

Bruce Howard with Landover Mortgage: Daily Market Commentary – May 5th 2009

Tuesday, May 5th, 2009

landover_01In a widely circulated story, Barack Obama was apparently misquoted. Leading publications state that he said, “Wait a minute now, I didn’t authorize attacks on the Pirates, I authorized a tax on the pirates.”

GMAC Financial Services reported a first quarter 2009 net loss of $675 million, compared to a net loss of $589 million in the first quarter of 2008. They attributed the losses to “continued pressure in mortgage operations related to valuation adjustments on mortgage servicing assets, weaker credit performance on both auto and mortgage assets, mark-to-market adjustments on derivatives, and an original issue discount related to the fourth quarter debt exchange.” In similar fashion, Radian Group (the #2 mortgage insurer) posted a first-quarter loss of $217 million, hurt by unrealized loss on derivatives and continued increase in mortgage-insurance defaults.

Back to the markets! As long as the Federal Reserve Bank of New York keeps buying agency MBS’s, everything is ok, right? Let’s hope so, since they continue to be the dominant buyer by far. Last week they had “net purchases” of $23.1 billion, gross purchases of $59.6 billion. 97% of purchase activity is limited to 4.0% and 4.5% MBS’s, which typically encompass 4.25-5.125% mortgages – and only 7% of the securities are Ginnies comprised of FHA and VA loans.

Yesterday we had some good economic news, and the markets moved accordingly. Pending Home Sales rose 3.2%, and the Housing Affordability Index remained near record highs – certainly much higher than it was a year ago. Construction Spending was +.3% in March, which is the first increase in six months. Yes, most of it was increases in commercial and government projects, but we’ll take what we can get. Today we have the small issue of selling $35 billion in 3-yr Treasury notes, which may keep rates a little high in spite of the market being technically oversold. Currently the 3-yr yield is 1.39%, the 10-yr is 3.15%, and mortgage prices are better by .125-.250. Bernanke’s testimony had little impact on MBS prices.


Bruce Howard / Landover Mortgage Daily Market Commentary – May 4th 2009

Monday, May 4th, 2009

bruce1Before we launch into the plethora of investor updates, let’s take a look at the market. With the absence of any bond-market news, the focus continues to be on stocks. Asian stocks rallied last night back to levels last seen in October. To many, in spite of the poor earnings results by many companies, it would appear that investors don’t want to miss out on a rally, and seem to be putting cash to work in the stock market. From last week, the Michigan Consumer Sentiment Index rose for the second straight gain, from 57.3 in March. Today we have Construction Spending and Pending Home Sales. Tomorrow the ISM Services number, Thursday our old friend Jobless Claims, and then on Friday we can get fired up about all of the Unemployment data. Hourly Earnings are expected to be up .2%, Nonfarm Payrolls -663,000, and the Unemployment Rate expected around 8.5%. The results of the government’s stress tests for 19 large financial institutions will be released on Thursday. We also have the Treasury selling over $70 billion in securities Tuesday-Thursday, which is weighing on the bond market. 10-yr is at 3.14% and mortgage prices are a shade better than Friday afternoon.


Fannie Mae came out with the details on their new mortgage loan data requirements. ”Fannie Mae has issued Announcement 09-11: Mortgage Loan Data Requirements. To comply with Federal Housing Finance Agency (FHFA) requirements, Fannie Mae will now be requiring loan origination identifiers and appraiser data elements for mortgage loan applications dated on or after January 1, 2010. This Announcement provides detail on the following: The Secure and Fair Enforcement Mortgage Licensing Act (S.A.F.E. Act) requires all states to implement a system to license and register mortgage loan originators. The Nationwide Mortgage Licensing System and Registry (NMLS) has been developed to implement the S.A.F.E Act. The NMLS will issue unique identifiers for loan originators and loan origination companies. Updates to the 2000-Character Loan Delivery Files – To support the requirements referenced above, Fannie Mae has updated our 2000-Character File Format and 2000-Character File Format Field Definitions documents with fields for the loan originator’s unique identifier, loan company’s unique identifier, appraiser’s state license number, and supervisory appraiser’s state license number. Updates to the Uniform Residential Loan Application (Form 1003) – Form 1003 will be updated shortly to capture the identification for both the loan originator and the loan originator company. We are working with Freddie Mac on changes to this joint Fannie Mae / Freddie Mac form, and additional information will be forthcoming. Form 1003 already includes fields for the capture of the other required identifiers.”