Higher Rates Easing Credit in Mortgage Market

Vital Statistics:

	Last	Change	Percent
S&P Futures	1755.5	-9.6	-0.54%
Eurostoxx Index	3006.0	-28.7	-0.95%
Oil (WTI)	93.31	0.3	0.29%
LIBOR	0.241	0.001	0.56%
US Dollar Index (DXY)	81.15	-0.041	-0.05%
10 Year Govt Bond Yield	2.73%	-0.04%
Current Coupon Ginnie Mae TBA	105.2	0.2
Current Coupon Fannie Mae TBA	104.2	0.3
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.51

Markets are lower after Atlanta Fed President Dennis Lockhart said a paring of U.S. bond purchases could very well take place next month. Bonds and MBS are up; however.

Mortgage Applications fell 1.8% last week, with purchases down .5% and refis down 2.3%. We had a huge move in rates last week, but it took place on Friday. This week's numbers will probably be horrendous.

Mortgage Credit Availability increased slightly in October, according to the Mortgage Bankers Association. On one hand, some lenders increased lowered their FICO floor, but others restricted cash-out refis. The net effect was a slight increase in credit availability. FWIW, given the end of the refi boom, it looks like bankers realize they have to go our further on the credit curve. Redwood Trust announced on its conference call that it is diversifying away from strictly high quality jumbos and will look at the non-QM space. 

Tri-Pointe Homes reported better than expected sales and earnings, and took up full year guidance. They are buying Weyerhaeuser's home building unit as well. We are starting to see more M&A in the homebuilding space.

Transunion reported that the national average for 60 day delinquencies is 4.09%. The worst states are the judicial states, while the best are the northern mountain / midwest states. They have a cool interactive map where you can see DQ rates by state.

Brent Nyitray, CFA

Director of Capital Markets

iDirect Home Loans

National Asset Direct

Dellacamera Capital Management

1010 Washington Blvd, 6th Floor

Stamford, CT 06901

203-817-3614 (w)

917-841-4938 (c)