What
is the Willis Tower? I don't know, but the $1.3 billion Sears Tower,
complete with a $775 million loan, was sold to Blackstone. The WSJ reports
that the property backs a $775 million loan of which several pieces were
securitized in commercial mortgage-backed securities. The building has more
than 3.75 million square feet of office space and is the second tallest
office building in the United States, after One World Trade Center in downtown
Manhattan. The property faced large tenant leasing and capital costs in the
first quarter of 2014. Subsequently, the loan was transferred into special
servicing after the borrower expressed concern about the capital required to
keep the property fully funded. The loan could be defeased and a special
servicing workout fee likely when the loan pays off. Currently with two years
to maturity (20 months till open) and a 6.27% coupon, it is unclear whether
Blackstone will assume the loan or defease it.
Hey,
who is more likely to go into foreclosure, a conforming conventional
borrower or a jumbo borrower?
While
we're talking about big money, Ginnie Mae has added HMBS Enhanced Monthly Pool
and Loan Level Disclosure Layout revisions. To view its disclosure, click here.
And
not to be outdone, Fannie updated its LLPA matrices. "This Notice
announces that Fannie Mae has updated the pricing guidelines in the Loan-Level Price Adjustment (LLPA) Matrix and Adverse Market
Delivery Charge (AMDC) Information and the Refi Plus™ Mortgages Only Loan-Level Price Adjustment (LLPA)
Matrix and Adverse Market Delivery Charge (AMDC) Information
matrices to reflect the policy change that pertains to how loan-level price
adjustments are applied to mortgage loans with more than one borrower,
specifically when one borrower has a credit score and one or more borrowers do
not have credit scores."
Also
not to be outdone, Freddie Mac released Bulletin 2015-3 which announced changes
that "enhance our modification options and expand borrower eligibility
using our loss mitigation toolkit. All changes are effective for new
evaluations conducted on or after July 1, 2015, but you're encouraged to
implement them immediately." Freddie's Bulletin addressed Step-Rate
Mortgages ("Offering borrowers with Step-Rate Mortgages the
opportunity for an earlier modification with our Freddie Mac Streamlined
Modification - Streamlined Modification; adding a new eligible hardship to our
Freddie Mac Standard Modification - Standard Modification.) Imminent
Default Hardship test. There are plenty of other thrilling details - please
read Guide Bulletin
2015-3 for more details on these changes and for additional updates.
So
Freddie is asking its servicers to change certain loans "to reduce the
risk of re-defaults as scheduled interest rate adjustments under the HAMP
program begin." As a reminder, under HAMP rates on modified mortgages
fixed for 5 years, then increase in steps by as much as 1% a year until matching
the market rate when HAMP modification took effect. The bulletin above directs
servicers to start evaluating HAMP borrowers on July 1 for streamlined
modification if they become 60 days delinquent within 12 months after rate
increase, and borrowers facing imminent default as a result of increases should
also be considered for modifications.
And
let's not forget that a couple weeks ago the Rural Housing Service proposed
a Rule amending the Single Family Housing Guaranteed Loan Program. The
Rural Housing Service (RHS) has proposed a rule, amending the current
regulation for the Single Family Housing Guaranteed Loan Program. The RHS
seeks to expand its lender indemnification authority, allow lenders to reduce
principal balances (in some cases), revise its interest rate refinance
requirements, and to amend its regulation to indicate that a loan guaranteed by
the RHS is a Qualified Mortgage if it meets certain requirements set out by the
CFPB. Comments on the rule must be received by May 4, 2015.
Speaking of agency news, the FHFA (overseer of Freddie & Fannie) released its Progress Report on the initiatives outlined in its 2014 Strategic Plan and 2014 Conservatorship Scorecard for Fannie Mae and Freddie Mac (the GSEs). The Progress Report is a summary of the work undertaken in furtherance of FHFA's key goals for the GSEs, including issues MBA has championed, such as clarifying lenders' liability under the GSE representation & warranty framework, reducing the number and severity of the GSEs' assessments of compensatory fees, increasing the amount of credit-risk that is transferred to the private market, and pursuing "front-end" risk-sharing transactions, and develop a single security that can be fungible for TBA delivery to increase overall liquidity.
Let's
keep going with some random program and lender changes that have been announced
over the last several weeks.
First,
a correction on some New Penn Financial program notes. Its Home Key
product is for borrowers who've experienced a credit event; it is not a credit
repair product.
JPMorgan
announced that it is buying $45 billion
in servicing from Ocwen. Chase's production is down and wants those 277,000
loans, and it would bring its servicing portfolio to roughly $1 trillion (still
behind Wells' $1.75 trillion). And, let's face it, Ocwen is shrinking and wants
the ducats.
A while back Angel Oak Wholesale began
offering a mini- correspondent program for eligible parties. Angel Oak
Mortgage Solutions, specializes in non-agency lending, with a focus on
non-prime loans, announced that its non-agency mortgage products are now
available to third party lenders through a mini-correspondent channel. The
platform provides affiliated lenders with the opportunity to offer Angel Oak
Mortgage Solutions' non-agency products in their respective lenders' name.
Flagstar posted information
regarding the new rural area eligibility maps that become effective on February
2 for purchase transactions under the GRHDoc. #5830 program.
As a reminder, refinance transactions do not require the property to be in an
area currently defined as rural by Rural Development. Therefore only purchase
transactions are affected by the new maps. Also, updates have been made to its
Early Loan Payoff policy which will now feature a graduated calculation based
on duration and product. This new policy will be applied to all loans which
payoff on or after February 1, 2015.
Rates:
up a little, down a little. Yesterday they continued downward after a very weak
housing start number for the month of February. The press is talking about how
traders and investors were hesitant to position ahead of today's Fed statement
and press conference. The focus is on whether or not the word
"patient" appears in the FOMC statement. Really? With countries
struggling around the world, people engaged in violent conflicts, huge currency
fluctuations... watching for the word "patient" is what it's all
about?
The
war of words between Greece's government and Euro group & German officials
continued. Greece feels that it has sacrificed given the austerity plan, and
highlights the gains to the European core. Germany and others have benefited
from exchange and interest rates that are lower than they would have faced had
they still had their own currencies.
But
since this is mortgage and economic commentary, returning to yesterday Housing
Starts fell 17.0% in February although the January number was revised higher.
That was a surprise but analysts quickly attributed it to record snowfall in
the Northeast and extreme cold in the Midwest. But the West didn't do its part:
high-than-average temperatures should have compensated for some of the decline
in other regions, but housing starts fell 18.2% in the West. February Building
Permits, however, beat estimates. And let's not forget that West Texas
Intermediate Crude (WTI) made a new 6-year low Tuesday - don't forget the
impact falling oil prices have on certain states and oil-related businesses!
This
morning we've had the MBA's application numbers from last week: apps dropped
4%, refis fell 5%, and purchases fell 2%. Not great news for April and
May...
Executive Rate
Market Report:
A solid open this morning
in the bond and mortgage markets; US stock indexes started weaker; ahead of this afternoon’s
long awaited FOMC meeting that has ground the word patience into dust. Most
investors and traders as well as the media (including ourselves) have been
mesmerized with ‘patience’, it’s time to remove it so it isn’t the word of the
month. Get rid of ‘patience’, please. Removing that word is supposed to signal
a rate increase in June, we don’t agree; removing it likely will be replaced
with another phrase or word that is likely to keep markets guessing. One trader
this morning with tongue in cheek ventured the FOMC would remove patience and
re-enter ‘considerable period of time’ that was the previous buzz phrase.
Yellen won’t ignore the
soft economy, jobs are welcome but this year so far the economy is slowing
based on the high majority of reports that confirm the economy has slowed. Dec,
Jan, and Feb retail sales declined; was it weather, or the lack of internet
sales in the monthly reports, or the collapse of oil prices; or the sum of all
of those? Industrial production and factory use has slipped recently, there is
absolutely no wage pressures the Fed can point to. Inflation is not increasing
but declining. From my advantage point there is little reason for the Fed to
move now. Why now? Because in the past the Fed has been behind the curve in
terms of moving more rapidly in changing monetary direction, so the thinking is
that Yellen won’t make that mistake. Look for extreme market volatility this
afternoon beginning at 2:00 pm.
The only data this
morning, the weekly MBA mortgage applications. Overall apps dropped
again, -3.9%; purchases down 2.0%, re-financing -5.0%. Rates moved lower in the
week with the average 30-year mortgage for conforming loans ($417,000 or less)
down 2 basis points to 3.99%. Most believe that the housing market will gain
momentum now that weather is improving. An anticipated increase in the FF rates
will also increase mortgage rates, if the recent fractional increase in rates
has slowed sales and re-fis has dampened the sector, a 25 bp increase in
mortgage rates certainly has to be a worry point.
Crude oil is declining once
more, this morning a new six year low. Commodity prices are going to follow crude lower as they did a
few months ago when oil prices were falling daily. If Obama’s negotiations with
Iran lead to relaxed sanctions Iran’s first move would be increasing oil
exports; the country needs any monies it can get.
At 9:30 the DJIA opened -77,
NASDAQ -13, S&P -7. 10 yr at 9:30 at 2.02% -4 bps, 30 yr MBS price +11 bp
frm yesterday’s close and +11 bps frm 9:30 yesterday.
The drop in the rate on
the 10 this morning has broken the bearish technical pattern; now trading below its
100, 40, and 20 day averages and the momentum oscillators have turned slightly
positive. Any other day we would take it seriously but with the FOMC and Yellen
this afternoon we will withhold our enthusiasm for now. Not only the FOMC and
Yellen this afternoon, the Fed will also release its quarterly economic
outlook; a lot to absorb in a few minutes so expect increased volatility frm
2:00 to 3:30 this afternoon.
PRICES @ 10:00 AM
10 yr note: +7/32 (22 bp)
2.03% -3 bp
5 yr note: +2/32 (6 bp)
1.54% -1 bp
2 Yr note: unch 0.67% unch
30 yr bond: +17/32 (53 bp)
2.58% -3 bp
Libor Rates: 1 mo; 0.177%;
3 mo; 0.270%; 6 mo; 0.401%; 1 yr 0.713%
30 yr FNMA 3.0 Apr: @9:30
101.50 +11 bp (+11 bp frm 9:30 yesterday)
15 yr FNMA 3.0 Apr: @9:30
104.22 +1 bp (+10 bp frm 9:30 yesterday)
30 yr GNMA 3.0 Apr: @9:30 102.55
+9 bp (+10 bp frm 9:30 yesterday)
Dollar/Yen: 121.18 -0.19
yen
Dollar/Euro: $1.0599
+$0.0002
Gold: $1147.40 -$0.80
Crude Oil: $42.35 -$1.11
DJIA: 17,770.46 -78.62
NASDAQ: 4926.46 -10.97
S&P 500: 2068.23 -6.05
http://globalhomefinance.blogspot.com
No comments:
Post a Comment