MBS Live: MBS Afternoon Market Summary
On the standard issue 2-day charts, MBS and Treasuries look to have experienced a rather volatile day.  Indeed it was volatile day within the scope of this week, but against a slightly longer-term backdrop, things were actually quite stable.  Fannie 3.5's moved in less than a quarter of a point range, spending most of the day between 105-00 and 105-06.  Fannie 3.0's moved between 102-22 and 102-16, just barely dipping below there in late day, illiquid trading conditions prompting a few negative reprices.
MBS Pricing Snapshot
Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.
FNMA 3.5
105-00 : -0-06
FNMA 4.0
106-12 : -0-05
FNMA 4.5
107-07 : -0-04
FNMA 5.0
108-07 : -0-03
GNMA 3.5
106-24 : -0-08
GNMA 4.0
109-04 : -0-06
GNMA 4.5
109-11 : -0-05
GNMA 5.0
110-02 : -0-03
FHLMC 3.5
104-25 : -0-06
FHLMC 4.0
106-03 : -0-05
FHLMC 4.5
106-25 : -0-03
FHLMC 5.0
107-15 : -0-03
Pricing as of 4:06 PM EST
Afternoon Reprice Alerts and Updates
Below is a recap of instant Reprice Alerts and updates issued via email and text alert to MBS Live subscribers this afternoon.
3:15PM  :  ALERT ISSUED: Post-Treasury Close Volatility Working Against MBS For Now
No major changes here, but minor ones carrying MBS to worst levels of the day (admittedly only a tick off the previous lows) and slightly increasing the negative reprice outlook yet again. This volatility could shake out without MBS getting any worse as it could just be some standard-issue choppiness surrounding the 3pm Treasury close. Fannie 3.0's have held 102-14 for several minutes now without going any lower. Fannie 3.5's are at 104-32+. The more they bounce back, the more reprice risk ebbs, vice versa if the selling resumes.
2:21PM  :  ALERT ISSUED: Slightly Increased Risks Of Negative Reprices, But Narrow Range Helps
A bit of pressure this afternoon on bond markets as stocks break higher from previous resistance. Volume is low all around and 10's/MBS initially gave a bit of chase to the stock breakout, but seem to be finding their footing.

For 10's that's just under 1.63 and for MBS, closer to the lows of the day--102-17 in Fannie 3.0's and 105-02 in Fannie 3.5's. That does introduce some slightly negative reprice risk, but less than the visual on the charts might suggest due to the narrowness of the broader range and the fact that rate sheets were coming out around the lows this morning. Muted risk doesn't mean non-existent though, so "know thy lender," and stay tuned for further stock market gains putting additional pressure on bond markets.
12:28PM  :  ALERT ISSUED: Volatility Working Both Ways. MBS Lose Half Their Gains
After moving somewhat swiftly from their two day lows to two day highs in the space of 2 hours, MBS have lost half those gain in the space of about 20 minutes. Fannie 3.0's are down 4 ticks on the day at 102-19, as are 3.5's at 105-03. 10yr yields moved up from 1.61 to 1.633. The bounce looks to be mostly attributable to a simple technical bounce in equities and the Euro just after 11:00am. Everything picked up steam after the European close, but thus far looks fairly well-contained. Reprice risk depends on time frames of initial rate sheets, but isn't overly likely considering that we haven't lost more than 4 ticks since the latest rate sheets of the day.
Live Chat Featured Comments
A recap of the featured comments from the MBS Live Dashboard's Live Chat feature, utilized by hundreds of industry professionals each day.
Matthew Graham  :  "REPRICE: 4:06 PM - Franklin American Worse"
Rob Clark  :  "REPRICE: 3:53 PM - Provident Funding Worse"
Matt Hodges  :  "REPRICE: 2:22 PM - Suntrust Worse"
MMNJ  :  "$300K 1st and $50K 2nd, $300K is new loan. Not too difficult to figure out"
MMNJ  :  "I just asked my UW your scenario.....she told me she had two words for me and they are not "happy birthday" and to stop talking nonsense.....rate & term all day long"
Brayden Alexander  :  "MMNJ, if listing 2 liens on the HUD, and 1 is a non purchase money 2nd, who is to say which part opf the funds pay off which lien? To me the funds are mixed at disbursement. "
Aaron Buyside Meyer  :  "their new loan will be exactly the payoff on their existing 1st mtg, because I am paying their closing costs w/ the overage. The new Mtg will be for the payoff of the existing 1st mtg and that is it"
MMNJ  :  "i would understand that logic IF the mortgage amount of the new loan was >$2,000 more than the current mortgage + closing costs + prepaids"
Brayden Alexander  :  "I understand the logic in calling it a C/O if listed on the HUD though."
Ken Crute  :  "what dave says goes with out saying then part B would be assume there is a misunderstanding spell out what you want accomplish clearly, email her, if she still sticks to her response call the UW boss "
MMNJ  :  "2nd not used to purchase (CES or HELOC) is cash out if going FNMA / FHLMC"
MMNJ  :  "even if closed end, if it was not used to buy the house AND this is not an FHA loan then isn't it cash out regardless?"
MMNJ  :  "2nd paid @ closing = no problem (we actually prefer it that way)"
Aaron Buyside Meyer  :  "that's exactly what I asked for and they said no, keep in mind the title company said fine, but UW said no. "
Ken Crute  :  "can't he close on the refi and bring funds to closing to pay off the 2nd, let the attorny forward payoff? "
Aaron Buyside Meyer  :  "you have funds w/ pay off being paid in full, how is that old 2nd slipping into 1st position?"
Matt Hodges  :  "why would a lender close on that before 2nd is paid? you put new first into 2nd position"
Aaron Buyside Meyer  :  "UW common sense ?: I ahve aborrower who is paying off his second mtg w/ his own funds because it exceeds the value of the home. All of those proceeds are his own liquid funds. I cannot close the first which will be at 95% LTV and he is getting no cash back from until I have the satisfaction for the 2nd mortgage. Why can't I close and let title remit his 2nd mtg payment in full next week?"
Brent Borcherding  :  "REUTERS: German chancellor Angela Merkel has said at a coalition party meeting that Europe will not have shared total liability for debt as long as she lives"
LSP  :  "REPRICE: 11:44 AM - Franklin American Better"
Brent Borcherding  :  "Good video in the news stream earlier with, David Rosenberg. Big fan and he has some very solid thoughts on what lies ahead, and puts most everything in a very good context. About 15 minutes, but worth it."
Matthew Graham  :  "RTRS- S&P SAYS BASELINE U.S. FORECAST A SLOW RECOVERY FROM THE JUNE 2009 RECESSION TROUGH "
Matthew Graham  :  "RTRS - S&P SAYS IT ESTIMATES ODDS OF U.S. DOUBLE DIP TO BE 20 PERCENT "
Matthew Graham  :  "RTRS- S&P REPORT SAYS SLOW U.S. RECOVERY LIKELY, BUT CRUEL SUMMER POSSIBLE "
Matthew Graham  :  "hefty take-down by the fed"
Matthew Graham  :  "RTRS - DEALERS SUBMITTED $8.31 BLN OF TREASURIES FOR CONSIDERATION IN FED PURCHASE -NY FED "
Matthew Graham  :  "RTRS- FED BOUGHT $4.65 BILLION OF TREASURIES MATURING BETWEEN AUG 2020 AND MAY 2022 -NY FED "
Read what our user's have to say about MBS Live on LinkedIn.
» Start a two week free trial of MBS Live.