We have yet to perform a thorough analysis on loan pricing this week. Now seems like a good time...
Day over day, on average, rebate is 11.9bps better vs. rate sheets issued yesterday (after AM reprices). The majority of pricing improvements were passed along in the lower note rates, specifically those securitized into 4.0 MBS coupons. Yay bull flattener.
Right now two lenders are going in the opposite direction as the other three majors. Those two lenders are better on a week over week basis and have both made 4.25% more "do-able" for well-qualified consumers. Borrowing costs are generally 0.125 to 0.25% higher at the other three pigs. I should mention those three lenders were priced super aggressive last Friday and are still priced super aggressive today, just not as super as last week. Basically, the best rates of all time are still availalbe, you just have to find the lenders offering them. Everyone takes a turn at "buying the market"....
On a week over week basis, buydowns are cheaper in the "record low" side of the note rate stack. All of the majors still offer 4.25%. Some even offer 4.00% but that is gonna require at least 2 points to close.
Once again, the lack of liquidity in 3.5 MBS coupons is illustrated by the expensive cost to buydown a rate from 4.375 to 4.25%.
About $2.5 in supply has been offered in the TBA market today, concentrated in FNCL 4.0s. Trading flows have been busy for a summer Friday. The October FNCL 4.0 is -0-05 at 102-12, near the session lows. Spreads are wider vs. 5pm "going out" marks.
Question for Secondary Managers: How has fallout been? Lock traffic was clearly busy this week. Are you gonna have to buy back an old hedge? The notional increase in rates we've seen this week had to help your pipeline.
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