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The term "sideways" may be slightly misleading as FNCL 4.5's are actually a tick better, now up to 101-27. 10yr notes are holding under 3.5 event though stocks look to have put an end to their losing ways with the S&P at 1315. Today is one of those days where you'll want to wait until close to lock cut off if you haven't seen any reprices for the better as they are likely on the way.

Bonds really appear to be settling in to some lower volatility trading. They really don't have much of a choice as stocks are flat-out rotten today (S&P at 1314) yet bonds can't condone a facemelter, which would effectively ignore some logical pivots and resistance levels. 10's are currently paying respects to just such a level near 3.50. FNCL 4.5's have their own glass ceiling around 101-25 which separates the best few days of recent trading from everything else (2/25-28 and 3/1-2). The big volume is in for the day, and so in the big picture, it's a winner for MBS. We might see prices and yields fluctuate this afternoon but the bigger questions will be answered in the week to come. Stay tuned for an impending MBS Commentary post with some thoughts and charts on current technically significant trends. Other than that, we'll keep you posted on any movements big enough to warrant a change in lender pricing. For now, reprices for the better have ruled the day, and if you haven't seen one already, you probably will.

FNCL 4.5's have ticked up to a new high on the day, now 16 ticks up at 101-24. 10yr notes continue to face resistance from 3.50, but are a mere 11 thousandths of a percent away at 3.5011. Stocks are at their lows of the day with the S&P at 1317. There is no more scheduled data today. Reprices for the better continue to stream in, and bonds look to have a winning day locked in at this point.

We've seen a few of the earlier priced lenders release reprices for the better as MBS continue to hold gains. FNCL 4.5's are up 14 ticks on the day at 101-22, very near their best levels (101-23). 10yr yields, as a benchmark for the broader bond market suggest some resistance is in play at these highs as they're having a hard time cracking into the 3.49's. Current levels are at 3.514, but the tenor overall this morning has been positive.

Compass Analytics released some thoughts on how compensation changes impact secondary marketing managers and the production of rate sheets. "...The concern that Secondary Marketing Managers (SMM's) wouldn't be able to charge different margins or loan level price adjusters based on a loans attributes and a borrower's credit and occupancy information under the new regulations. Although the law states that originator compensation cannot vary based on a loans terms and rates, Mortgage Banks and their Secondary Marketing departments don't fall under the definition of "originator", but are rather considered "creditors" under the new legislation. The generally accepted definition of "creditor" typically allows for the inclusion of Mortgage Banks funding loans through a warehouse line of credit as well. Because loan level price adjustments are charged by investors and are then passed down to the borrower, these should not have any impact on originator compensation. Additionally, falling under the definition of "creditor" allows SMM's to vary their level of base/corporate margin across different loan program, rates and terms in ways in which Loan Officers and Brokers cannot." In addition, rate sheets will become more complex. "Under the new regulations, originators choosing a borrower paid compensation structure will indicate their desired level of margin and Secondary Marketing will produce a finished product for borrowers, which includes the appropriate originator margin adjustment...the need to centralize locking through a single lock desk has increased greatly." And keep an eye on pullthrough and extensions - pullthrough may actually increase since originators are no longer able to be compensated by both the originator and the borrower under the new rules, and a certain percentage of renegotiations in the past involved helping the loan originator.