“The mortgage servicing industry lacked accountability and transparency when this crisis started,” said Treasury Assistant Secretary for Financial Stability Tim Massad. “Publishing these servicer assessments is key to our efforts to hold servicers publicly accountable for their performance and keep necessary pressure on them to improve. We've seen movement in the right direction, and we will keep this up so that the industry continues to change its ways.”

-JPMorgan Chase Remains in Need of Substantial Improvement in Latest Administration Servicer Assessment, Faces Potential Permanent Reduction in Financial Incentives under Making Home Affordable Program

-Administration Continues to Withhold Financial Incentives from JPMorgan Chase and Bank of America

In and of themselves, prices of front-month MBS ("front-month" meaning the most current delivery month, in this case, the December coupons that are currently in their settlement process for Fannie and Freddie 30yr's) are doing amazingly well. But by the time prices seemingly drop to reflect January coupons (after the close tomorrow), we'd currently be looking at 102-05 on a Fannie 3.5 instead of the current 102-14.

Beyond that, buyers across the fixed-income world are lopsidedly outnumbering sellers, especially in MBS. Lenders aren't in a big hurry to get any new locks in the door given the past several days of rallying and the fact that they've already originated quite a lot today of new MBS today given the gains. Not much incentive to lower rates when buyers are already lined up for MBS.

That said, some lenders might reprice, just don't expect to see as many rate sheet improvements as you would outside of the MBS settlement cycle. The broader lopsided demand for fixed-income today merely compounds the issue.

Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, delivered the following opening statement today at a hearing to review legislation to reform the secondary mortgage market:

“Today, the subcommittee is holding a second legislative hearing on the Private Mortgage Market Investment Act. This subcommittee held a hearing on the bill on November 3rd. Since then, I have been actively reaching out to and working with regulators, market participants, and other members on this committee to make improvements to the bill. I understand this is a complex issue and I welcome another opportunity to hear from the public on the merits of the bill.

The positive trend channel that Fannie 3.5's have held today has been impressive to say the least. They're currently up a quarter of a point at 102-12, simply reveling in the stalwart nature of benchmarks. To wit, 10yr yields have cut a meager 3bp range all morning and less than a 1bp range since 1045am.

One of your friendly neighborhood "early-to-act" lenders has already repriced for the better. It's indeed possible that others would follow if current levels are maintained or improved upon, but we'd expect fewer lenders to get involved than normal due to the impending Class A Settlement (Fannie and Freddie 30yr fixed MBS notification day tomorrow, prices will seemingly "drop" tomorrow night as January coupons become the new front month).

Survey Highlights

• Twenty-two percent of respondents expect home prices to increase over the next year (up 3 percentage points since last month), while 22 percent say they expect home prices to decline, down 1 percentage point since last month. 53 percent say prices will stay the same, a 2 percentage point drop from October.
• Thirty-three percent of Americans say that mortgage rates will go up over the next 12 months, down 3 percentage points from October and a return to the level seen in September.
• Sixty-eight percent of respondents say it is a good time to buy a home (down by 1 percentage point since last month), and just 10 percent say it is a good time to sell, which is unchanged from the previous two months.
• On average, Americans expect home rental prices to increase by 3.2 percent over the next year, a 0.1 percent decrease from October.
• Just 6 percent expect a decline in home rental prices (unchanged since last month), while 41 percent of respondents believe that home rental prices will increase in the next 12 months.
• Thirty-two percent of Americans say they would rent their next home, while 63 percent say they would buy, down 3 percentage points since last month and a return to the level seen in September.

David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA) testified today before the House Financial Services Subcommittee on Capital Markets and the Government Sponsored Enterprises at a hearing on The Private Mortgage Market Investment Act."