MBS RECAP: 6/20/2011


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FNMA 3.5
96-20 : -0-04

FNMA 4.0
100-22 : -0-01

FNMA 4.5
103-26 : -0-01

FNMA 5.0
106-12 : +0-02

GNMA 3.5
97-29 : -0-04

GNMA 4.0
102-10 : -0-02

GNMA 4.5
105-21 : -0-02

GNMA 5.0
108-05 : +0-04

96-15 : -0-03

100-20 : -0-01

103-22 : -0-01

106-07 : +0-01

Pricing as of 3:58 PM EST

3:45PM  : 
The Day Ahead: Existing Home Sales
The events calendar is once again thin tomorrow. We do however get an update on home sales data at 10AM. The pace of Existing Home Sales is set to decline in May after an unexpected 0.8% drop in April, which left the pace at its lowest since February. This decline is expected to be steeper: the consensus looks for a 6% downturn to an annualized pace of 4.75 million units. With sales already down nearly 13% from last year, a rebound isn’t looking likely until June. The Pending Home Sales Index, which anticipates this index by looking at contracts that have been signed but not finalized, fell 11.6% in April. That alone implies a double-digit percentage drop in May, yet mortgage applications to buy homes were only 2% lower in May, implying a smaller sales decline, according to IHS Global Insight. “The wild card is how active investors were in the market during the month,” they said. “Our projection is that existing home sales will drop about 6% in May to a 4.75 million rate, with investors playing a slightly larger role in May than in April.” OTHER THAN THAT….Since restructuring government leadership positions largely failed to improve national sentiment surrounding new spending cuts, Greek Prime Minister George Papandreou is now seeking government approval to enact his own austerity plan through a “vote of confidence”, which will be taken on Tuesday night in Greece. Failing to agree on tough spending cuts would lead market participants to believe the Greeks are not serious about making long-term concessions to pay back their debt. This would be seen as a negative influence on stocks and a positive influence on mortgage rates.

12:22PM  : 
Mortgage Exec to Serve 8 Years in TBW Fraud Case
(Reuters) – A former bank executive who served as the go-between for Taylor, Bean Whitaker Mortgage Corp, which collapsed from a $2.9 billion fraud scheme, was sentenced on Friday to eight years in federal prison. Catherine Kissick, 50, who was the head of Colonial Bank’s mortgage warehouse lending division, pleaded guilty in March to one count of conspiracy to commit bank, securities and wire fraud. She received the longest prison sentence so far related to the TBW investigation. Kissick was the primary contact point for TBW’s chairman, Lee Farkas, and helped devise plans that enabled the mortgage institution to sell loans that did not exist or had already been sold to other banks or investors. Colonial Bank ended up advancing money to TBW for the loans. They came up with the scheme to help address constant overdrafts by TBW which resulted from massive losses by the firm, according to prosecutors. While Kissick knew that their actions were fraudulent, she testified they continued out of fear that it would be detected. However, she sought to secure additional collateral from TBW in a bid to minimize the bank’s exposure, prosecutors said. “She was fully aware that her actions were fraudulent and she worked closely with Farkas in carrying out the fraud scheme,” prosecutors said in their sentencing recommendation to District Judge Leonie Brinkema. She had faced up to 30 years in prison. Prosecutors had recommended that she be sentenced to 11 years in prison. Also sentenced was one of Kissick’s assistants, Teresa Kelly, who worked at Colonial Bank as an operations supervisor and processed many of the transactions of fake mortgage sales. She was sentenced to three months in prison, followed by nine months of house arrest.

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