MBS Recap: Slowest Day of Year


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1:05PM  : 
TSY Resistance Limits MBS Gains, But Positive Reprices Possible!
Current MBS gains are sufficient to see lenders repricing for the better. But this is due to a slow and rather meaningless slog upward as opposed to a triumphant, data-driven, high volume rally. The stock lever is no longer connected as Treasuries show their willingness to trade recent ranges ahead of FOMC. Recent yield lows in 10yr notes center on 3.36 and that’s where we’ve seen a majority of resistance today, especially when considering volume, as the only noticeable upswing occurred at those levels. 10’s are currently at 3.63 and seem like they want us to believe they’re not especially interested in going lower. FNCL 4.5’s, at 102-10 are as high as they’ve been since 3/21 and share a similar stance, in that the obvious assumption is to encounter resistance here. If 10’s are able to break lower, MBS stand a good chance to break higher, but until/unless that happens, we’re simply in a low-volume range-trade in a market that knows it has more important things to worry about than today’s levels as the week progresses. In other words, don’t read anything into today’s market movements as far as making some sort of statement about the directional inclinations of bond markets.

12:18PM  : 
Multifamily and Commercial Lending Up 44% in 2010
(Mortgage Bankers Association) – Commercial and multifamily mortgage origination volumes increased 44 percent in 2010 over the previous year, with mortgage bankers reporting $118.8 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association’s 2010 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation. “Coming off of the 2009 lows, commercial and multifamily originations increased by a strong 44 percent in 2010,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. “Low interest rates coupled with improving economic fundamentals have the potential to draw out even more borrowers in 2011.”
Fannie Mae, Freddie Mac and FHA, collectively, were the largest investor group in 2010, responsible for $42.8 billion of the total, followed closely by life insurance companies and pension funds at $30.6 billion. In terms of property types, multifamily properties saw the highest volume, $48.9 billion, followed by office properties with $22.6 billion of originations. First liens accounted for 92 percent of the total dollar volume closed. Lending for office properties had the largest percentage increase in originations by property type, followed closely by hotel/motel properties and retail. Year-over-year changes are based on the changes in volume among “repeat reporters” that participated in both the 2009 and 2010 surveys.

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