Morning Report 7/20/12

Vital Statistics:

  Last Change Percent
S&P Futures  1362.1 -9.8 -0.71%
Eurostoxx Index 2258.5 -44.0 -1.91%
Oil (WTI) 90.8 -1.9 -2.01%
LIBOR 0.452 -0.001 -0.22%
US Dollar Index (DXY) 83.29 0.408 0.49%
10 Year Govt Bond Yield 1.46% -0.05%  
RPX Composite Real Estate Index 184.8 0.0  

Equity markets are weaker this morning in spite of a deal to rescue the Spanish banks and decent earnings reports out of Google and GE.  There is no economic data to speak of.  Bonds are up a point and MBS are up as well.

Bloomberg has a good article discussing the state of the mortgage industry and how much capacity has been drained from it. “Efforts by Obama and Bernake to help homeowners get cheaper loans and spur the economy have been slowed by lack of staff at lenders and less competition.” Fears of buyback risk are also making lenders more cautious. 

SIFMA (which oversees the To-Be-Announced mortgage securities) weighs in on the eminent domain issue. They are instituting a policy that would exclude municipalities that institute eminent domain claims on mortgages from the TBA market.  Without getting into the gory details, the TBA market is the way newly originated mortgages get packaged into Fannie / Freddie / Ginnie mortgage backed securities. Punch line:  It will be very difficult to get a mortgage in San Bernardino because the lender will have a tougher time disposing of the loan.  I am surprised at how little interest the press has shown regarding this issue. 

No MR for the next week – I will be on vacation.

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