Morning Report: Uptick in delinquencies 8/6/13

Posted on August 6, 2013 by Brent Nyitray

Vital Statistics:

  Last Change Percent
S&P Futures  1700.7 -1.8 -0.11%
Eurostoxx Index 2811.4 2.4 0.08%
Oil (WTI) 107 0.5 0.44%
LIBOR 0.266 0.001 0.38%
US Dollar Index (DXY) 81.74 -0.138 -0.17%
10 Year Govt Bond Yield 2.63% 0.00%  
Current Coupon Ginnie Mae TBA 104.6 0.0  
Current Coupon Fannie Mae TBA 103.9 0.0  
RPX Composite Real Estate Index 200.7 -0.2  
BankRate 30 Year Fixed Rate Mortgage 4.37    

 

Markets are flattish on no real news. This week is relatively data-light. Bonds and MBS are flat.
 
Mortgage delinquencies rose 10% month over month in June, according to Lender Processing Services, breaking a downtrend that has lasted since late last year. 700,000 people who made their May payment missed their June payment. Is this a blip or the start of a new trend? Interesting fact regarding geography – Non-current inventory is still close to peak levels in New York State (only down 5%). By contrast, California is down 59%, Arizona is down 66% and Nevada is down 47%. This explains why Northeast real estate prices are still bumping along the bottom of the bathtub while the Southwest is not. 
 
Home prices increased 11.9% year-over-year, according to CoreLogic. According to chief economist Dr. Mark Fleming: “In the first six months of 2013, the U.S. housing market appreciated a remarkable 10%. This trend in home price gains is at the best pace since 1977.” They are forecasting prices to increase 12.5% in July. You can see what markets are hot and what markets are not below:
 

 
There were some interesting observations out of mortgage REIT Invesco Mortgage Captial (IVR). They noted that spreads have widened on agency paper and believe there is good value here. They are taking the view that the spread widening is temporary and was due to a perfect storm of REIT de-leveraging, mutual fund outflows and dealers clearing inventory for quarter’s end. What does this mean to us? That mortgage rates have room to fall, even if the 10 year bond doesn’t move.

 

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11 Responses

  1. ScottC's avatar
    ScottC, on August 6, 2013 at 7:13 am said:

    Apparently Jeff Bezos’ wife asked him to pick up a newspaper while he was out yesterday.

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  2. yellojkt's avatar
    yellojkt, on August 6, 2013 at 7:35 am said:

    WaPo is pocket change to Bezos. I see the purchase as a status symbol, like owning a sports team. Only a lot cheaper.

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  3. Brent Nyitray's avatar
    Brent Nyitray, on August 6, 2013 at 8:04 am said:

    What is Bezos going to do with the non-voting stock that trades publicly? The market cap is 4.5 billion.

    I wonder if the publicly traded stock has to be treated pari with the voting stock.

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  4. lmsinca's avatar
    lmsinca, on August 6, 2013 at 8:55 am said:

    Haha, Booman has some “sage” advice for Bezos.

    I have some fairly simple advice for Jeff Bezos. Fire all of upper management and the entire editorial board and all its contributors. Keep your bloggers, since they are providing the best opinion content that the Washington Post produces, but get rid of Krauthammer and Will and Ignatius and Cohen and Thiessen and Gerson and Parker. Don’t even stop with the right-wing hacks. Let Eugene Robinson and Colbert King and E.J. Dionne find new work, too. Just clean house.

    What you need is intelligence, freshness, energy, and (most of all) irreverence. If you follow my advice, you will absolutely appall Washington society, which will cause them to read your paper more religiously than they have ever read it before. The best writing about Washington has always been done by people who don’t spend much time there and don’t give a shit about hurt feelings, access to sources, or invitations to the next big happening in town. The problem with the Post is that everyone who works there seems afraid to label the elites of Washington as the shit-heels that they are. Anything that might hurt Sally Quinn’s feelings is muted. Everyone has to pretend that David Broder isn’t (wasn’t) a senile gas-bag. Enough!

    The only good moment the press has had in DC in the last decade was when, at the White House Correspondents Dinner a few years ago, Stephen Colbert held up a mirror to their faces and they were forced to recoil in horror.

    Off with all their careers!

    And honesty. If you discover that a columnist is consistently dishonest, stop publishing them. If this means that you can’t find a right-leaning columnist to publish, so be it. Make your creed “no bullshit.” Tell your editors that you’ll be calling them for an explanation if you find one obviously bad-faith distortion of fact in any columns. Don’t facilitate the spin-wars in any way. If you discover that reality has a strong left-wing bias, don’t worry about it. The more the right hates you, the more they’ll link to your articles.

    Go young. Young people know how to use the internet and their worldview is by definition the cutting edge. Anyone old enough to vote when the Iraq War started who wasn’t calling bullshit should be suspect. Anyone complicit in any way with the Bush administration should be gone. Start over. Fresh.

    Come in and take a dump on everyone and everything. Your papers will sell like hotcakes and you’ll be doing something truly patriotic.

    Also, buy CNN and follow the same recipe.

    Quoted in full.

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  5. yellojkt's avatar
    yellojkt, on August 6, 2013 at 9:42 am said:

    More jackbooted thugs and their arbitrary liberty-denying zoning rules force a well-meaning citizen to take a Second Amendment solution to protect his property.

    http://www.washingtonpost.com/national/2-people-shot-dead-at-northeastern-pa-municipal-building-meeting-3-hurt-gunman-in-custody/2013/08/05/55b73cda-fe30-11e2-8294-0ee5075b840d_story.html

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  7. jnc4p's avatar
    jnc4p, on August 6, 2013 at 9:47 am said:

    Yep, when push came to shove on reforming the housing market nothing changed:

    “Obama to insist market provides 30-year mortgages
    By Zachary A. Goldfarb,
    Published: August 5

    President Obama on Tuesday will for the first time insist that any future housing system in the United States makes 30-year mortgages widely available to borrowers, senior administration officials said, preserving a linchpin of the American economy but also continuing to expose taxpayers to risk from another housing meltdown.

    Obama previously called for the end of Fannie Mae and Freddie Mac, the mortgage finance giants that have helped ensure the availability of 30-year mortgages for generations. He has not said, however, what system should replace Fannie and Freddie — and that raised concerns that the 30-year mortgage might disappear, because banks have been unwilling to lend for such a duration without a government guarantee.”

    http://www.washingtonpost.com/business/economy/obama-to-insist-market-provides-30-year-mortgages/2013/08/05/62ee17c0-fe08-11e2-bd97-676ec24f1f3f_story.html?tid=pm_business_pop

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  8. Let the mutherfuker burn!'s avatar
    Troll McWingnut or George, whichever, on August 6, 2013 at 10:32 am said:

    Don’t forget, this is the only person being punished for Clinton’s Bengazi fuck up.

    http://dailycaller.com/2013/08/05/imprisoned-innocence-of-muslims-producer-nakoula-nakoula-i-want-the-world-to-see-the-truth/

    Is he a political prisoner? Should he pursue Second Amendment solutions?

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  9. Let the mutherfuker burn!'s avatar
    Troll McWingnut or George, whichever, on August 6, 2013 at 10:39 am said:

    Well, in defense of Obama, the ongoing depression has been very good for him, Democrats and believers in governmental involvement in every aspect of our lives. Why wouldn’t those whom believe in the benefits of an expansive government desire another crisis? Seriously?

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