Morning Report: Mortgage credit continues to tighten

Vital Statistics:


Last Change
S&P futures 3170 3.1
Oil (WTI) 40.84 0.21
10 year government bond yield 0.65%
30 year fixed rate mortgage 3.12%


Stocks are higher this morning on no real news. Bonds and MBS continue to ratchet higher.


Initial jobless claims fell by 99k to 1.314 million. Despite the improvement in the economy, many retailers who were struggling before the COVID crisis are still cutting jobs.


Despite the improvement in the housing market and the mortgage market, credit availability fell again in June, according to the Mortgage Bankers Association Mortgage Credit Availability Index. “Mortgage credit supply dropped again in June, as investors further reduced their willingness to purchase jumbo loans and those with lower credit scores,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Lenders are navigating a gradual economic and housing market recovery that is still facing headwinds from the ongoing COVID-19 pandemic. Credit supply has fallen over 30 percent since February – before the pandemic – with an 18 percent decrease in government loan availability, and a 57 percent drop in jumbo loan availability.” We will need to see the securitization market turn on before we get a meaningful return to jumbo and non-QM. Low FICO FHA will probably have to wait until forbearance ends.


Fed Head James Bullard sees unemployment dropping down into the 7% – 8% range in 2020.

29 Responses

    • Like

      • lol


        • I’ve been meaning to ask: are you still overseas? How is that going?


        • Mich:

          Yeah…sitting in Wimbledon as we speak. My contract lasts until October 2021. Going OK so far, although since I’ve been working from home for the last 3 months, I might just as well have been sitting in the US. Could easily have done that.

          Dumped the place in Connecticut and bought a house down in North Carolina, so I’ve been travelling back there whenever I go back to the US. My kids are holed up there now, since their schools have shut down.

          Liked by 1 person

        • Glad to hear that all of you are okay!

          FWIW, my personal prediction is that any university that opens for students in the fall will be shut back down by Halloween. I’ve been advising all of my students to take GenEd requirements this next semester.


        • We just opened up the option for parents to select whether they want their students (PK-12) to do traditional school or virtual. It will be interesting to see what the bulk of the responses are. Right now, with .0001% responding, it’s overwhelmingly virtual.

          I’ve gotten used to working at home. Definitely positives about going into the office but I’m adjusting to doing everything over teams. It works. Not sure why information work really requires an office at all.


        • KW:

          It will be interesting to see what the bulk of the responses are.

          It will be. Please keep us updated, as I am interested.


        • I’ll let you know. Since the vast majority of our students are urban . . . it’s just hard to guess. They may be prone to want to stay virtual, but at the same time we have a lot of single-mothers–but there’s often a non-working older sibling, aunt, or grandmother that can stay with minor children while the parent goes to work. The student population is predominantly black, then Hispanic/Muslim/Indian, then white, then Asian. And the district has already asked that all the students be reported on by race so apparently that’s import to know as well.

          We will be handing out 95k laptops/tablets and 24k wi-fi hotspots for Internet access. We already have insufficient IT staff for supporting the district, so that’s going to be interesting.

          We will be analyzing lost/stolen/broken, but what are we going to do when 1 student has their device stolen 5 times? That I don’t know.


        • Mich:

          FWIW, my personal prediction is that any university that opens for students in the fall will be shut back down by Halloween.

          A lot of schools are ditching any October break and trying to end the semester by Thanksgiving. G’Town has an idiotic plan, which I am dealing with right now. Wish I was a lawyer, as I would sue the school.

          You may be right that schools will close by Halloween. But more interestingly, how many deaths by covid per 100k students do you predict among university students that are allowed back on campus? I predict that more students will be killed driving to campus than will be killed by covid.


        • Scott–

          The semester is being materially changed in order to keep students on campus: Morgan, for instance, is opening almost three weeks later than usual (the Wednesday after Labor Day) and ending all on-campus teaching the day before Thanksgiving. The rest of the semester will be done remotely/online.

          Each campus is going to be different when it comes to coronavirus exposure; urban ones (again, like Morgan) have inherent risks with travel to/from campus on public transportation. More residential ones won’t have that risk. But ALL of them are going to have the risk that students are not going to physical distance themselves once they’re on campus–it’s just unrealistic to think that they will. That’s why I’m betting all campuses shut down.

          Per 100K? My money is on 10.


        • Mich:

          Per 100K? My money is on 10.

          Really? That is currently what it is for the entire population of Texas including nursing homes! I’ll take the under on that one.

          You are probably right about campus shut downs, though. Admins will panic when the first case hits a campus. Of course, they won’t be discounting tuition, though.


    • The more the cancelers turn on each other, the fewer people there are going to be to do the cancelling. And what happens when the remaining cancellers are all in a significant minority?


    • The silence on this from the Vox site itself is impressive. They can’t report on this issue, even though it’s trending since it’s internal to them.

      Same way that Erik Wemple at the Washington Post can’t report on their doxing of a party guest to save Tom Toles, where if it had happened at any other publication he’d have been all over it.

      Liked by 1 person

  1. Hey, NoVA:

    One of my students has been working with BroadStreet on their covid-19 data mining/mapping project since March. Their aim is to collect and compare data from the states on coronavirus testing and reporting–it has been really interesting for her looking at all 50 states and, for the last two months or so, concentrating on the southeast. She and some of the other interns have pulled together a short (about two pages) template proposal for the governors of Maryland and Virginia, and DC’s mayor about reporting the data.

    I mentioned to her that I know a guy who’s an expert on healthcare lobbying. . .

    Would you be willing to look at their proposal and give them some advice on how to sell it? This is their intro:

    Since the winter of 2020, The COVID-19 Data Project by BroadStreet has collected daily numbers of COVID-19 cases and deaths from states and their counties. We have noticed a disturbing pattern:

    States are not reporting data for COVID-19 in a standardized process.

    Having reliable data is crucial in decision-making processes, especially in times of Public Health emergencies such as the pandemic in which we are currently. In these situations, officials need to know what is happening within their jurisdiction. This is achievable if they are given accurate information.

    Many people want to help find solutions. Infectious disease epidemiologists, researchers, and citizen scientists in The United States and around the world are willing and eager to help. Time is wasted if it is spent finding, assembling, and trouble-shooting missing and inconsistent data and methodologies. This leads to delays, and even inaccuracies, of critical information such as establishing true incidence, prevalence, and mortality rates. Ultimately, good data and clear, published methods would enable us to track the spread of the COVID-19 virus across the nation and to be proactive in creating effective strategies and policies.

    All communication would be just between you and me; I’d pass any suggestions on to Nashae.


    • Michigoose: That’s awesome! My primary … consternation … since we started getting reportage on numbers of tests, cases, and deaths was there was no indication that there was a standardized process, that the processes were the same everywhere and what they were. Given that there may have also been incentives to report one way over another, in the absence of clear (and maybe audited) standards it seemed to me there would be both incentives distorting data–as well as just people making up their own standards for reporting. Not to mention different testing methods.

      While it’s not worth anything to you or your students, I love this proposal!


      • I’ve been taking a course on epidemiology from Johns Hopkins this last few months; what has bothered me from the beginning is your consternation. There are a number of CDC protocols on reporting that aren’t being followed (for whatever reason[s]). It’s. . . concerning.

        I’m glad that someone not involved thinks it’s worth pursuing–thanks!!


        • So how is it that CDC protocols aren’t followed? No oversight (I can see why that would be difficult) or requirements for internal auditing and then reporting (doing federal reports myself, I know how often even that requirement doesn’t ensure good data). Or just lack of resources and time to check and double-check the numbers?

          Anyway, good on you and your students!


        • In the case of Georgia and Florida (particularly bad) I suspect politics. In other cases I suspect just not enough people at the local (state and lower) level.

          It’s also possible that there are not enough people at CDC itself to keep up with the reporting; I was working with a student on her thesis in the spring, and she was noting that there were a bunch of CDC reports that hadn’t been updated in two – three years. Turns out that (at that time, I haven’t looked recently) the CDC had over 700 positions that were unfilled.

          FWIW, I strongly suspect that that lack of people played a large role in their non-response and bungled response at the beginning of the pandemic.

          Liked by 1 person

    • sure thing. sounds fun.


  2. When victimhood is the currency of the realm, expect counterfeiters


    • Indeed. And it’s a specific kind of currency, which is why hate crimes trumpeted by celebrities and the news media almost always turn out to be hoaxes. There are real hate crimes, but rarely do any of them have the exciting edge or clear-thread-to-blaming-Trump that get them elevated to national attention. While victimhood may be currency of the realm, it’s the attention and power the forging of a certain kind of hate crime that makes so many hoaxes. And if the *media* would stop incentivizing the hoaxes, I think the hoaxes would go away. People aren’t creating these hoaxes to just file a police report and then have it done with. Well, except for some of the insurance fraud.

      But name me a broadly reported and breathlessly covered hate crime that–if resolved–turned out to be real. I can’t think of one in the past decade.


  3. This is interesting:

    So half of Oklahoma is an Indian Reservation now?

    That’s gotta impact Oklahoma’s tax base? Or just with Native Americans–so mostly jurisdiction and where crime can be prosecuted, presumably only in federal court.


  4. Tim Pool’s comments on Oklahoma:


Be kind, show respect, and all will be right with the world.

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