First off, the market expected a shutdown resolution by mid November and especially since this past weekend.  That’s the reason today’s news means essentially nothing in terms of being a surprise headline.  On the data front, today is also meaningless in the short term. It’s not as if the backlog of econ data will suddenly be released. The only exception is the September jobs report, which could still be released this week since it was largely ready to go before the shutdown. As for the initial reaction in bonds, it’s been modestly weaker, as expected, but not weak enough to offset yesterday’s gains so far.

In news underwriters will need to know, banks and satirists across the United States are taking Director Bill Pulte’s and President Donald Trump’s 50-year mortgage suggestion are running with it. They (the underwriters) would now require an applicant’s grandkids to co-sign on a 50-year mortgage “just in case” as part of the approval equation. What happens when you leave out a key part of the equation? (Skip ahead to the two-minute mark for another chuckle.) The IT staffs of lenders and vendors are always on guard not to leave out any part of any equation, and they may have some interest in this: ClickFix may be the biggest security threat your family has never heard of, as it is a relatively new technique that can bypass many endpoint protections. (Don’t confuse it with Click n’ Close, a fine company in the correspondent & wholesale space! (Today’s podcast can be found here and this week’s is sponsored by TransUnion. Mortgage lenders choose TransUnion for their identity-focused, data-driven mortgage insights and solutions, enabling them to achieve more desirable lending outcomes in a volatile housing market. Hear an interview with MeridianLink’s JP Kelly on how evolving credit scoring models, real-time analytics, and data integration are reshaping mortgage lending, from improving credit inclusivity and compliance to accelerating decision-making and redefining competition in a data-driven marketplace.) Services, Products, Software, and Tools for Lenders and Brokers

A Georgia resident filed the suit after receiving two unsolicited calls from the lender in October even though her number appeared on the Do Not Call registry.

The lawsuit targets Zillow Flex, in which participating agents must meet Zillow Home Loans pre-approval quotas to maintain access to high quality leads.

The government shutdown added an additional dose of pessimism about the U.S. economy to panelists’ outlooks, Wolters Kluwer said in its latest survey.

The Consumer Financial Protection Bureau, building on an executive order by President Trump, wants to eliminate the legal framework of “disparate impact” from its implementation of the Equal Credit Opportunity Act.

The Treasury secretary highlighted the impacts the bond market has on affordability and previewed regulatory tweaks the administration is eyeing to keep yields stable and credit flowing.

Its dog eat dog in the ranks of the FHFA and Fannie Mae & Freddie Mac. The question is, does anyone care, or is anyone surprised? We want to follow the law, right? Everyone knows that the Trump Administration fired the Inspector General and Fannie’s ethics staff. Now the Wall Street Journal reports that, “Fannie Mae Watchdogs Probed How Pulte Obtained Mortgage Records of Key Democrats… FHFA’s acting inspector general handed probe report to U.S. attorney office that had indicted New York Attorney General Letitia James.” “Fannie Mae watchdogs who were removed from their jobs had been probing if Trump appointee Bill Pulte had improperly obtained mortgage records of key Democratic officials, including New York Attorney General Letitia James, according to people familiar with the matter.” Speaking of Bill Pulte and his staff, recently notable for the 50-year mortgage equation, now President Trump is back tracking on extending loan amortization past QM guidelines. The lack of affordability is a result of many things, and everyone in the industry knows that amortization terms are not high on the list. (Today’s podcast can be found here and this week’s is sponsored by TransUnion. Mortgage lenders choose TransUnion for their identity-focused, data-driven mortgage insights and solutions, enabling them to achieve more desirable lending outcomes in a volatile housing market. Hear an interview with TransUnion’s Satyan Merchant on how credit data is evolving from a static score to a dynamic, predictive asset, and what lenders can do right now to turn this wave of disruption into opportunity.)

Mortgage rates are based on bond market movement and bonds are much stronger today compared to Monday. Although bonds were closed yesterday for the Veterans Day holiday, there was an important piece of economic data that suggested lower rates today. The data in question was the new weekly payroll count from ADP. Whereas October’s monthly data (which came out last week) suggested 42k new jobs created, yesterday’s weekly data showed an 11k DECREASE in the payroll count.  Decreases are uncommon outside recessions and recessions tend to push interest rates lower. The average lender moved down to the lowest levels since October 31st, but just barely. The typical correlation between bonds and mortgages suggested a slightly bigger move.

Bonds Look Past 10yr Auction to Maintain Focus on Jobs

While there were no big ticket economic reports on today’s calendar, bonds came into the session with a tailwind from yesterday’s weekly ADP payrolls data. Unlike the monthly numbers seen in last week’s monthly ADP report (which showed a +42k increase in payrolls), yesterday’s weekly numbers showed an 11k decline so far in November. Treasury futures (not closed for the holiday) reacted clearly and immediately. As a result, 10yr yields opened nearly 5bps lower this morning and managed to hold those gains throughout the session. Traders had almost no regard for the slightly soft results in the 10yr Treasury auction at 1pm ET with most of the day’s ebbs and flows lining up with stock market volatility instead.

Econ Data / Events

ADP Weekly Payrolls (Tue, 11/11)

-11k 

Market Movement Recap

09:05 AM Stronger over the holiday, exclusively in response to ADP weekly jobs numbers.  MBS up 10 ticks (.31) and 10yr down 4.4bps at 4.077

11:57 AM Still generally flat, but at best levels of the day. MBS up 11 ticks (.34) and 10yr down 6.3bps at 4.059

01:26 PM Slightly weak 10yr auction and a bit of selling after the fact.  10yr still down 5.9bps at 4.064.  MBS up 10 ticks (.31).

03:44 PM Still sideways. MBS up 11 ticks (.34) and 10yr down 5.4bps at 4.068