Don’t steal packages off of porches… you never know what will be inside them… A very low-tech attempt at dissuading thieves. On the flip side, what do Signal, iMessage, and WhatsApp, used by some originators in communicating with borrowers, have in common? Apparently, per the FBI, they’re “encrypted” and have much more security than simple texts… Worth thinking about using rather than plain texts. Speaking of tech, of great interest to lenders and vendors in general, these days, most popular TV models utilize automatic content recognition (ACR), a form of ad surveillance technology that gathers information about everything you watch and transmits it to a centralized database. Manufacturers then use your data to identify your viewing preferences, enabling them to deliver highly targeted ads. Here’s how to stop it. (Today’s podcast can be found here and Richey May is sponsoring this week’s. Richey May’s consulting, cybersecurity, business intelligence, and automation services are designed by mortgage experts to help you continue to drive growth and increase profitability. Hear an interview with Rate’s Ben Cohen on some tips and tricks on what has helped to consistently make him a top-five originator in America by both file count and dollar volume.) Lender and Broker Software, Services, and Products What were the greatest challenges for loan originators this year? What tactics did they use to find success? Which trends affected them the most? Get the answers to these questions and more in the latest Loan Originators Survey Report from MGIC and Loan Officer Hub. 1,000 originators shared their insights on marketing, social media, referral relationships, technology and more. Download the 2024 report to get valuable insights you can use in your own planning for 2025!

Jobless Claims 

224k vs 215k f’cast, 213k prev

Continued Claims

1871k vs 1910k f’cast, 1896k prev

At first glance, the 224k figure in jobless claims may seem like a moderately positive thing for bonds, but our ongoing chart of non-seasonally adjusted data shows that it’s a bit misleading.  This was actually the lowest claims reading on a non-adjusted basis than any of the other years in our comparison.

In other words, zero signs of labor market weakness in this particular data and thus no surprise to see bonds moving back up a bit.

Mortgage trade groups have vowed to reintroduce the trigger leads bill next year.

Paul Atkins, a noted critic of the Consumer Financial Protection Bureau, will join the Financial Stability Oversight Council, where he will play a role in shaping housing policy.

The Federal Reserve chair is not concerned about President-elect Trump nominating his successor well in advance of the end of his term in 2026, saying he is “confident” he will have a productive relationship with the next Treasury Secretary.

The development marks another step in eNote adoption at government housing agencies following an announcement allowing commingled Ginnie Mae securitized pools earlier this year.

Rep. French Hill, R-Ark. — one of the leading contenders to chair the House Financial Services Committee next year — focused on ‘debanking’ of crypto and other companies in his questions to the witnesses.

No Whammies From Powell as Rates Rally on ISM Data

Bonds came away from this morning’s economic data with a tailwind that helped turn losses into gains.  The ISM Services PMI was the biggest contributor.  In addition to headline PMI being much weaker than expected, the employment index was also lower than last month, and the price index was unchanged. The only thing bonds had left to fear on the day was Powell’s afternoon Q&A, but there were no surprises and, thus, no reaction in rates.  Lenders were free to reprice for the better if they hadn’t done so before Powell.  Despite the gains, trading levels continue hitting the same resistance marked by 10yr Treasury yields just under 4.20%.

Econ Data / Events

ADP Employment

146k vs 150k f’cast, 233k prev

S&P Services PMI

56.1 vs 57.0 f’cast, 55.0 prev

ISM Services

52.1  vs 55.5 f’cast, 56.0 prev

Market Movement Recap

08:23 AM Moderately weaker overnight and little-changed after ADP data. MBS down 6 ticks (.19) and 10yr up 5bps at 4.273

10:03 AM MBS up to “unchanged” after the ISM data.  10yr up 1.6bps at 4.24.  MBS outperforming due to strength in the short end of the yield curve (i.e. 2yr yields are down 0.8bps on the day).

12:12 PM stronger still… MBS up an eighth and 10yr down 2.8bps at 4.196

03:02 PM Steady near best levels.  MBS up 5 ticks (.16) and 10yr down 4.1bps at 4.183

Mortgage lenders generally try to avoid setting rates more than once per day, but they will make changes if the underlying bond market is moving enough.  Mortgage Backed Securities (MBS) are the bonds that directly dictate mortgage rate movement.  When they’re stronger/higher, it implies downward pressure on rates and vice versa. MBS started the day in weaker territory, which is why the average lender started the day by offering just slightly higher rates compared to yesterday’s latest levels.  But MBS improved with the rest of the bond market after the morning’s economic data was released. When MBS improved enough, many lenders revised their rates slightly lower than yesterday’s latest levels. Technically, the average lender is at the lowest levels in over a month, but there’s been very little change in the average since last Friday.  The following chart of MBS may help explain why.  Keep in mind that the higher the blue line is, the better it is for rates.  The red line shows the central tendency of the past few days of movement.  Bottom line, despite the ups and downs, MBS have been reasonably flat this week.