The manufactured home loan lender, a unit of Berkshire Hathaway subsidiary Clayton Homes, was accused of ignoring red flags that sent many borrowers into bankruptcy, default and ultimately out of their homes.

Analysts agree recent changes to government agreements will end the Fannie Mae and Freddie Mac conservatorships, but it’ll likely happen later rather than sooner.

The leading homebuilder trade group was joined by a consortium of state attorneys’ general in the filing, alleging higher costs to both its members and potential buyers of new units.

In his letter of resignation, Federal Reserve Vice Chair for Supervision Michael Barr said an attempt by the Trump White House to remove him could create a “distraction” for the Fed. He plans to retain his seat on the Board of Governors, which expires in 2032.

It is right around now that people give up saying “Happy New Year” to others, mostly because they’ve lost track to whom they’ve said it. Welcome back to a 5-day workweek, despite storm severity increasing, the first since mid-December. Oh, and happy 45²! Yes, 2025 = 45² is a “perfect square” year, and is represented by the square of the sum of all the digits: (0 + 1 + 2 + 3 + 4 + 5 + 6 + 7 + 8 + 9)² = 2025. It also represents the sum of the cubes of all the digits: 0³ + 1³ + 2³ + 3³ + 4³ + 5³ + 6³ + 7³ + 8³ + 9³ = 2025. Continuing on in the “fun with numbers” vein, be careful who you focus on in the real estate agent world. Now that 2024 is over with, a good question is “How many deals did you close last year?” If you ask, “How was 2024?” you might hear “Fine” with the agent closed no deals. If you go back to 2023, nearly half of real estate agents sold 0-1 house! We’re still waiting on the 2024 stats, but it doesn’t make a lot of sense to spend time catering to an agent that isn’t doing any business. (Today’s podcast can be found here and this week’s is sponsored by CoreLogic. CoreLogic is giving mortgage professionals the tools they need to establish long-term relationships with their clients, helping them keep future business in-house and transforming the way they do business. Today’s has an interview with Freedom Mortgage’s Stan Middleman on his multi-decade career in the mortgage industry and how to maintain success regardless of market conditions.) Correspondent and Wholesale Non-Agency Products

The bond market and interest rates have arrived at the first full week of the new year almost exactly where they left off before the X-mas/New Year holiday weeks.  There was a small amount of underlying volatility in bonds today, but not enough to translate into volatility for mortgage rates.  This kept the average lender near 7.125% for a top tier conventional 30yr fixed rate. Although the past 2 weeks have been uneventful for rates, the next 2 weeks will be heavily influenced by incoming economic data.  There are several honorable mentions over the next few days before getting to this week’s headliner on Friday: the jobs report.  The data between now and Friday is certainly capable of causing movement in either direction, but the jobs report is capable of causing much MORE movement.  In all cases, bigger volatility requires a bigger deviation from the market’s expectations. Where do expectations come from? Hundreds of economists/analysts submit or publish forecasts for most of the regularly-scheduled economic data.  The median of those forecasts is then published as a consensus–effectively THE forecast.  In general, if the data suggests the economy is weaker or inflation is lower versus the forecast, it’s good for rates.  

Small Scale Volatility as Bonds Wait For Jobs Report

Bonds lost ground this morning despite a weaker S&P PMI headline.  While there were some mitigating factors beyond the headline, we could just as easily conclude that traders are erring on the side of caution heading into a week of Treasury auction supply with another big jobs report on Friday–all while being forced to wait an unknown amount of time to find out where the rubber meets the road on fiscal policies that could further affect the outlook for the economy, inflation, and Treasury issuance.  All told, today’s volatility was mild at best and we didn’t learn anything new about the bigger picture.

Econ Data / Events

S&P Services PMI

56.8 vs 58.5 f’cast

Market Movement Recap

09:47 AM Slightly stronger overnight but backtracking in first 2 hours.  MBS down 2 ticks (.06) and 10yr up 2.4bps at 4.622

10:37 AM Weakest levels.  MBS down more than a quarter from highs and 5 ticks (.16) on the day.  10yr up 3.8bps at 4.636

02:04 PM modest recovery into the noon hour, but falling a bit since then.  MBS down 2 ticks (.06) and  10yr up 2.9bps at 4.627

04:11 PM Calming down in after hours trading.  MBS down only 1 tick (.03) and 10yr yields up 1.2bps at 4.61.

Treasuries made modest gains in overseas trading, but yields are heading higher during domestic hours.  There are two things working against us this morning.  The first is more of a general backdrop created by Treasury auction supply. It’s rare to see bonds take a bullish lead-off ahead of an auction cycle these days.  If anything, it’s more common to see more selling at first and then some relief after the Wednesday or Thursday auction. The second headwind is the absence of “help” from this morning’s econ data.  The “miss” in the S&P Services PMI is a bit misleading.  In addition to being a small miss, it left PMI at the highest levels since early 2022. The business confidence component is at an 18 month high and the employment component rose for the first time in 5 months.  In that light, it’s no surprise to see bonds shy away from a favorable reaction. 

The meals, which were more promotional than sales-oriented, shouldn’t make originators exempt from receiving overtime pay, an attorney argued.

A year that saw businesses express growing interest in the segment ended with a more subdued outlook due to interest rate trends, according to a new report.