Good morning and welcome to Friday, the gateway to the weekend! Once again, we don’t have any scheduled mortgage news today. We do, however, have some things of interest to talk about. First up, mortgage lenders predict reduced loan demand and profitability as the year rolls out. 30yr. mortgage loan rates have bounced to 4.28%, the highest level in nearly two years. Higher rates will affect the originators negatively. Coincident with the move in lending rates, Agency MBS broke major price support yesterday and are positioned to fall further in price as the Fed raises rates.

Bonds today are under mild selling pressure, with 10yr T-Notes -4/32 to yield 2.00%. In MBS FNMA 30yr 3.00% are -3/32 to $99-22, which is a 3.04% yield and +103 basis points to the 7.7yr treasury curve. These have extended over 3yrs since the 4th quarter of 2021! That’s it from us. Have a great day and weekend and call or email with your MBS and loan inquiries.

Cherry Picks

ARMS / FLOATERS

Cost
Average Life
Yield
Speed
Spread
Coupon
MTR
Loans
Caps
Floor
1 Yr. Libor
WAM
Factor
$102-09+
3.3 yr
1.78%
15% CPB
+30/z curve
2.573%
60
807
Periodic 5/2/5, Lifetime 7.573%
1.618%
+1.618%
336
.9723
$12.4mm+ Fannie Mae 7/1 ARM 2.573%, #BM6855, 6/50 stated final

10 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$102-00
3.5 yr
1.37%
318 PSA
+13/I curve
2.00%
637
2021
Fannie Major
117
1.0000
$51mm+ Fannie Mae 10yr am 2.00%, #MA4531, 1/32 stated final

15 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$101-25
5.1 yr
1.61%
210 PSA
+10/I curve
2.00%
4,253
2021
Fannie Major
179
1.0000
$24mm Fannie Mae Dwarf 2.00%, #MA536, 2/37 stated final

20 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$100-00
6.4 yr
1.99%
172 PSA
+35/I curve
2.00%
9,062
2021
Fannie Major
236
.9881
$29mm+ Fannie Mae 20yr am 2.00%, #MA4474, 11/41 stated final

30 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$100-29
7.3 yr
2.34%
195 PSA
+65/I curve
2.50%
42,511
2021
Fannie Major
357
.9912
$5mm Fannie Mae 30 yr am 2.50%, #MA4493, 12/51 stated final

Agency CMBS

Cost
Average Life
Yield
Speed
Coupon
Call Protection
Tier
GEO
DSCR
LTV
OCC
Interest Only Until
Factor
$100-08
11.6 yr
2.17% + 30/swaps
0% CPY
2.17%
136mo Yield Maintenance
2
CA
--
68.5%
95%
82 Months
1.0000
$29mm+ FNMA 12/11.5 DUS #BS3690, 2.17% coupon, 11/2033 stated final

Agency CMO – 3 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$102-17
4.3 yr
1.82%
320 PSA
+45/I curve
New Fannie 30yr 3.50%
2.50%
Busted PAC
8.6 yr
.4689
$5mm Freddie Mac "Busted PAC" 2.50%, FHR 4926 BL, 10/49 stated final

Agency CMO – 5 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$105-10
4.2 yr
1.61%
270 PSA
+25/I curve
FNMA 30yr Seasoned 4.50%
3.00%
Pass-Thru
6.2 yr
.3240
$28mm+ Fannie Mae "Pass-Thru" 3.00%, #FNR 17-24 E, 4/47 stated final

Agency CMO – Long End

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Interest Only until
Factor
$92-17
17.9 yr
2.52%
156 PSA
+45/I curve
New 30yr Jumbo 2.00%
2.00%
142-260 PAC
19.6 yr
5/36
1.0000
$4.7mm Freddie Mac "AD PAC" 2.00%, #FHR 5055 PL, 12/50 stated final

Jim Tait is a registered representative with and offers securities through Hanover Securities, Inc. (Hanover), Member FINRA & SIPC. Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Securities that may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results.

 This information from Hanover Securities is for your private use and does not constitute an offer or solicitation with respect to the sale of any security. This information was obtained from sources we believe to be reliable but we do not represent that it is accurate or complete, and it should not be relied on as such. Certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in securities identical or related to those identified herein. 

Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Loans and/or Securities which may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results. This information from Banes Capital Group (BCG) and/or Hanover Securities is for your private use, and was obtained from sources we believe to be reliable. However, we do not represent that this information is accurate or complete, and it should not be relied on as such. This information is for institutional investors only, and as such certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in loans or securities identical or related to those identified herein. 

The pricing of loans or any Level II or III asset is inherently an exercise in quantifying uncertain variables. As such, great care should be taken when pricing loans for reporting purposes. The information included herein should never be taken as the sole method, or even a method to be relied on, for the pricing of loans or other Level II or III assets as this is for informational purposes only.