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

10 Year Fixed

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

15 Year Fixed

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

20 Year Fixed

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

30 Year Fixed

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

Agency CMBS

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

Agency CMO – 3 Year

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

Agency CMO – 5 Year

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

Agency CMO – Long End

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

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.