Trading Desk (901) 261-5950

Good morning! When are the housing and rental markets finally going to normalize following the continual extension of pandemic protection measures? The moratorium on foreclosures supposedly expires June 1, and the moratorium on evictions is set to expire this Wednesday, March 31, though that deadline will likely be extended. While keeping families in their homes during a pandemic is crucial, these forgiveness programs can have undesirable effects if drawn out too long. Landlords and lenders dedicate funds to housing with the expectation of receiving profit, or at least recouping their original investment. If they believe borrowers cannot or will not make this happen, then they will charge a high premium, or fail to put up any capital at all for housing. In either case, the price of housing will rise. By late summer, borrowers will be in a better position to either resume making payments or deal with other alternatives.

The 10yr. T-note is +1/32 to yield 1.67%, and the FNMA 30yr. 2.5% is trading at $102-26 to yield 1.96% with a +87 spread over the treasury curve. Remember we buy and sell MBS, SBAs, and Whole Loans! Thanks, and have a productive Monday!

Cherry Picks

ARMS / FLOATERS

Cost
Average Life
Yield
Speed
Spread
Coupon
WAM
MTR
Loans
Factor
Caps
Floor
Cap
1 Yr. Libor
$104-31+
3.0 yr
0.75%
15% CPB
+10/z curve
2.492%
352
52
34
.8773
2/2/5
1.62%
7.492%
+1.62
$1.5mm+ Fannie Mae 5/1 ARM 2.492% #BP6432 7/50 stated final

10 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$103-26
3.1 yr
.71%
414 PSA
+36/I curve
2.00%
1,430
2020/2021
Fannie Major
116
.9911
$5mm+ Fannie Mae 10yr am 2.00% #MA4285 3/31 stated final

15 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$103-18
4.4 yr
1.14%
293 PSA
+43/I curve
2.00%
18,315
2020
Fannie Major
170
.8350
$10mm+ Fannie Mae Dwarf 2.00% #MA4095 8/35 stated final

20 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$104-31
3.5 yr
1.47%
384 PSA
+99/I curve
3.00%
2,944
2019
Fannie Major
222
.5437
$2mm+ Fannie Mae 20yr am 3.00% #MA3890 1/40 stated final

30 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$106-12
3.6 yr
1.60%
406 PSA
+109/I curve
3.50%
4,196
2019
Fannie Major
343
.5020
$10mm Fannie Mae 30 yr am 3.50% #MA3906 1/50 stated final

Agency CMBS

Cost
Average Life
Yield
Speed
Coupon
Call Protection
Tier
GEO
DSCR
LTV
OCC
Factor
Interest Only
$103-31
10.6 yr
1.87% + 20/swaps
0% CPY
2.26%
127mo Yield Maintenance
2
CO
1.33x
63.4%
95.0%
1.0000
49 Months
$4.7mm FNMA 12/11.5 DUS #BL6356 2.26% coupon 4/2032 stated final

Agency CMO – 3 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$106-11
3.3 yr
.98%
376 PSA
+55/I curve
FNMA Jumbo 30yr 3.00%, Seasoned
3.00%
245-315 PAC
5.5 yr
.4741
$10mm Fannie Mae "PAC" 3.00% #FNR 2016-80 JA 3/46 stated final

Agency CMO – 5 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$107-08
6.4 yr
1.76%
359 PSA
+60/I curve
New 30yr 3.00%
3.00%
Sequential
14.7 yr
1.0000
$20mm+ Freddie Mac "Sequential" 3.00% #FHR 4957 W 2/50 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.