Trading Desk (901) 261-5950

Good morning! Last month, the MBA’s Mortgage Credit Availability Index (MCAI) increased 0.6% to 125.4. The onset of the pandemic resulted in a significant pullback in mortgage credit, so the rise in the MCAI shows relaxation on the part of lenders. The most notable increase came from the Jumbo MCAI, which rose a whopping 1.5%. The Conventional MCAI, which looks at loans not backed by the government, came in second at +0.8%. The Government MCAI, which includes USDA, VA, and FHA loans saw a more moderate increase of 0.4%, and the Conforming MCAI, which tracks Fannie Mae and Freddie Mac loans, just barely increased by 0.02%. Lenders are faced with a difficult and delicate task: trying to make credit as widely available as possible while also screening out unqualified borrowers.

The 10yr. T-note is -2/32 to yield 1.65%, and the FNMA 30yr. 2.5% is trading at $103-01 to yield 1.94% with a +76 spread over the treasury curve. Thanks, and have a wonderful weekend!

Cherry Picks

ARMS / FLOATERS

Cost
Average Life
Yield
Speed
Spread
Coupon
WAM
MTR
Loans
Factor
Caps
Floor
1 Yr. Libor
$105-01+
2.95 yr
0.70%
15% CPB
+2/z curve
2.492%
351
51
33
.8587
2/2/5
1.62%
+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
$104-00
3.1 yr
.66%
390 PSA
+28/I curve
2.00%
1,430
2020/2021
Fannie Major
115
.9803
$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
$103-10
4.5 yr
1.22%
220 PSA
+46/I curve
2.00%
17,731
2020
Fannie Major
169
.7989
$2.2mm+ 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
$102-00
6.5 yr
1.65%
171 PSA
+42/I curve
2.00%
7,643
2020/2021
Fannie Major
239
1.0000
$10mm+ Fannie Mae 20yr am 2.00% #MA4333 5/41 stated final

30 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$106-06
4.0 yr
1.82%
357 PSA
+119/I curve
3.50%
3,894
2019
Fannie Major
342
.4647
$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
$100-22+
10.6 yr
1.92% + 20/swaps
0% CPY
1.975%
137mo Yield Maintenance
2
KS
Pending
67.9%
95.0%
.9987
$2.0mm FNMA 12/11.5 DUS #BL1521 1.975% coupon 3/2033 stated final

Agency CMO – 3 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$103-16
2.6 yr
1.06%
361 PSA
+80/I curve
Mod-Seasoned Freddie 30yr 4.00%
2.50%
Pass-Thru
6.06 yr
.9207
$10mm Fannie Mae "Pass-Thru" 2.50% #5101 AM 2/47 stated final

Agency CMO – 5 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$105-25
4.5 yr
1.60%
270 PSA
+85/I curve
Seasoned Mixed
3.00%
Pass-Thru
6.53 yr
.2550
$6.6mm+ Freddie Mac "Pass-Thru" 3.00% #FNR 12-112 DA 10/42 stated final

Agency CMO – Long End

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$93-28
16.1 yr
2.47%
152 PSA
+45/I curve
New 30yr 2.00%
2.00%
Sequential
20 yr
1.0000
$12mm+ Freddie Mac "Sequential" 2.00% #5083 ML 3/51 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.