Good morning and happy hump day! Today we do have some news! On this CPI Wednesday, our early release was Mortgage Applications for the week ending May 6. It was coming off the first increase in 8 weeks and only the second in the past 13 weeks. Today makes it two weeks in a row with +2.00%! In other news today, refinance activity is collapsing in the face of higher rates, down to 20% of total lending activity. Compare this to March 2020, when it got to 76% of all home lending. Also, today’s housing supply is finally starting to improve, as high prices and rising interest rates dampen demand.

Bonds today have been all over the board. Currently the 10yr T-Note is -8/32 to yield 3.02%. In MBS FNMA 30yr 4.00% are -4/32 to $98-31, which is a 4.16% yield and +113 to the 7.7yr treasury curve. Everyone please have a great day, 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
$102-16+
1.9 yr
2.71%
40% CPR
+23/i curve
2.628%
17
4,343
Periodic 5/2/5, Lifetime 7.779%
1.601%
+1.601%
290
.7485
$20mm+ Fannie Mae 7/1 ARM 2.628%, #BM6801, 6/49 stated final

10 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$98-08
3.8 yr
2.97%
254 PSA
+20/I curve
2.50%
836
2022
Fannie Major
118
1.0000
$5mm+ Fannie Mae 10yr am 2.50%, #MA4648, 5/32 stated final

15 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$95-06
5.8 yr
2.93%
132 PSA
+14/I curve
2.00%
10,436
2021/2022
Fannie Major
175
.9769
$5mm Fannie Mae Dwarf 2.00%, #MA4536, 2/37 stated final

20 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$97-10
7.1 yr
3.44%
146 PSA
+63/I curve
2.00%
2,338
2022
Fannie Major
240
1.0000
$30mm+ Fannie Mae 20yr am 3.00%, #MA4643, 5/42 stated final

30 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$93-08
9.8 yr
3.38%
112 PSA
+62/I curve
2.50%
42,139
2021
Fannie Major
354
.9748
$50mm 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
$90-05
9.4 yr
3.21% + 40/swaps
0% CPY
1.96%
109mo Yield Maintenance
2
OK
--
75%
94.7%
55 Months
1.0000
$16mm+ FNMA 10/9.5 DUS #BS3698, 1.96% coupon, 11/2031 stated final

Agency CMO – 3 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$97-25
4.0 yr
3.07%
163 PSA
+30/I curve
New Prod Fannie 30yr 3.50%
2.50%
Accretion Directed PAC
5.2 yr
.9954
$40mm Freddie Mac "Accretion DIrected PAC" 2.50%, FHR 5213 DG, 10/49 stated final

Agency CMO – 5 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$99-09
5.2 yr
3.13%
189 PSA
+35/I curve
FNMA 30yr Seasoned 4.50%
3.00%
Pass-Thru
6.2 yr
.3056
$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
$79-09
17.6 yr
3.64%
104 PSA
+70/I curve
New Fannie Major 30yr 2.00%
2.00%
Sequential PAC
18.8 yr
3/33
1.0000
$4.3mm Freddie Mac "Sequential" 2.00%, #FHR 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.