Trading Desk (901) 261-5950

Good morning and happy hump day. We had one scheduled report today, Mortgage Applications for the week ending May 21, which came in at -4.2% after small up numbers the past 2 weeks (+2.1%/+1.2%). Most of the chatter this morning has focused on yesterday’s weaker than expected New Home Sales, especially that big revision on the March number (+20.7% to +7.4%). Economists are once again laying the blame on runaway prices on costs of materials and homes in general. Builders are delaying signing contracts until after new homes are framed, in many cases, to assure that they’re able to pass on supply chain price increases to their buyers. Lower output, higher prices is housing in a nutshell.

The bond market today is up marginally in price. 10yr T-Notes are +2/32 to yield 1.55%. In MBS FNMA 30yr 2.50% are +4/32 to yield 1.67%, which is +85 basis points to the 5.2yr treasury curve. Have a great day!

Cherry Picks

ARMS / FLOATERS

Cost
Average Life
Yield
Speed
Spread
Coupon
WAM
MTR
Loans
Factor
Caps
Floor
1 Yr. Libor
$104-28
1.91 yr
-0.22%
15% CPB
-52/z curve
2.492%
304
28
1,828
.5643
Periodic 5/2/5, Lifetime 7.484%
1.627%
+1.627
$10mm+ Fannie Mae 7/1 ARM 2.492% #841084 8/47 stated final

10 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$104-10
3.2 yr
.60%
402 PSA
+26/I curve
2.00%
1,109
2021
Fannie Major
118
1.0000
$2.1mm+ Fannie Mae 10yr am 2.00% #MA4368 5/31 stated final

15 Year Fixed

Cost
Average Life
Yield
Speed
Spread
Coupon
# Loans
Origination
Type
WAM
Factor
$103-24
4.2 yr
1.05%
254 PSA
+47/I curve
2.00%
17,399
2020
Fannie Major
168
.7772
$5.2mm+ 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
$102-24
6.0 yr
1.49%
205 PSA
+51/I curve
2.00%
17,404
2020/2021
Fannie Major
238
.9967
$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
$106-28
4.5 yr
1.84%
368 PSA
+119/I curve
3.50%
92
2020/2021
Fannie Major
355
.9392
$10mm Fannie Mae 30 yr am 3.50% #MA4296 2/51 stated final

Agency CMBS

Cost
Average Life
Yield
Speed
Coupon
Call Protection
Tier
GEO
DSCR
LTV
OCC
Factor
$105-10
10.0 yr
1.63% + 20/swaps
0% CPY
2.19%
108mo Yield Maintenance
2
OH
1.33
75.0%
94.4%
1.0000
$17.0mm FNMA 12/10 DUS #BL6689 2.19% coupon 5/2032 stated final

Agency CMO – 3 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$103-30
2.7 yr
.95%
497 PSA
+70/I curve
Seasoned Fannie 30yr Jumbo 4.00%
2.50%
Busted PAC
7.6 yr
.3497
$5mm Fannie Mae "Busted PAC" 2.50% #FNR 17-2 KG 2/47 stated final

Agency CMO – 5 Year

Cost
Average Life
Yield
Speed
Spread
Collateral
Coupon
Band
Avg Life w/ rates +300
Factor
$105-30
4.4 yr
1.52%
282 PSA
+90/I curve
Seasoned Mixed
3.00%
Pass-Thru
6.50 yr
.2465
$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
$95-11
15.6 yr
2.36%
159 PSA
+45/I curve
New 30yr 2.00%
2.00%
Sequential
20.1 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.