Good morning and happy Monday! If you looked at the schedule of economic releases for this week, you’d think the housing market had ceased to exist! We have our stand-by Mortgage Applications on Wednesday, but nothing else until next week, where the schedule is jam-packed! No worries. Even without any scheduled news, we always have interesting stories to cover. Nationwide, rents are headed substantially higher. They’re already up 7.5% this year in the first 6 months, which is three times higher than an average year! Landlords have an ace in the hole if their renters rebel and move out on them, they can just sell the property for a princely sum. The multi-family purchase market is on fire right now! On another hot topic, the Fed is coming under criticism for dragging their feet on tapering asset purchases. Canada and Australia have already made the move, many feel we should too.

In the bond market this morning, prices are back to about unchanged after an early attempt to rally. The 10yr T-Note is unchanged at a 1.35% yield and 30yr MBS 2.50%’s are -5/32 to $103-23, to yield 1.68% and spread +87 to the 5.1year treasury curve. Have a great day!

Cherry Picks

ARMS / FLOATERS

Cost
$104-27
$1.56mm Fannie Mae 5/1 ARM 2.497% #BP6432 7/50 stated final
Average Life
2.8 yr
Yield
0.70%
Speed
15% CPB
Spread
+10/z curve
Coupon
2.497%
MTR
48
Loans
31
Caps
Periodic 2/2/5, Lifetime 7.497%
Floor
1.62%
1 Yr. Libor
+1.62%
WAM
348
Factor
.8261

10 Year Fixed

Cost
$104-04
$10mm+ Fannie Mae 10yr am 2.00% #MA4368 5/31 stated final
Average Life
3.1 yr
Yield
.61%
Speed
402 PSA
Spread
+43/I curve
Coupon
2.00%
# Loans
2,203
Origination
2021
Type
Fannie Major
WAM
116
Factor
.9775

15 Year Fixed

Cost
$103-24
$5mm Fannie Mae Dwarf 2.00% #MA4383 7/36 stated final
Average Life
4.7 yr
Yield
1.14%
Speed
253 PSA
Spread
+43/I curve
Coupon
2.00%
# Loans
15,876
Origination
2020
Type
Fannie Major
WAM
178
Factor
.9940

20 Year Fixed

Cost
$103-00
$5mm+ Fannie Mae 20yr am 2.00% #MA4387 7/41 stated final
Average Life
5.8 yr
Yield
1.43%
Speed
222 PSA
Spread
+53/I curve
Coupon
2.00%
# Loans
10,349
Origination
2021
Type
Fannie Major
WAM
238
Factor
.9965

30 Year Fixed

Cost
$106-00
$10mm Fannie Mae 30 yr am 3.50% #MA4296 2/51 stated final
Average Life
4.4 yr
Yield
1.99%
Speed
369 SA
Spread
+134/I curve
Coupon
3.50%
# Loans
88
Origination
2020/2021
Type
Fannie Major
WAM
353
Factor
.8976

Agency CMBS

Cost
$107-08
$17.0mm FNMA 12/10 DUS #BL6689 2.19% coupon 5/32 stated final
Average Life
9.9 yr
Yield
1.42% + 10/swaps
Speed
0% CPY
Coupon
2.19%
Call Protection
106mo Yield Maintenance
Tier
2
GEO
OH
DSCR
1.33x
LTV
75.0%
OCC
94.4%
Factor
1.0000

Agency CMO – 3 Year

Cost
$103-16
$5mm Fannie Mae "Busted PAC" 2.50% #FNR 20-20 DC 7/47 stated final
Average Life
2.9 yr
Yield
1.22%
Speed
274 PSA
Spread
+85/I curve
Collateral
New Fannie 30yr 2.50%
Coupon
2.50%
Band
Busted PAC
Avg Life w/ rates +300
6.2 yr
Factor
.6031

Agency CMO – 5 Year

Cost
$106-27
$6.6mm+ Fannie Mae "Pass-Thru" 3.00% #FNR 17-72 B 9/47 stated final
Average Life
4.4 yr
Yield
1.19%
Speed
291 PSA
Spread
+60/I curve
Collateral
Seasoned FNMA 30yr 4.50%
Coupon
3.00%
Band
Pass-Thru
Avg Life w/ rates +300
6.32 yr
Factor
.3754

Agency CMO – Long End

Cost
$96-06
$4.7mm Freddie Mac "PAC" 2.00% #FNR 5055 PL 12/50 stated final
Average Life
18.4 yr
Yield
2.25%
Speed
182 PSA
Spread
+45/I curve
Collateral
New 30yr Jumbo 2.00%
Coupon
2.00%
Band
98-272 PAC
Avg Life w/ rates +300
18.5 yr
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.