Mortgage originators need to disregard conventional wisdom and prepare for a refinance market this year as the 10-year Treasury yield could come close to its lowest level ever, said Barry Habib, the chief executive of MBS Highway.
Habib spoke at the Regional Conference of Mortgage Bankers Associations on Wednesday before the Federal Reserve made its announcement that it was not raising rates. At the session he said he did not expect the Fed to act now, but he was predicting it could raise short-term rates in June.
If that happened, spooked stock investors would pull their money from the equity market and put it into bonds like the 10-year Treasury. The rate on the 10-year Treasury would decline as a result, and since that instrument affects pricing of the 30-year fixed-rate mortgage, that rate would decline as well.
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W.J. Bradley Mortgage Capital shut its doors after it was stuck with nonagency loans with TILA/Respa integrated disclosure issues that it couldn't sell.
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The Federal Housing Administration said Tuesday that it has revised its proposed lender certification requirements in an effort to provide more clarity and reassure lenders they won't be penalized for minor loan defects or mistakes.
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While the $1.9 billion of bonds are not guaranteed by the government, most of the underlying loans could have been sold to Fannie and Freddie, and the transaction accomplishes the same thing as the GSEs' risk-transfer deals.
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Ginnie Mae needs more, and better-paid, staff to keep up with growing risks on nonbank seller/servicers, the watchdog agency head said.
March 15
Habib said rates on the 30-year mortgage could then fall to as low as 3%.
It's quite a contrarian stance. The most recent Mortgage Bankers Association
Habib made a similarly
His firm, MBS Highway, is a provider of real-time stock and bond market information and analytics for lenders.
