| S&P Futures | 1564.7 | 0.3 | 0.02% |
| Eurostoxx Index | 2665.2 | -14.6 | -0.54% |
| Oil (WTI) | 96.64 | -0.5 | -0.57% |
| LIBOR | 0.281 | -0.001 | -0.35% |
| US Dollar Index (DXY) | 82.81 | -0.117 | -0.14% |
| 10 Year Govt Bond Yield | 1.85% | -0.01% | |
| Current Coupon Ginnie Mae TBA | 104.6 | 0.0 | |
| Current Coupon Fannie Mae TBA | 103.3 | 0.0 | |
| RPX Composite Real Estate Index | 189.3 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.69 |
Markets are flat after a mixed ADP Employment report. They forecast that the private sector added 158k jobs in March, below the 200k estimate. February was revised upward, however to 237k. Mortgage Applications fell 4%. Bonds and MBS are flat
The Obama administration is pushing banks to lend to borrowers with weaker credit, encouraging them to use FHA loans and to use more subjective judgment in determining whether to offer a loan. Of course the CFPB has already drawn a line in the sand with DTI. Housing officials are urging the Justice Department to provide assurances to banks that they will not face legal consequences if they comply and the borrowers subsequently default. Working against this initiative is that (a) the CFPB has drawn a bright line around the qualifying mortgage and (b) Ginnie Mae will flush an originator when they get 5% to 10% portfolio delinquencies.
On the other hand, credit IS easing, especially for those who had short sales or foreclosures during the housing bust. Of the 7 million borrowers who had a foreclosure or a short sale, about 1 million are eligible for an FHA mortgage. Second, the return of the private label market (however small) will allow borrowers who don't fit in the government bucket or the super high quality jumbo bucket to get financing.
Fannie Mae's record profit has some questioning the future of the housing finance. According to the Administration's White Paper, the intention seemed to be that the government would euthanize Fan and Fred and replace them with an entity that would act as a re-insurer. However, with more pressing issues facing the Administration, dealing with the GSEs has taken a back seat. In the interim, they are improving their balance sheets and have paid back nearly half of what they owe to the government. And with the stock approaching $1.00, the 4.6 billion shares owned by the government start to become significant. It will become harder to kill the company when the stock is worth some money. That is obviously what the market has figured out, as the stock has tripled since Fannie announced they will be profitable nearly 3 weeks ago.
Chart: Fannie Mae Stock Price:
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