Posted on 10/17/2013 9:57:17 AM PDT by whitedog57
Fannie Mae Risk-sharing Notes are trading tighter, according to analysts at Credit Suisse.
Mid-market spreads for Fannie Mae risk-sharing CAS securities tighter than pricing levels on Oct. 15, Credit Suisse analysts say in report today. • M1 at +167bps vs. +200 • M2 at +482bps vs. +525 • Both had priced “significantly tighter than initial guidance” • CS, BofAML were joint leads • Freddie Mac STACR indicative levels at +210, +535, CS says • Priced at +340, +715 in July • NOTE: ~75 investors participated in $675m Fannie deal, ~50 in $500m Freddie deal, meaning typically only small blocks trade, lessening price discovery • SFIG trade group said yesterday in e-mail Fannie deal was “important type of transaction for our industry and one that is being watched closely by regulators, elected officials and the entire securities market,” with “all eyes focused on risk transfer as part of GSE reform.” • CS analysts Chandrajit Bhattacharya, Marc Firestein write that current spreads, details recently released on NMI pool insurance deal suggest capital markets risk-sharing more efficient.
That is the good news. The bad news?
Wells Fargo & Co., the biggest U.S. mortgage lender, eliminated an additional 925 jobs in its home- loan unit and has cut more than 5,700 since midyear.
The bank gave the affected employees 60 days’ notice yesterday, Catherine Pulley, a spokeswoman for San Francisco- based company, said in an e-mailed statement.
“We are committed to retaining as many team members as possible” and the lender will try to find other opportunities for employees within the company, she said.
Wells Fargo, which reported a 43 percent plunge in third-quarter mortgage banking revenue, is cutting staff as home-loan refinancings dry up and loans for new purchases fail to counter the decline. The bank announced 4,800 job cuts in the third quarter.
Of course, I saw this coming along with Logan Mohtashami. Mortgage purchase applications have been falling since the May 1st surge in the US Treasury 10 year yield. The yellow dashed line is the Mortgage Bankers’ 30 year rate index.
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The same goes for refinancing applications.
mbarefimay1stturkey
Also, it doesn’t help that real median household income has fallen since 2000 and particularly since 2009.
household-income-monthly-median-growth-since-2000
And declining labor force participation (with an increasing Fed Balance Sheet in green).
lfpfedbalshut
We can only hope for what my former “neighbor” in Rumson NJ, Bruce Springsteen, sang: “Better days.” Note: Bruce lived on Bellevue Avenue across the street from Rumson Country Day School, a swank private school. I, on the other hand, lived on “The Poor Side of Town” (Lafayette St) and attended public school at Forrestdale School near our home.
Post them here.
Yet WF remains the gold standard in the banking industry.
It would be better to rent and buy their stock with the down payment.
Years ago, WF had our home mortgage when the first big reductions in interest came around. I was about to pull the trigger on a lower interest rate but gave WF an opportunity to match the new figure. “No way,” was their reply.
I went ahead and changed banks, saving about $225/month.
Six months later, a note came in the mail sayin WF had bought our new mortgage at the lower rate.
Genius !
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