November 14, 2018

NDM News

One week left of our FHA 0.25 Special!!!  Rake in an extra 0.25 on ALL FHA Products. Be sure to lock your FHA loans by next Wednesday, November 21. Not signed up with us? Click here to become an approved broker partner.


Market News

Stocks are moving higher to begin Wednesday’s exchange as crude recovers from its nosedive in yesterday’s trading session.  Asset allocators are starting to focus on 2019 forecasts, and positioning according to their interest rate outlook, geopolitical landscape, and growth projections.  The S&P500 is currently trading at 2,734.41, 0.45% higher, and is up about 2.29% YTD.

Treasuries are little changed in the AM as investors digest the latest CPI report.  The consumer price index (ex food/energy) came in at a 0.2% MoM, and 2.1% YoY increase for the month of October, which was slightly below market expectations.  The Federal Reserve shoots for a benchmark interest rate of 2%, and prefers the PCE.  The US 10-YR Note is currently trading at 3.1580%, 0.0184 higher.

MBS Performance and Volumes

MBS trailed Treasuries in post-holiday on Tuesday, as the product was unable to keep up with the rally across the yield curve.  Fannie 3.5s through 5s underperformed 10s by 3/32s, while Ginnies had a more inconsistent performance; 3.5s and 4s lagged the 10-year note by 4 ticks, while 4.5s underperformed by 2/32s and 5s managed to outperform by a tick.  15-year Fannies had a very poor session on Class B notification day, with most liquid coupons trailing the 5-year note by 3-4 ticks.   Trading activity was moderate, with a total of $238 billion in activity, including around $15 billion in specified pools.

MBA Mortgage Applications came in at a 3.2% decrease for the week ended November 9th.  Purchases decreased 2.3% after a 0.5% rise in the prior reading.  Refinances fell 4.3%, and accounted for 39.4% of total applications.  The average contract interest rate for a 30-yr conforming fixed commitment came in at 5.17%.

TBA MBS’ are churning in place in the AM as investors weigh the propensity of a December rate hike after the release of October’s CPI report.  On top of this, Jerome Powell is scheduled to talk later today, and is expected to ease investor fears concerning the speed and trajectory of interest rates.  Liquid coupons are currently trading flat1 tic higher.

The USD is little changed to begin Wednesday’s exchange as the greenback appreciates against the GBP due to an overseas miss in an inflation report, and Brexit worries.  The DXY is currently trading at 97.04, 0.09% higher.

Oil is rebounding from yesterday’s plummet, gaining back a small percentage of what was lost in Tuesday’s 7.1% rout.  WTI is currently trading at 57.29, 2.87% higher.


Josh Pappert – VP, Capital Markets
Nations Direct Mortgage


Disaster Announcement – California Wild Fires

In addition to Butte County, FEMA has declared all of LA County and all of Ventura County a disaster area. Due to the size of the counties, we will only require inspections for Los Angeles and Ventura Counties in the zip codes listed below. Properties located in the affected areas listed below are subject to re-inspection if the appraisal was completed on or before the incident period. Counties may be added or removed as the fire progresses and information on the damage becomes apparent.

Incident Period; November 9th to (on-going)


Affected Areas

  • Butte County
  • LA & Ventura County Zip Codes
    • 90265
    • 91301
    • 91302
    • 91307
    • 91320
    • 91361
    • 91362
    • 91377
    • 93012
    • 93033
    • 93065


Re-Inspection Policy

For properties located in an NDM declared disaster areas, NDM will require a property re-inspection as per the below “Inspection requirements”. Re-inspection requirements are expected to remain in place for all properties with appraisal dates prior to the incident end date or for at least 90 days following the incident end date for loan transactions where an appraisal inspection is not otherwise required, unless otherwise announced by NDM.


Re-Inspection Requirements

If a property is in a identified disaster area and the most recent appraisal in the loan file was completed on or before the incident period end date*, or an incident period end date has not yet been declared, then, subject to the applicable product and program requirements, NDM requires that an acceptable property inspection meeting the following requirements be completed prior-to-purchase:

  • A final exterior inspection or appraisal update signed by the original appraiser and completion date
    • Appraisal Update, form Fannie Mae 1004D, Disaster Inspection, or
    • Completion Report, form Freddie Mac 442, or
  • Property Inspection Report –
    • Form Fannie Mae 2075, or
    • Form Freddie Mac 2070, Streamlined Inspection


Kris Gomez, Chief Credit Officer
Nations Direct Mortgage