Both basketball player Bill Russell and Nichelle Nichols, Lt. Uhura on Star Trek,” passing away!? Meanwhile, today I head to Chicago, the #1 city for naked bike riding. (No, I’m not bringing my bike.) On a more serious topic, this week we receive the “employment situation report,” and per the Census Bureau, 16 million working-age Americans have “long COVID” impacting their ability to work. How does that skew the numbers? Housing and jobs continued to drive the U.S. economy, and I continue to receive questions about hybrid ARMs. While you might assume ARM volumes would be growing rapidly with higher rates, the inverted yield curve and lack of price discovery for anything approaching a reasonable premium has kept issuance low. Fannie’s trading desk reports that, “While we have seen a modest uptick in application volume, that has not directly translated into pool issuance. Instead, we continue to see many portfolio lenders simply choose to hold the product on balance sheet, which makes sense given their currently low deposit costs. Some lenders choosing to hold product on balance sheet may be priced through GSE execution, adding to the confusion. Keep in mind ARMs work the best with a steep curve and in instances where there are few LLPAs being converted into rate.” (Today’s podcast is available here and this week’s is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services in the mortgage industry and in banking. Today’s features an interview with David Lewis, National Renovation Manager for Homespire Mortgage, on renovation lending.)

Published On: August 1, 2022 / Categories: Mortgage News /