Where R Rates / MBS Market Update

No morning update next week. I will be on vacation : )
JOB CUTS & GERMANY

Well the good news is that at least I warned you. You can only have up days one after another for so long. At some point you hit a hard ceiling and rates have to bounce down a little before they can go back up.

On the jobs front which is what we received this morning. We had the largest job cuts month since July of 2020. 172K jobs were cut compared to 49K in January. It is the highest cut in the month of February since 2009. That being said, it makes sense as to why. Most of that is attributed to the govt jobs cut via DOGE as well as cancelled govt contracts. 62K total govt job cuts followed by 39K retail job cuts.

Another issue is that Germany announced a big surge in their defense. In doing this their 10 Yr version of our treasury yield increased by 40 BPS yesterday. That is a huge raise in yield for a large bond which leads people away from our bonds causing a little bit of a hit to our market. That being said they went from 2.4% yield to a 2.8% yield so our yield is still better at 4.28 but it does impact global markets.

We have three Fed Speakers today and we will see what happens.

Tomorrow is a big jobs report so make sure you monitor whatever MBS site you may monitor. As a reminder a decent free version where they put information on their homepage without logging in is Mortgage New Daily .

As stated above I am going to go enjoy a nice vacation with my amazing bride and will see you guys on March 17th.

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No morning update next week. I will be on vacation : )
FORGET THE EMD

One of the pains in processing a loan can be verifying the Earnest Money Deposit. Sometimes when providing statements it brings up other issues on those statements.

Life would just be easier if we accepted the EMD as is and moved on. In some cases we can do that. But when you ask?

Because the EMD can be used towards down payment and closing costs we must properly source those funds and make sure they are acceptable. If the EMD is being used as part of the minimum contribution required by Fannie or Freddie then the lender must get a copy of the canceled check and the 1 or 2 bank statements depending on AUS showing the check has cleared the account.

That is what you are accustomed to and that is required.

There is an option two when feasible.
If the EMD is NOT required to meet the minimum contribution required and the borrower has verified sufficient funds for closing and reserves without needing the EMD then a canceled check is not required and the underwriter is able to just back out the EMD from the current available funds since they are not needed.

Side note: If the sufficient funds is coming from the sale of a home that is not an eligible source to override the need to prove the EMD. They need current verified funds in their account before you can back it out.

You will still need to verify with a copy of the check or a letter from the agent holding the funds stating they have received the EMD so we can apply it to the closing conditions.

This would be good to share with referral partners and clients before the EMD changes hands and let them know this is an option when a borrower has other sufficient funds to verify what is needed for closing.

Jackism of the Day

No morning update next week. I will be on vacation : )
BE A FAILURE

One of the greatest things I love to do is fail and I love to fail a lot!

I also love it when someone opts out of this morning update. It makes me smile : ) 

It makes me smile because that means there is one less person that has a cluttered inbox in this world. If they were not reading it anyway I certainly do not want it inconveniencing them. I do not see this as me failing, I see this as one person who does not need what I offer where others do.

Thomas Edison made a great point. The value of an idea lies in the using of it.

So simple and yet so powerful.

This morning update started as an idea. It was over 5 years ago I started writing a version of this morning update. It started with an idea and then it became a reality only because I put it to work.

I spent 2 months straight one time creating a customer loyalty program for my clients. I was all in. The marketing books says it is important and I went all in. Massive amounts of time was put in to creating this system just for my clients.

A few months after starting it I did have some folks who loved it. I would also say 80+% did not pay any attention at all to it. So I nixed it.

I cannot tell you the number of ideas I have on a weekly basis on how to increase my impact in this industry. I think on them, I ask questions to myself and I try to see how you guys would receive the idea. I then put the ones that pass muster in to play and I go all in. I let it play out for a little bit and if it is working then I continue. If it is not then I dump it like a big ole rock and say I tried.

The point here is what ideas do you have going through your mind? Are you a dreamer or a doer? Most ideas usually only involve labor. Those are the easiest ones to get going.

What idea have you been holding back on that you have really been wanting to try out.

Go ahead, give it a try. If it fails then accept it and move on to the next idea. I promise you. If you were to take 10 of your best ideas and begin to implement them one at a time one of them will succeed and likely become a big part of your future.

Implement 100 of your ideas and as you can imagine this could change your entire life. If they fail then move on to the next one.

All of the big dawgs like Bezos, Musk, Branson, Steve Jobs and even Trump have failed so many times they likely could not even count them. What matters is the time they do not fail and it pays off.

Start small, take a risk, implement an idea and just see what happens.