Primary Pulse 1/8/2015

Good evening TEAM,

 

Be Careful For What You Wish For!

 

As mentioned yesterday, the ADP Jobs number did affect the markets today causing equities to rally and securities (FNMA) to mildly sell off.  GNMA’s on the other hand sold off quite severely as the contents of President Obama’s speech tomorrow was released.  Basically there is fear in the market of significant FHA refinances on the horizon that will drive up prepayment speeds which devalues existing servicing portfolios.  The below chart show’s one year FNMA’s with the insert showing GNMA’s.  Wow that is almost a 3 multiple worse magnitude sell off for GNMAs!

 

Below is the official MBA announcement regarding President Obama’s speech.

 

 

	Dear MBA Member: As you may be aware, President Obama will be delivering a major housing speech tomorrow in Phoenix, AZ.  We are excited that MBA's Chairman Bill Cosgrove has been invited to attend the speech and a small gathering with the President afterwards. Also in attendance at the speech will be MBA members Cody Pierce and Jamie Korus (our new MORPAC Chair).  In addition to discussing the current state of the market and how we got here, we expect the President will address several important policy changes/issues to address the current tight credit environment and further grow the housing market (see a White House fact sheet here). Among the announcements, the President will: Unveil a 50 basis point reduction in the annual FHA MIP, a move designed to make mortgages more affordable for first time and low and moderate income homebuyers.   Reference the coming changes to Fannie and Freddie's rep and warrant framework that should help lessen the high level of uncertainty that lenders face and allow lenders to use the full extent of the GSE credit box.   Call for GSE reform, which would be a strong signal to Congressional leadership that they need to take up the future of Fannie Mae and Freddie Mac. These are three key policy initiatives that MBA has been lobbying for, some over multiple years. Our presence at this event is yet another a sign of the position MBA holds when it comes to the public debate over housing issues in this country.    You can expect MBA to continue to be out front and leading on these issues.  In fact, if you are interested, I did an interview on CNBC this afternoon on the expected MIP announcement, which you can see here. As always, let me know if you have any questions and thank you for your continued support of MBA.   If you have difficulties reading this HTML email, please view the online version.

 

 

Capital Markets

Primary Residential Mortgage, Inc.

1480 North 2200 West| Salt Lake City|  Utah| 84116

Toll Free 1.800.255.2792

www.primaryresidentialmortgage.com capitalmarkets@primeres.com

 

o         Tick       1/32 or .03125

o         MBS       Mortgage Backed Security

o         TBA       To Be Announced (MBS with unknown future delivery)

o         Spec      Specified Pool

 

The contents in this memo are not an endorsement of any financial products or investments. PRMI assumes no liability, and will not make any recommendations with respect to the purchase or sale of any investment security or its derivatives.

Economic Calendar

Date/Time(Central)	Indicator	Period	Est.	Actual	Prior	Revised
1/6/2015 9:00 AM	Factory Orders	NOV	-0.5%	-0.7%	-0.7%
1/6/2015 9:00 AM	ISM Non-Manf. Composite	DEC	58.0	56.2	59.3
1/7/2015 6:00 AM	MBA Mortgage Apps.	2-Jan	--	11.1%	-18.2%
1/7/2015 7:15 AM	ADP Employment Change	DEC	225K	241K	208K	227K
1/7/2015 7:30 AM	Trade Balance	NOV	-$42.0B	-39.0B	-43.4B	-42.2B
1/8/2015 7:30 AM	Initial Jobless Claims	3-Jan	290K		298K
1/8/2015 7:30 AM	Continuing Jobless Claims	27-Dec	2360K		2353K
1/8/2015 2:00 PM	Consumer Credit	NOV	$15.000B		$13.226B
1/9/2015 7:30 AM	Change in Nonfarm Payrolls	DEC	243K		321K
1/9/2015 7:30 AM	Change in Manufact. Payrolls	DEC	15K		28K
1/9/2015 7:30 AM	Unemployment Rate	DEC	5.7%		5.8%
1/9/2015 7:30 AM	Avg. Hourly Earnings (MoM)	DEC	0.2%		0.4%
1/9/2015 9:00 AM	Wholesale Inventories	NOV	0.3%		0.4%
1/9/2015 9:00 AM	Wholesale Trade	NOV	0.0%		0.2%