NOTE: Compass has added a new number to the Morning Color. The C30 Avg GPM (Conventional 30-year average gross profit margin) tracks the gross profit margin from the previous day’s originations across the same national pool of originators and loan locks used in Compass’s Production Index. This number represents the originator’s gross profit margin, i.e. the difference between what the originator pays for the loan (what is posted on a rate sheet) and what the originator could sell the loan for into the secondary market. Secondary Marketing Managers can use day-over-day changes in C30 Avg GPM, production and rates to establish margin elasticity assumptions. Compass clients are encouraged to talk to their account managers about participating in and receiving daily benchmarking reports showing their specific margins and production levels against anonymous, national participants. The Margin will likely run counter to interest rates, i.e. if rates start to climb, margins will likely narrow.
If you would like to receive a handheld version of the Morning Color along with/instead of this version, please reply. Thank you.
Date: February 23, 2010 at 8:45 Eastern
|
Benchmark |
MAR FN30 4.5 |
FN30 CC |
FN30 NR |
MAR EDF 2.0 BUNDLE |
MAR GN30 4.5 |
|
Last Close |
100:13 |
4.46% |
5.22% |
98.747 |
100:28 |
|
Current Level |
100:17 +4 |
4.44% -2 bps |
5.20% -2 bps |
98.765 +1.8 bps |
101:00 +4 |
Latest Spreads:
|
Product |
Last |
Change |
|
FN30 CC Spread |
85 bps |
-2 bps |
|
|
|
MTD -6 |
|
FN30 4.5 TOAS |
20 bps |
-2 bps |
|
C30 Avg GPM |
53 bps |
-14 bps |
|
Production Index |
Day over day |
119.6% |
|
|
% of 10 day avg |
67.7% |
|
Mand-BE Spread |
33 bps |
-5 bps |
|
|
|
|
|
MSR Retain IRR |
20.20% |
+3.16% |
|
|
|
|
|
MSR Index |
106.0% |
MTD +6.0% |
House Price Data provided by Radar Logic, Inc.
|
RPX MSA |
Price per Square Foot |
M-T-M* |
Q-T-Q* |
RPX Implied HPA through 12/31/2010 |
|
25-MSA Composite |
$193.92/sqft |
+$0.28/sqft |
+$0.78/sqft |
-1.0% |
|
Philadelphia |
$141.20/sqft |
+$0.56/sqft |
-$1.92/sqft |
No Contract |
Economic News/Activity Today
|
Time |
Release |
Period |
B’Berg Survey |
Actual |
Prior |
Revised |
|
9:00 |
S&P/CaseShiller Home Price Ind |
DEC |
146.3 |
– |
146.3 |
– |
|
9:00 |
S&P/CS Composite-20 YoY |
DEC |
-3.0% |
– |
-5.3% |
– |
|
9:00 |
S&P/CS 20 City MoM% SA |
DEC |
0.10% |
– |
0.24% |
– |
|
9:00 |
S&P/ Case-Shiller US HPI |
4Q |
– |
– |
137.2 |
– |
|
9:00 |
S&P/ Case-Shiller US HPI YOY% |
4Q |
-1.2% |
– |
-8.9% |
– |
|
10:00 |
Richmond Fed Manufact. Index |
FEB |
1 |
– |
-2 |
– |
|
10:00 |
Consumer Confidence |
FEB |
55.0 |
– |
55.9 |
– |
|
5:00 |
ABC Consumer Confidence |
Feb 21 |
– |
– |
-49 |
– |
Market Color
After Lowe’s posted better-than-expected earnings yesterday, Home Depot beat 4Q expectations and raised the dividend for the first time since 2006. The Treasury is auctioning off $ 44B in 2 yr notes today, $ 42B in 5 yr notes tomorrow, and $ 32B in 7 yr notes on Thursday. Right now, the futures market is pricing in a 90% chance that the Fed keeps rates somewhere between 0% and .25% through June 23rd, 2010. Currently, the Ten Year yield is at 3.77% (3.79% yesterday) and the 2-10 yield spread is at 291bps, steepening 2bps since yesterday morning.
Disclaimer: C30 Avg GPM (Conventional 30-year Average Gross Profit Margin), MSR Index, FN30-NR, BE-MAND Spread and MSR Rich/Cheap represent generic industry measures. Actual results and measures will likely vary by individual originator or servicer.
* Radar Logic Daily™ Price Data represents the previous day’s 28-day average price per square foot compared to previous month’s (M-T-M) or quarter’s (Q-T-Q) 28-day average price. For more information on RPX™ Forward Contracts, Radar Logic Daily™ Price Data on an MSA or ZIP level contact or valuation and/or hedging application of either, please contact Compass at 415 462 7500.
**If you would like to be added to this distribution list or would like an explanation of any of these numbers, please send an email to [email protected] **
Compass Analytics | 4040 Civic Center Drive, Suite 450 |San Rafael , CA 94903 |
415-462-7500 | www.compass-analytics.com