MBS Execution, AI, DSCR, Processing, HELOC Products; Hedge Funds, Treasuries, and Mortgage Rates

Today we have a press conference with HUD Secretary Scott Turner and U.S. Federal Housing Director Bill Pulte announcing “a significant development in the U.S. housing finance system” at 12:45PM ET. Rumors run the gamut from “operationalizing” VantageScore to moving control of the FHA & VA programs under Pulte and the FHFA. Meanwhile, the capital markets have a lot on “their” mind, and I received this note. “Rob, I’ve heard that hedge funds own a record percentage of U.S. Treasuries. Does that impact mortgage rates for my borrowers?” Anything impacting supply and demand of fixed-income securities can impact mortgage rates. Per Apollo, you are correct: $6 trillion, or 8 percent of the outstanding debt of our federal government is owned by companies that use complex trading and risk management techniques. U.S. stocks have reached record highs despite the ongoing war with Iran, an oil shock, and warnings of sluggish economic growth. Perhaps investors view the conflict as temporary and expecting resolution, with investors also showing confidence in tech stocks. The stock market is always trying to price what the world is going to look like months from now. Its dog eat dog among hedge funds, and if they collectively think a profit-making opportunity is disappearing, they’ll move quickly. (Today’s podcast can be found here and this week’s ‘casts are sponsored by Experian Verify, a comprehensive income and employment verification solution for mortgage lenders. By uniting instant payroll data, permissioned access, and research verification in one seamless experience, Experian Verify helps lenders reduce friction, accelerate decisions, and confidently verify every U.S. worker. Today’s has an interview with loanDNA’s Neil Sahota on how the mortgage value chain is being reshaped, from origination through servicing, and what that means for lenders trying to stay competitive.)