Good Thursday AM,

Stocks are up and mortgage bonds are leaking this morning while treasuries are holding. The tone is relatively quiet at the moment as the market is absorbing a favorable (not for bonds) Jobless claims report. Tomorrow is a huge news day as we will get the Non-Farm Payroll and other key job metrics. The market has high expectations for new jobs and if they beat those expectations, I would expect it to be painful for bond prices. Because we are at the top of the trading range and we typically lock at the top, it makes sense not to risk tomorrows news. Of course, the news could be a terrible Jobs report which would spark a rally, I am not sure it is worth the risk while we sit up top of the range. Nobody knows what the report will bring.

A little update to the new FHFA refi program that both Fannie Mae and Freddie Mac will allow for. Fannie Mae’s RefiNow option will be available June 5, while Freddie Mac’s Refi Possible will be available two months later in August. It’s estimated that the options, intended to pave the way for lower-income borrowers who missed out on the massive refi wave in 2020, will save homeowners an additional $100 to $250 a month on their mortgage payments. To take advantage of the new refi options, lenders must ensure borrowers save at least $50 a month in their mortgage payments while simultaneously dropping their interest rate by at least 50 basis points. The FHFA will also require that lenders provide a maximum $500 credit for an appraisal if the borrower is not eligible for an appraisal waiver, which the GSEs will reimburse to the lender once the loan is sold to them.

Please remain safe and healthy, make today great!