Morning Report: The CFPB stays, but the structure must change

Vital Statistics:

Stocks are lower on COVID fears. Bonds and MBS are up small.

Many states are slowing or reversing re-opening plans.

The Supreme Court ruled that the CFPB is permitted to stay, but the Director can be fired at will. This was a Solomon-esqe decision that split the difference between people who wanted the entire bureau eliminated and those that wanted the bureau to to run on autopilot.

Jerome Powell and Steve Mnuchin will appear before the House Financial Services Committee this afternoon. There will probably not be anything market moving however just be aware.

Home prices rose 0.3% MOM and 4% YOY according to the Case-Shiller index. These are April numbers. The South and West were the hot spots, while the Northeast was weak.

Ginnie Mae put out a APM which deals with re-securitizing re-performing Ginnie loans. These loans are ineligible for traditional Ginnie pools and will have to go into new custom pools which will presumably trade far back of normal GII pools. In a nutshell, this will impact FHA and VA pricing for the worse.

Democrats are preparing a nationwide eviction moratorium. Meanwhile, FHFA is working on continuing forbearance for multifamily borrowers who suspend evictions. Obviously, nothing here is going to be good for investment properties, so expect pricing to soften here (or programs get pulled back).

Author: Brent Nyitray

In the physical sciences, knowledge is cumulative. In the financial markets, it is cyclical View all posts by Brent Nyitray