Stocks are higher as we round out an exceptionally strong quarter for equities. The NASDAQ is up some 20%. Bonds and MBS are flat.
The national delinquency rate rose 15 basis points in May, according to the ICE First Look. Part of this was due to a statistical anomaly. Overall DQ rates rose 4.5% MOM, which is in line with historical seasonal trends.
“While the headline increase in delinquencies may draw attention, the underlying performance picture is stable as delinquencies remain below January 2020 levels,” said Andy Walden, Head of Mortgage and Housing Market Research at ICE. “The rise in early-stage delinquencies and the month-over-month decline in cures were largely driven by the Sunday month-end, which causes many mortgage payments to be processed the following business day. The more important trend to watch remains the continued growth in serious delinquencies and active foreclosures, particularly among FHA loans.”
Long-term delinquency rates and foreclosure starts improved, while prepays slowed.
New York City froze rents for rent-controlled apartments. This won’t affect non-rent controlled apartments, so this should be irrelevant for most DSCR loans. That said, this move demonstrates a hostility to real estate investors that lenders are sure to notice. We do see some DSCR aggregators who won’t lend in the 5 boroughs.
The Supreme Court ruled that Trump cannot fire Fed President Lisa Cook over mortgage fraud allegations. Writing for the majority, Chief Justice John Roberts contended that, if the Trump administration were correct, it “would in effect transform the Federal Reserve’s for-cause protection into at-will employment—an interpretive leap out of step with the statute Congress enacted and our Nation’s tradition of central banking protected from political interference.”
This ruling gives new Fed Chairman Kevin Warsh more leeway to hike rates if need be.
