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Memphis, TN  38119

901.261.5900 Main | 800.664.5635 

MBS

1/171 – New housing starts soared in December to 13-year highs. December saw construction begin on 1.61 million new homes. That number is up 16.9% from last month, and 40.8% from last year. Economists surveyed by Reuters projected that only 1.375 million new homes would be built. New home building is exactly what the US economy needs to pull itself out of a rut. We have lower interest rates, lower unemployment, and increased wages to thank for these greatly improved housing numbers. Industrial production’s monthly report did not bring the same stellar news this morning. While manufacturing output, the biggest component of industrial production, increased by 0.2% in December, we saw a 5.6% decline in utility output this December. The sharp drop can be credited to an unseasonably warm December, that saw decreases in heating demands. These numbers are encouraging overall, and with a phase one trade deal with China finally in place, we will likely see greater improvements over the next year. 


Let’s send you into the weekend with some key figures. Three-month and ten-year treasuries are currently yielding 1.52% and 1.83%, respectively. When it comes to mortgages, we are seeing thirty-year fixed-rate mortgages with 3% coupon rates trading at $101-20 and yielding 2.65% with a spread of +98. That’s all we have to report today. Remember, we trade MBS, CRA, SBA, USDA, and whole loan products. If you want to get involved in this exciting market, give us a call or shoot us an email. We’d love to get to know you. Have a great weekend!

Mortgage Backed Securities

Five Minute Maturity

Check out this video regarding Mortgage Backed Securities. 

Hanover Securities Cherry Picks

January 6, 2020

ARMS / FLOATERS

Cost:

Average Life:

Yield:

Speed:

Spread:

Coupon:

WAM:

Loans:

Factor:

Caps:

Floor:

1 Yr. Libor

$10mm+ Fannie Mae 5/1 ARM 3.30% #CA3948 7/49 stated final

$102-17+

3.0 yr

2.36%

15% CPB

+72/Z curve

3.30%

352

76

.8865

2/2/5

1.604

+1.600

10 YEAR FIXED

Cost:

Average Life:

Yield:

Speed:

Spread:

Coupon:

# Loans:

Origination:

Type:

WAM:

Factor:

$103-10+

3.9 yr

2.04%

154 PSA

+54/I curve

3.0%

238

2018/2019

Fannie Major

108

.8519

$1.4mm+ Fannie Mae 10yr am 3.00% #MA3710  6/29 stated final

15 YEAR FIXED

Cost:

Average Life:

Yield:

Speed:

Spread:

Coupon:

# Loans:

Origination:

Type:

WAM:

Factor:

$101-10+

4.9 yr

2.18%

224 PSA

+53/I curve

3.5%

10,413

2019

Fannie Major

177

.9858

$10mm+ Fannie Mae Dwarf 2.50% #MA3864 11/34 stated final

20 YEAR FIXED

Cost:

Average Life:

Yield:

Speed:

Spread:

Coupon:

# Loans:

Origination:

Type:

WAM:

Factor:

$102-22

5.8 yr

2.46%

221 PSA

+76/I curve

3.0%

4,822

2019 origination

Fannie Major

238

.9958

$9mm+ Fannie Mae 20yr am 3.00% 

#MA3890  1/40 stated final

30 YEAR FIXED

Cost:

Average Life:

Yield:

Speed:

Spread:

Coupon:

# Loans:

Origination:

Type:

WAM:

Factor:

$103-05

5.1 yr

2.77%

300 PSA

+111/I curve

3.5%

24,354

2019

FNMA Major

350

.8498

$10mm Fannie Mae 30 yr am 3.50% #MA3686     6/49 stated final

AGENCY CMBS

Cost:

Average Life:

Yield:

Speed:

Coupon:

Call Protection:

Tier

GEO:

DSCR:

LTV:

OCC:

Factor:

$103-04+

7.3 yr

2.49+78/swaps

0% CPY

2.94%

32 mo Yield Maintenance

2

TX

1.84x

74.2%

95.1%

1.0000

$10mm FNMA 10/5  DUS #AN6540

2.94% coupon     9/2027 stated final

AGENCY CMO - 3 YEAR

Cost:

Average Life:

Yield:

Speed:

Spread:

Collateral:

Coupon:

Band:

Avg Life:

      w/ rates +300:

Factor:

$101-29

3.0 yr

2.27%

257 PSA

+68/I curve

FNMA 30yr 3.00%

Jumbo Sequential

3.00%


5.9 yr 

.9932

$10mm Fannie Mae  Sequential 3.00% 

#FNR 2019-79 CA   1/43 stated final

AGENCY CMO - 5 YEAR

Cost:

Average Life:

Yield:

Speed:

Spread:

Collateral::

Coupon:

Band:

Avg Life:

   w/ rates +300

Factor:

$102-31+

5.4 yr

2.36%

226 PSA

+68/I curve

Seasoned 30yr 4%

3.0%

none


8.7 yr 

.9030

$10mm+ Freddie Mac Pass-Thru 3.00% 

#FHR 4905 CA     8/49 stated final

AGENCY CMO - LONG END

Cost:

Average Life:

Yield:

Speed:

Spread:

Collateral:

Coupon:

Band:

Avg Life:

  w/ rates +300

IO till:

Factor:


$102-25

15.1 yr

2.77%

300 PSA

+80/I curve

New Fannie  30yr 3.50%

3.0%

92-214 PAC


17.9 yr 

3/2031

1.0000

$9mm Fannie Mae  AD PAC 3.00% 

#FNR 4943 MB     1/50 stated final

Jim Tait is a registered representative with, and offers securities through Hanover Securities, Inc. (Hanover), Member FINRA & SIPC. Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Securities which may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results.


This information from Hanover Securities is for your private use and does not constitute an offer or solicitation with respect to the sale of any security. This information was obtained from sources we believe to be reliable but we do not represent that it is accurate or complete, and it should not be relied on as such. Certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in securities identical or related to those identified herein. 


Although this information has been obtained from sources we believe reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. This is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Loans and/or Securities which may be shown are subject to availability and changes in price. Past performance is not indicative of future results. Changes in any assumptions may have a material effect on projected results. This information from Banes Capital Group (BCG) and/or Hanover Securities is for your private use, and was obtained from sources we believe to be reliable. However, we do not represent that this information is accurate or complete, and it should not be relied on as such. This information is for institutional investors only, and as such certain transactions may give rise to substantial risk and are not suitable for all investors. This information was based on current market indicators which may vary over time. We may from time to time buy or sell, or have long or short positions in loans or securities identical or related to those identified herein. 


The pricing of loans or any Level II or III asset is inherently an exercise in quantifying uncertain variables. As such, great care should be taken when pricing loans for reporting purposes. The information included herein should never be taken as the sole method, or even a method to be relied on, for the pricing of loans or other Level II or III assets as this is for informational purposes only.

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