Connect with us

Government

The secondary market is primed to rise in 2022

Projecting the outlook for the housing market in the coming year, including prospects for the secondary market for mortgage-backed securities, can be an exercise in crystal-ball gazing, but one indicator key to bringing clarity to that crystal ball is…

Published

on

This article is part of our HousingWire 2022 forecast series. After the series wraps early next year, join us on February 8 for the HW+ Virtual 2022 Forecast Event. Bringing together some of the top economists and researchers in housing, the event will provide an in-depth look at the predictions for next year, along with a roundtable discussion on how these insights apply to your business. The event is exclusively for HW+ members, and you can go here to register.

Projecting the outlook for the housing market in the coming year, including prospects for the secondary market for mortgage-backed securities, can be an exercise in crystal-ball gazing, but one indicator key to bringing clarity to that crystal ball is the direction of interest rates.

All signs point to continuing upward pressure on interest rates in 2022. Assuming COVID-19 is managed well, the overall economy is expected to continue expanding, with that growth and the still-unwinding pandemic-related supply-chain issues helping to fuel inflation. To address those pressures, the Federal Reserve has signaled it will pursue monetary policy that pushes interest rates up modestly over the course of the next year.

“The economy is steadily recovering, and inflation is kicking higher,” said Lawrence Yun, chief economist at the National Association of Realtors. “Mortgage rates will steadily rise, possibly to 3.3% by the year-end [2021] and maybe even as high as 3.7% by the end of 2022.”

With rates rising, housing-finance experts expect the focus to shift away from the refinance market and toward purchase loans. That bodes well for those engaged in trading whole loans and mortgage-servicing rights (MSRs), both of which are bought and sold in the secondary market.

“As the economy begins to show improvement and moratoriums are lifted on foreclosures, the forecast is for the re-performing loan market to maintain a high volume for many months to come,” said Tom Piercy, managing director of Incenter Mortgage Advisors.

“The jumbo-loan market has expanded too as we’ve seen property values increase nationwide. It’s difficult to quantify per se, but the appetite for jumbo loans has increased significantly.”

On the MSR front, the market also is expected to remain robust as interest rates rise, which increases MSR values. That’s because loan prepayment speeds slow when refinancing ebbs. Fewer loan prepayments via refinancing ensures that MSR assets — which represent a slice of the interest on a mortgage — will have a longer cash-flow life for investors.

“I believe the first and second quarters next year will be quite busy,” said Azad Rafat, MSR senior director at Mortgage Capital Trading Inc. As rising interest rates cool the refinance market, replacing that lost volume through home-purchase loan growth will be largely dependent on expanding the guardrails around mortgage origination, some industry veterans argue.

John Toohig, managing director of whole loan trading at Raymond James, said as rates inch upward, closer to 4%, originators will be under pressure to find more volume outside refinancing and the con-forming-loan space dominated by Freddie Mac and Fannie Mae. If that happens, Toohig said, it will provide a “natural boost for private-label securitization” — which is the private-sector secondary market that issues and sells securities without government guarantees.

“Can you find more volume in a bank-statement loan or an asset-depletion loan?” Toohig asked. “There’s non-QM, or can you go to that Jumbo 2.0 loan, and instead of a 700 FICO [credit] score, can you make it work at 660 or 680?

“Are you willing to do that? Can you maybe look at 85% as opposed to an 80% loan-to-value [ratio]? That’s going to be where you’re going to have to find your loan growth if we agree that we’re in a rising-rate environment.”

Overall, for investors in the secondary market as well as for the host of industry players in the owner-occupied and rental housing markets, 2022 should be a strong year, said Rick Sharga, executive vice president of marketing for RealtyTrac. It will be driven by demographics — specifically the millennials, most of whom are now coming of age as first-time homebuyers, Sharga said. But the one factor that could undermine a robust economy in 2022 is inflation.

“The thing that could derail us is if we had an economic downturn, and the most likely scenario I see there is that inflation continues to run hotter than the Federal Reserve would prefer,” Sharga said. “Typically, historically, when the Fed hits the brakes, it tends not to be a smooth, controlled stop, and [the economy] can slide off to the side of the road.”

The changing mortgage-finance environment and the unknowns ahead also highlight the need to address perennial issues in the housing market, chief among them risk management and housing- finance reform.

“House prices have been continuing to soar, but the GSEs, still backed directly by the taxpayers, continue to dominate the secondary market,” said Ed DeMarco, president of the Housing Policy Council, a group at the center of those discussions. “The Fed also is sending signals of a general expectation of rising interest rates, which presumably will cool the refinance market… And so, you take these things together, we think that paying attention to the risks in the marketplace is essential.”

Among the tools that DeMarco said will be key in dealing with the distribution of risk in the year ahead is the GSEs’ use of credit-risk transfers, as well as data standardization and transparency, the common securitization platform as well as the modernization of Ginnie Mae. And essential to promoting the future growth of a vibrant private-label market for issuing and selling residential mortgage-backed securities, DeMarco added, is getting Congress to act quickly on better defining the contours of the government’s space in the mortgage market.

“Congress can set the parameters for the future — not just what is the government’s role, but where that role ends,” said DeMarco. “That will allow the private market to have greater certainty about investments that it can make in this space.”

This article was first featured in the Dec/Jan HousingWire Magazine issue. To read the full issue, go here.

The post The secondary market is primed to rise in 2022 appeared first on HousingWire.

Read More

Continue Reading

Government

“The Real President Is Whoever Controls The Teleprompter”: Musk Delivers Scathing Criticism Of Biden

"The Real President Is Whoever Controls The Teleprompter": Musk Delivers Scathing Criticism Of Biden

Authored by Jack Phillips via The Epoch…

Published

on

"The Real President Is Whoever Controls The Teleprompter": Musk Delivers Scathing Criticism Of Biden

Authored by Jack Phillips via The Epoch Times,

Tech billionaire Elon Musk this week warned that the United States must take steps to address inflation or it will end up like socialist Venezuela.

Musk, who is currently in the process of acquiring Twitter, told a virtual conference that he believes the government has printed too much money in recent years.

“I mean, the obvious reason for inflation is that the government printed a zillion amount of more money than it had, obviously,” Musk said, likely referring to COVID-19 relief stimulus packages worth trillions of dollars that were passed in recent years.

U.S. inflation rose by 8.3 percent in April, compared with the previous year. That’s slightly lower than the 8.5 percent spike in March, but it’s still near the 40-year high.

“So it’s like the government can’t … issue checks far in excess of revenue without there being inflation, you know, velocity of money held constant,” the Tesla CEO said.

“If the federal government writes checks, they never bounce. So that is effectively creation of more dollars. And if there are more dollars created, then the increase in the goods and services across the economy, then you have inflation, again, velocity of money held constant.”

If governments could merely “issue massive amounts of money and deficits didn’t matter, then, well, why don’t we just make the deficit 100 times bigger,” Musk asked. “The answer is, you can’t because it will basically turn the dollar into something that is worthless.”

“Various countries have tried this experiment multiple times,” Musk said.

“Have you seen Venezuela? Like the poor, poor people of Venezuela are, you know, have been just run roughshod by their government.”

In 2018, Venezuela, a country with significant reserves of oil and gas, saw its inflation rise more than 65,000 percent amid an economic crash that included plummeting oil prices and government price controls. The regime of Nicolas Maduro then started printing money, thereby devaluing its currency, which caused prices to rapidly increase.

During the conference, Musk also said the Biden administration “doesn’t seem to get a lot done” and questioned who is actually in charge. 

“The real president is whoever controls the teleprompter,” he said.

“The path to power is the path to the teleprompter.”

“The Trump administration, leaving Trump aside, there were a lot of people in the administration who were effective at getting things done,” he remarked.

Musk’s comment about the White House comes as Jeff Bezos, also one of the richest people in the world, has increasingly started to target the administration’s economic policies. Bezos, in a series of Twitter posts, said the rapid increase in federal spending is the reason why inflation is as high as it is.

“Remember the Administration tried their best to add another $3.5 TRILLION to federal spending,” Bezos wrote on Monday, drawing rebuke from several White House officials. “They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high.”

Tyler Durden Tue, 05/17/2022 - 15:05

Read More

Continue Reading

Spread & Containment

Type-I interferon stops immune system ‘going rogue’ during viral infections

Hamilton, ON (May 17, 2022) – McMaster University researchers have found not only how some viral infections cause severe tissue damage, but also how…

Published

on

Hamilton, ON (May 17, 2022) – McMaster University researchers have found not only how some viral infections cause severe tissue damage, but also how to reduce that damage.

Credit: Georgia Kirkos/McMaster University

Hamilton, ON (May 17, 2022) – McMaster University researchers have found not only how some viral infections cause severe tissue damage, but also how to reduce that damage.

 

They have discovered how Type I interferon (IFN) stops the immune system ‘going rogue’ and attacking the body’s own tissues when fighting viral infections, including COVID-19.

 

Their paper was published in the journal PLOS Pathogens today.

  

Senior author Ali Ashkar said IFN is a well-known anti-viral signalling molecule released by the body’s cells that can trigger a powerful immune response against harmful viruses.

 

“What we have found is that it is also critical to stop white blood cells from releasing protease enzymes, which can damage organ tissue. It has this unique dual function to kick start an immune response against a viral infection on the one hand, as well as restrain that same response to prevent significant bystander tissue damage on the other,” he said.

 

The research team investigated IFN’s ability to regulate a potentially dangerous immune response by testing it on both flu and the HSV-2 virus, a highly prevalent sexually transmitted pathogen, using mice. Data from COVID-19 patients in Germany, including post-mortem lung samples, was also used in the study.

 

“For many viral infections, it is not actually the virus that causes most of the tissue damage, it is our heightened immune activation towards the virus,” said Ashkar, a professor of medicine at McMaster.

  

First co-author of the study and PhD student Emily Feng said: “Our body’s immune response is trying to fight off the virus infection, but there’s a risk of damaging innocent healthy tissue in the process. IFNs regulates the immune response to only target tissues that are infected.

 

“By discovering the mechanisms the immune system uses that can inadvertently cause tissue damage, we can intervene during infection to prevent this damage and not necessarily have to wait until vaccines are developed to develop life-saving treatments,” she added.

 

“This applies not just to COVID-19, but also other highly infectious viruses such as flu and Ebola, which can cause tremendous and often life-threatening damage to the body’s organs,” said first study co-author Amanda Lee, a family medicine resident. 

 

Ashkar said the release of harmful proteases is the result of a ‘cytokine storm’, which is life-threatening inflammation sometimes triggered by viral infections. It has been a common cause of death in patients with COVID-19, but treatment has been developed to prevent and suppress the cytokine storm.

 

Ashkar said that steroids like dexamethasone are already used to rein in an extreme immune response to viral infections. The authors used doxycycline in their study, an antibiotic used for bacterial infections and as an anti-inflammatory agent, inhibits the function of proteases causing the bystander tissue damage.

 

Lee added: “This has the potential in the future to be used to alleviate virus-induced life-threatening inflammation and warrants further research.” 

 

The study was funded by the Canadian Institutes of Health Research.

 

-30-

 

Editors:

Pictures of Ali Ashkar and Emily Feng may be found at https://bit.ly/3wmSw0D

  

 

 


Read More

Continue Reading

Spread & Containment

mRNA vaccines like Pfizer and Moderna fare better against COVID-19 variants of concern

A comparison of four COVID-19 vaccinations shows that messenger RNA (mRNA) vaccines — Pfizer-BioNTech and Moderna — perform better against the World…

Published

on

A comparison of four COVID-19 vaccinations shows that messenger RNA (mRNA) vaccines — Pfizer-BioNTech and Moderna — perform better against the World Health Organization’s variants of concern (VOCs) than viral vector vaccines — AstraZeneca and J&J/Janssen. Although they all effectively prevent severe disease by VOCs, the research, publishing May 17th in the open access journal PLOS Medicine, suggests that people receiving a viral vector vaccine are more vulnerable to infection by new variants.

Credit: Carlos Reusser Monsalvez, Flickr (CC0, https://creativecommons.org/publicdomain/zero/1.0/)

A comparison of four COVID-19 vaccinations shows that messenger RNA (mRNA) vaccines — Pfizer-BioNTech and Moderna — perform better against the World Health Organization’s variants of concern (VOCs) than viral vector vaccines — AstraZeneca and J&J/Janssen. Although they all effectively prevent severe disease by VOCs, the research, publishing May 17th in the open access journal PLOS Medicine, suggests that people receiving a viral vector vaccine are more vulnerable to infection by new variants.

By March 2022, COVID-19 had caused over 450 million confirmed infections and six million reported deaths. The first vaccines approved in the US and Europe that protect against serious infection are Pfizer-BioNTech and Moderna, which deliver genetic code, known as mRNA, to the bodies’ cells, whereas Oxford/AstraZeneca and J&J/Janssen are viral vector vaccines that use a modified version of a different virus — a vector — to deliver instructions to our cells. Three vaccines are delivered as two separate injections a few weeks apart, and J&J/Janssen as a single dose.

Marit J. van Gils at the University of Amsterdam, Netherlands, and colleagues, took blood samples from 165 healthcare workers, three and four weeks after first and second vaccination respectively, and for J&J/Janssen at four to five and eight weeks after vaccination. Samples were collected before, and four weeks after a Pfizer-BioNTech booster.

Four weeks after the initial two doses, antibody responses to the original SARS-CoV-2 viral strain were highest in recipients of Moderna, followed closely by Pfizer-BioNTech, and were substantially lower in those who received viral vector vaccines. Tested against the VOCs – Alpha, Beta, Gamma, Delta and Omicron – neutralizing antibodies were higher in the mRNA vaccine recipients compared to those who had viral vector vaccines. The ability to neutralize VOCs was reduced in all vaccine groups, with the greatest reduction against Omicron. The Pfizer-BioNTech booster increased antibody responses in all groups with substantial improvement against VOCs, including Omicron.

The researchers caution that their AstraZeneca group was significantly older, because of safety concerns for the vaccine in younger age groups. As immune responses tend to weaken with age, this could affect the results. This group was also smaller because the Dutch government halted use for a period.

van Gils concludes, “Four COVID-19 vaccines induce substantially different antibody responses.”

#####

In your coverage, please use this URL to provide access to the freely available paper in PLOS Medicine:

http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003991

Citation: van Gils MJ, Lavell A, van der Straten K, Appelman B, Bontjer I, Poniman M, et al. (2022) Antibody responses against SARS-CoV-2 variants induced by four different SARS-CoV-2 vaccines in health care workers in the Netherlands: A prospective cohort study. PLoS Med 19(5): e1003991. https://doi.org/10.1371/journal.pmed.1003991

 

Author Countries: The Netherlands, United States

 

Funding: This work was supported by the Netherlands Organization for Scientific Research (NWO) ZonMw (Vici grant no. 91818627 to R.W.S., S3 study, grant agreement no. 10430022010023 to M.K.B.; RECoVERED, grant agreement no. 10150062010002 to M.D.d.J.), by the Bill & Melinda Gates Foundation (grant no. INV002022 and INV008818 to R.W.S. and INV-024617 to M.J.v.G.), by Amsterdam UMC through the AMC Fellowship (to M.J.v.G.) and the Corona Research Fund (to M.K.B.), and by the European Union’s Horizon 2020 program (RECoVER, grant no. 101003589 to M.D.d.J). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.


Read More

Continue Reading

Trending