Mortgage Market Update – November 26th, 2018

Recent Events Recap

Hi guys. Hope everyone had a nice Thanksgiving and are ready for the final push into year end. Markets have been on an interesting ride for the last week or so, much of it likely do to lightly staffed trading desks and subpar liquidity around the holiday. Risk markets have been hammered, with the Dow and S&P down around 4% in just a few sessions. The move lower in equities has been led by the FAANGs – that is Facebook, Apple, Amazon, Netflix, and the company formerly known as Google (now known as Alphabet)—which only a short while ago were responsible for pulling major indices to new all-time highs. These are stocks that a huge number of main street Americans own in their retirement portfolio, either directly or through the ever-popular index funds. Given their respective market caps, these stocks comprise a large percentage of total stock market funds so while casual investors may believe they are diversified, they are quickly learning that they are not. However, it was not just the tech stocks that have struggled, but retailers and banks have not performed well either.

Treasuries and Mortgages

So, given the bludgeoning that equities experienced last week, your textbooks would tell you that Treasuries must have done very well as investors sought safe haven assets while moving out of risk. That is not what we saw. In fact, Treasury yields ended the week within a basis point or two from where they began. I believe the reason for this is largely technical in nature. There is a big technical barrier in the 3.04% to 3.06% zone for the 10yr, and after moving all the way down from 3.25% in weeks prior, it feels like momentum has sort of petered out. I suspect we will see a period of consolidation, or maybe even a bit of a retracement back to slightly higher yields before taking another run lower. I really believe we will see a 2-handle on the 10yr in the near future. In fact, Morgan Stanley’s research group is just out with their outlook for 2019, and they are calling for 10s to be around 2.75% by the end of next year.

Mortgages performed poorly last week as current coupon prices were actually lower (rates were higher) week over week, and this really was a function of poor liquidity. If we see some consolidation in Treasuries, investor interest in mortgages should pick up.

Forecasting

This week is going to be really important for defining market sentiment heading into year end. Not only will the minutes from the most recent FOMC meeting be released on Thursday, but Fed Chair Jay Powell has a scheduled speech for Wednesday at the Economic Club of New York. Economists and investors alike are beginning to call for a more dovish Fed and are eager to see if Powell shifts his tone. Odds of a 25-basis point rate hike are still pretty high for the December meeting, but they are creeping lower. The G20 is also gathering this week, and President Trump and Chinese President Xi are expected to meet on trade.

Equities are starting the week on positive footing and rates have moved very modestly higher. Stay nimble and good luck out there.

Hance Thurston
Head of Capital Markets, Southern Trust Mortgage

Have questions about the mortgage market or looking to start the homebuying journey? Get started by contacting a local Southern Trust expert. We are standing by to help!

Clayton Hicks appointed SVP/Regional manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of Clayton Hicks as SVP / Regional Manager based out of Virginia Beach, Virginia. A resident of Hampton Roads and a seasoned mortgage professional, Clayton’s clients, partners, and colleagues rely on his valuable knowledge and experience. As Regional Manager, Clayton will oversee a growing group of loan officers in the Hampton Roads area and will build the impact and awareness of Southern Trust Mortgage.

Clayton and his team at Southern Trust Mortgage understand the unique challenges of the mortgage industry. As a Virginia Beach-based regional manager, Clayton works to constantly embrace new technology, employ the best within the industry, and ensure that each loan officer at Southern Trust Mortgage grows and elevates their business.

“Clayton brings a wealth of knowledge and a leadership style that breeds loyalty. He gets the best out of his team by leading from the front. We know he’ll do great things with Southern Trust”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!

Mortgage Market Update – November 13th, 2018

FOMC and Rate Update

Hi guys. We are coming off an extremely event-filled week with both the mid-term elections and the November FOMC meetings taking place, both of which had the potential to materially influence market sentiment. However, anybody making a volatility play last week was likely left disappointed. Heading into the elections, pollsters were calling for Democrats to pick up enough seats in the House to earn a majority while losing a couple of seats in the Senate. Clearly, the credibility of pollsters had suffered given the results of the last few elections—most notably the 2016 presidential election—but this time they largely got it right. Markets barely had time to take a sigh of relief before turning to the Fed’s rate decision, but this too proved a bit anticlimactic. The policy statement was essentially a cut and paste from the last meeting and they left rates unchanged as expected. Fed officials did reiterate the need for future rate increases, and markets continue to price in one more 25 basis point rate hike in December and then about three hikes next year. So what was the market’s response to last week’s activity? Well, the 10yr yield opened the week at 3.19% and closed out on Friday at 3.18% while equities were generally higher. This does mask a few whippy trading sessions intra-week, but the overall sentiment is roughly unchanged.

Forecasting

Looking ahead, this upcoming week does bring a couple of key data points even if it is lacking a true headliner. The Consumer Price Index will be out on Wednesday and is expected to mirror the uptick we saw in the Producer Price index last week. Inflation definitely seems to be edging higher which will only embolden the Fed to continue this tightening cycle. Retail Sales is the other important release and comes out on Thursday. Market participants who were left wanting more after last week’s FOMC meeting will likely tune in Wednesday evening to hear Fed Chair Jay Powell give a speech on the economy at an event in Dallas. Don’t expect him to make a big policy shift here, but even a change in nuance could result in a tradeable event.

Rates are stuck in a range and the 10yr seems capped at 3.25%. In my opinion, it will take something on the order of a trade deal with China for yields to punch through that level. Bond markets are closed today in observance of Veteran’s Day. We at Southern Trust are open for business but to all of our vets out there from the bottom of our hearts, thank you for your service. Have a great week everyone.

Hance Thurston
Head of Capital Markets, Southern Trust Mortgage

Have questions about the mortgage market or looking to start the homebuying journey? Get started by contacting a local Southern Trust expert. We are standing by to help!

Robert O’Bday appointed SVP/Regional manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of Robert O’Bday as SVP / Regional Manager based out of Charlotte, North Carolina. Robert and his teams at Southern Trust Mortgage understand the unique challenges of the mortgage industry. As a Charlotte-based regional manager, Robert works to constantly embrace new technology, employ the best within the industry, and ensure that each loan officer at Southern Trust Mortgage grows and elevates their business. Robert provides his team with the tools they need to focus on building their business.

Robert has served on the Board of Directors for many Industry Associations, is 2010 thru 2018 President Club Honoree and a 23-year resident of Charlotte. As Regional Manager, Robert and his partner Ritchie Love make all decisions locally. When you need a quick answer, look no further than down the hall.

“Robert is a proven leader and continues to show it year after year. We know he’ll thrive and accomplish even greater things with us at Southern Trust”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!

Sam Meekins appointed Branch Manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of Sam Meekins as Branch Manager based out of Virginia Beach, Virginia. A seasoned mortgage professional and loan officer, Sam’s clients, partners, and colleagues rely on his valuable knowledge and experience. Sam and his team at Southern Trust Mortgage understand the unique challenges of the mortgage industry. As a branch manager, Sam consistently exercises his premium level of care and expertise, as he helps move borrowers forward to their dream of home ownership.

“Sam is not only an excellent loan officer, he’s a true leader. He brings the best out of everyone he works with and we know he’s going to thrive on the Southern Trust team”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!

George W. Cooper III (Trey) appointed Sales Manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of George W. Cooper III (Trey) as Sales Manager based out of Glen Allen, Virginia. A proven mortgage professional and loan officer, Trey’s valuable knowledge and experience is something his clients, partners, and colleagues rely on. Trey and his team at Southern Trust Mortgage understand the unique challenges of the mortgage industry. As a sales manager, Trey works to constantly embrace new technology, employ the best within the industry, and ensure that each loan officer at Southern Trust Mortgage grows and elevates their business.

“Trey is an incredible asset on any team, so naturally, we’re thrilled he’s joined the Southern Trust family. He gets the job done so well that his colleagues, partners, and buyers can’t help but spread the word”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!

Ritchie Love appointed SVP/Regional manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of Ritchie Love as a SVP / Regional Manager based out of Charlotte, North Carolina. Ritchie is responsible for growing Southern Trust Mortgage in the NC, SC, TN and GA regions. His experience and finance background allow him to educate, inspire and lead loan officers to success. Prior to his role as a regional manager, Ritchie spent 19 years as a successful loan officer.

Ritchie and his team at Southern Trust Mortgage understand the unique challenges of the mortgage industry. As a Charlotte-based regional manager, Ritchie works to constantly embrace new technology, employ the best within the industry, and ensure that each loan officer at Southern Trust Mortgage grows and elevates their business. Ritchie provides his team with the tools they need to focus on building their business.

“Ritchie is a huge asset to Southern Trust Mortgage. His experience and leadership is key to our continued success and growth in the Carolinas, Tennessee, and Georgia”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!

Steve Sager appointed SVP/Regional manager at Southern Trust Mortgage

Southern Trust Mortgage is proud to announce the addition of Steve Sager as the VA SVP / Regional Manager based out of Virginia Beach, Virginia. A resident of Hampton Roads and a seasoned mortgage professional for over 20 years, Steve’s clients, partners, and colleagues rely on his valuable knowledge and experience. As Regional Manager, Steve will oversee a growing group of loan officers in the Virginia and Outer Banks, NC area and will build the impact and awareness of Southern Trust Mortgage. Steve works to constantly embrace new technology, employ the best within the industry, and ensure that each loan officer at Southern Trust Mortgage grows and elevates their business.

“I’ve worked with and trusted Steve for years. His leadership and ability to foster growth with loan officers in undeniable. We’re fortunate to have him with us at Southern Trust”.
– Jack Lane, President of Southern Trust Mortgage

Southern Trust Mortgage (STM) is uniquely positioned as a mortgage lender by having strong internal leadership, structure, and vision, as well as being backed by an established bank. As a strong purchase company, Southern Trust Mortgage offers a wide variety of loan programs and down payment assistance programs.

Southern Trust Mortgage strives to set its loan officers up for successful transactions with clients, Realtors, and builder partners. The marketing department at Southern Trust Mortgage offers tailored print, digital, and video branding and co-branding options. With an in-house operational staff, all processing and underwriting decisions are made locally, with a focus on a team approach to ensure successful loan settlements.

Have questions about joining our team? We’d love to have a no-pressure, discovery conversation with you. Visit our Sales Careers Website to learn more!