BLUELINE Blog

Recent Actions Taken in Response to the COVID-19 Pandemic

The Federal Reserve (FED) has had a busy past few weeks. Since lowering the Fed Funds Rate1 and announcing their first Quantitative Easing (QE)2 actions of this crisis, they have taken several other actions to maintain liquidity and confidence in the economy. Many of these [...]

Market Commentary: Economic Outlook & the Impact of Global Politics

The Federal Reserve has made clear after its last meeting of 2019 that it will be in a holding period for most of 2020 as it assesses the impact of their policy moves on the economy. They will likely use this time to debate how best to respond to the next economic downturn [...]

Market Commentary: The Impact of Lock Pull-Through on Hedge Performance & Profitability

When an interest rate on a mortgage is locked with the borrower, the loan origination process is far from complete or pre-determined. Circumstances may arise that jeopardize the likelihood that the loan will close. The underwriter could find the borrower to be unqualified, a [...]

Market Commentary: The Impact of Rate Movement and Loan Characteristics on Servicing Value

In terms of the secondary market, a mortgage loan is essentially made up of two separate parts, the loan asset and the servicing asset – which may be split up, packaged, and sold separately. The largest of the two pieces is the loan asset, which is cashflow of the loan [...]

Market Commentary: The Impact of Rates, Seasonality, and Appreciation on Mortgage Volumes

Mortgage originations are booming! While this is primarily fueled by the most recent refi boom, there are other aspects to this that, right now, are also favorable and adding fuel to the fire. The loan purpose is one of the main determinants of how volume will be affected by [...]

Market Commentary: Optimal Blue Examines the Mid-Cycle Adjustment

At its July meeting, the Federal Open Market Committee (Fed) cut its baseline interest rate by 0.25%, its first rate cut in more than a decade. Since the last rate cut, they have executed three rounds of Quantitative Easing (QE), significantly reduced the balance sheet from [...]

Market Commentary: Rates Are Falling, Will It Continue?

With the 10-year treasury yield at 2% again, and the Federal Funds Rate (FFR) at 2.5%, it is natural for the rational mind to assume that this cannot go on for much longer. During normal market conditions, the treasury curve slopes upward; typically, short-term treasuries [...]