Uncertainty Presents Risk to Mortgage Investors

first_img Tagged with: Bloomberg MBS Risk The uncertainty of the presidential election—however long that lasts—is bound to incite interest rate volatility, something that presents a peril to the mortgage-backed securities (MBS) market, according to Christopher Maloney, a market strategist and former portfolio manager who writes for Bloomberg.In October, volatility surged 76%. Last Friday it closed higher than it has since April 23, and experts say it could keep rising. Morgan Stanley analysts called the election “a 2.5 times vol multiplier,” he noted, adding that, “This may hurt MBS investors, as the chance of a borrower having an incentive to refinance is in part a function of interest rate volatility over the life of the loan. Homeowners refinancing mortgages give money back earlier than expected and at par, which would trigger a loss for those who purchased the securities at a premium.”In October, mortgages recorded a positive excess return of 12%, even though they were on a path halfway through the month to produce a loss.Writes Maloney, “The Federal Reserve’s support of the mortgage sector … undoubtedly played a role in helping it to end the month with a gain.”While the index overall ended with an excess-return gain of 12%, “the Fed’s most favored coupon, the UMBS 30-year 2%, saw an excess return of 38%. Of the central bank’s $113 billion MBS purchases last month, that coupon alone made up 46% of the total,” he wrote.Maloney goes on to explain why the current indecision could impact MBS risk in the period to come.”Despite the Fed’s continued support, this presidential election brings with it more uncertainty than any seen in decades. Investors like uncertainty least of all.”MBS analysts at NOMURA warned on Friday that an interest rate volatility hike, post election, is a key near-term risk, according to Maloney, whose article can be read in full on Bloomberg | Quint. Christina Hughes Babb is a reporter for DS News and MReport. A graduate of Southern Methodist University, she has been a reporter, editor, and publisher in the Dallas area for more than 15 years. During her 10 years at Advocate Media and Dallas Magazine, she published thousands of articles covering local politics, real estate, development, crime, the arts, entertainment, and human interest, among other topics. She has won two national Mayborn School of Journalism Ten Spurs awards for nonfiction, and has penned pieces for Texas Monthly, Salon.com, Dallas Observer, Edible, and the Dallas Morning News, among others. Home / Daily Dose / Uncertainty Presents Risk to Mortgage Investors Share Save The Best Markets For Residential Property Investors 2 days ago Demand Propels Home Prices Upward 2 days ago Uncertainty Presents Risk to Mortgage Investors Data Provider Black Knight to Acquire Top of Mind 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days ago About Author: Christina Hughes Babb Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Sign up for DS News Daily center_img The Week Ahead: Nearing the Forbearance Exit 2 days ago Previous: ‘Shaky’ Economy Hasn’t Slowed Rise in Home Equity Next: Nonprofit Calls on Policymakers to ‘Act Now for Housing’ Servicers Navigate the Post-Pandemic World 2 days ago Bloomberg MBS Risk 2020-11-05 Christina Hughes Babb in Daily Dose, Featured, News Demand Propels Home Prices Upward 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days ago November 5, 2020 15,376 Views  Print This Post Related Articles Subscribelast_img read more

O’Driscoll focused on Six Nations

first_img Ireland’s stalwart centre is desperate to get on with life after the British and Irish Lions, though, and certainly the furore over being dropped by head coach Warren Gatland on last year’s tour Down Under. Ireland open their RBS 6 Nations campaign by hosting Scotland in Dublin on Sunday before taking on Wales six days later. Press Association Wales boss Gatland was pilloried for dropping O’Driscoll for the Lions’ final Test in Australia before a 41-16 landslide victory to claim the series offered vindication. The row has rumbled on, though, with Gatland admitting last week he jokingly asked O’Driscoll to influence the Aviva Stadium crowd not to boo him. O’Driscoll remains unsure about a career in coaching but is quite clear he has no interest in any lingering Lions pantomime. “What happened, happened, no one can change it,” said the 35-year-old. “I don’t have any ill-will towards Warren. “When it was raw afterwards your emotions are a bit different. Time does heal all wounds and I don’t have any animosity towards him. “What I will look towards is just trying to be involved in a team that can potentially beat his team, but that’s next week. “The coaching thing at the moment doesn’t really float my boat. “Before Christmas I started thinking too much about the afterlife. There’s no rush. “I’ll just enjoy the Six Nations and hopefully the knock-out parts of the Heineken Cup. “Hopefully I can try to win some silverware, and once the season’s done and dusted and the boots are finally hung up, there will be plenty of time to think about what the next plan is. “I don’t want to look back in a year’s time and regret not having given this time everything. That’s why I’m focusing solely on rugby and all other thoughts are on the backburner.” Hailing boss Joe Schmidt as crucial to Ireland’s chances of a successful Six Nations, O’Driscoll admitted it is important the country develop home-grown frontline coaches, even if he does not eventually number among them. Lock Leo Cullen will step into the Leinster backroom next season, with O’Driscoll backing the former Ireland enforcer to flourish. “I think Joe’s brought a lot of his traits that we’ve seen over the years into this job,” said O’Driscoll. “That’s what got him promoted to this job. “But like all good coaches he’s always trying to evolve, he’s a big thinker of the game. “I don’t know anyone who would do more analysis than Joe Schmidt. He has an insatiable appetite for the game, you can see it in everything he does. “We have strict timelines to how long we spend on the park. You’ve got that time to get it right, so get it right. “That mentality switches into the players very quickly. “I think it’s important we get some Irish coaches, we have some great thinkers in the game, and Leo Cullen’s definitely one of them. “Physically he might not be in the condition he was a few years ago, but because he’s so smart and such a clever player, he identifies short cuts, and I think he’ll have an awful lot to offer from a coaching perspective.” O’Driscoll wrestled with retirement this time last season and decided against it. Reaffirming his commitment to quit in the summer come what may, the 128-cap centre revealed no torment over his future has cleared his mind for the tournament ahead. “I was really unsure last year and it was strange emotions,” said the former Ireland skipper. “It’s nice knowing you can empty the tank in this Six Nations knowing it will be the last. “From my own point of view it’s probably a little less stressful. “It’s probably easier to be a leader when you don’t have the captain’s armband than when you do have it, there’s less expected of you. “And when you’re not captain I think there is an extra onus on you to make sure you are helping out and you’re sharing that workload. “So I will always try to give Paul O’Connell a dig-out wherever I can, just take a little stress off him being the only voice.” Brian O’Driscoll has postponed all decisions about life after rugby until he retires at the end of the season.last_img read more