Mortgage – HousingWire |
- Compass records $100M net loss in Q3
- Regulators done playing nice with mortgage servicers
- Mortgage rates drop below 3% yet again
- Refis prop up mortgage application activity as rates dip
- Rocket blasts off in the private-label market
| Compass records $100M net loss in Q3 Posted: 10 Nov 2021 05:27 PM PST Despite a net loss of $100 million in the third quarter of 2021, Compass CEO Robert Reffkin said he was thrilled with how the brokerage had performed. "I just wanted to say, once again, how pleased I am with our performance this quarter and our outlook of what is still to come," Reffkin said in his closing remarks on the firm’s Q3 earnings call on Wednesday. This net loss is significantly higher than the $7.1 million recorded last quarter and the $14 million loss seen in Q3 2020. Also trending down from the second quarter is the brokerage's market share which fell to 5.4% in Q3 from 6.2% in Q2, a decrease Compass attributes to typical seasonal market fluctuations. Reffkin and CFO Kristen Ankerbrandt, stressed, however, that they firmly believe that the brokerage is on track to achieve profitability in 2022. According to Compass executives, the brokerage will reach this milestone by improving the attach rate of its title and escrow services, launching its joint-venture mortgage services platform OriginPoint during the fourth quarter of 2021, and continuing to expand into more markets. "First, these adjacent services will enhance our long-term profitability profile," Reffkin said during the call. "Second, integrating these services into the platform will empower agents to deliver a more integrated, seamless experience to their clients, contributing to higher attach rates; and third, the best thing about the adjacent service business model is that there’s little to no incremental customer acquisition costs for Compass because our agents already have the client relationship." During September alone, Compass acquired three title and escrow firms, expanding its title services to nine states and Washington, D.C. and bringing in house title capabilities to 47% of the 67 markets the brokerage currently serves. The attach rate, however, still sits at only a "mid-single digit percentage" of the brokerage's total transactions in the third quarter. Meanwhile, OriginPoint, its JV with mortgage lender Guaranteed Rate, has been obtained operation licenses in six states and the company says it is busy hiring loan officers as it prepares to originate its first mortgage in this next quarter, well ahead of the projected start date. One encouraging sign is that the brokerage's revenue grew 47% year-over-year to $1.74 billion thanks to Compass agents closing 62,349 transactions during the third quarter, up 36% from the year prior. This brought the quarter's gross transaction value to $69.1 billion, a third quarter record for the New York-based firm. In addition, Compass increased its number of principal agents by 987 from the second quarter to 11,616. "Our ability to see these operational and financial expectations is a direct result of our intense focus on the agent as our customer," Reffkin said. "Recent turbulence seen by alternative models looking to replace the traditional agent is an important reminder that the agent is not going away. The agent will continue to be at the center of the transaction, controlling $100 billion in annual commissions and being the primary source of referrals for an additional $140 billion in real estate related spends." As the brokerage approaches the end of the year, executives remain positive about where the company is going. "Compass is in the strongest position we’ve ever been in and since going public we’ve done everything we said we would do and we’ve done it faster," Reffkin said. The post Compass records $100M net loss in Q3 appeared first on HousingWire. |
| Regulators done playing nice with mortgage servicers Posted: 10 Nov 2021 01:41 PM PST The federal government’s top regulators announced Wednesday that they are collectively resuming mortgage servicing supervisory and enforcement practices in full, ending certain flexibilities it offered mortgage servicers at the onset of the Covid-19 pandemic. The announcement comes as servicers negotiate with over one million borrowers exiting forbearance plans. Servicers are now expected to fully comply with the rules spelled out in Regulation X, which protects consumers when they apply for and have mortgage loans, the regulators said. In April 2020, the agencies said they would not take action against servicers for failing to meet certain timing requirements in the regulation – for example, a five-day acknowledgment notice in loss mitigation cases – so long as servicers made good-faith efforts, took the related actions, and helped borrowers within a reasonable period of time. "Servicers have had sufficient time to adjust their operations by taking steps to work with consumers affected by the Covid-19 pandemic and developing more robust business continuity and remote work capabilities," the agencies said in a statement. The joint statement includes the Board of Governors of the Federal Reserve, the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency (OCC), and the state financial regulators. Compliance as a Competitive Edge in a Purchase Market Total Expert offers compliance automation to help lenders stay ahead of regulatory requirements and grow their portfolios. Presented by: SnapdocsServicers have negotiated strategies with over four million borrowers in the last 18 months, but around one million homeowners still have active forbearance plans. According to the CFPB, with most of the remaining Covid-19 forbearances expected to expire before the end of the year, struggling homeowners need protection to avoid foreclosure. Rohit Chopra, the director of the CFPB, said that servicers' failures worsened the economic crisis a decade ago. "Regulators have learned their lesson, and we will be scrutinizing servicers to ensure they are doing all they can to help homeowners and follow the law," he said in a separate statement. In the joint statement, the agencies said they recognize the ongoing challenges mortgage servicers face, their efforts to assist borrowers and that it requires time to make operational adjustments in connection with the end of the flexibilities. "The agencies will consider, when appropriate, the specific impact of servicers' challenges that arise due to the COVID-19 pandemic and take those issues into account when considering any supervisory and enforcement actions." The post Regulators done playing nice with mortgage servicers appeared first on HousingWire. |
| Mortgage rates drop below 3% yet again Posted: 10 Nov 2021 07:03 AM PST Mortgage rates fell below 3% in the week ending November 10, according to the latest Freddie Mac PMMS mortgage report. The 30-year fixed-rate mortgage declined to 2.98% last week, falling 11 basis points from 3.09% the week prior. A year ago at this time, the average 30-year fixed-rate loan averaged 2.84%. "Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for the second consecutive week," Sam Khater, Freddie Mac's chief economist, said in a statement. "These low mortgage rates, combined with the tailwind of first-time homebuyers entering the market, means that purchase demand will remain strong into next year. However, affordability pressures continue to be an ongoing concern for homebuyers." The decline in rates has also led to a surge in refinancings. According to the Mortgage Bankers Association, the refi index rose 7% for the week ending Nov. 5. Although overall activity remains close to January 2020 lows, homeowners were spurred to act on the decrease in rates, he said. Mortgage rates have remained low in large part due to the Federal Reserve's massive monthly purchases of $120 billion in U.S. Treasury bonds and mortgage-backed securities. The Fed has said that it’s satisfied that substantial economic progress has been made in the labor market and will begin tapering its asset purchases later in November. Lenders – Now is the time to prioritize lead generation HousingWire Editor-in-Chief Sarah Wheeler and Deluxe Senior Business Development Executive Mark McGuinn discuss the challenges lenders are facing to optimize lead generation, even as mortgage rates continue to change. Presented by: DeluxeAlthough rates remain close to historic lows, market observers do expect rates to climb upward, eventually. The MBA projects that by the end of 2022, mortgage rates will approach 4%. Economists at Freddie Mac said the 15-year fixed-rate mortgage averaged 2.27% last week, down from 2.35% the week prior. It’s actually lower than it was a year ago, at 2.34%. Similarly, the five-year ARM dropped slightly to 2.53%, down one basis point from last week. A year ago, 5-year ARMs averaged 3.11%. The post Mortgage rates drop below 3% yet again appeared first on HousingWire. |
| Refis prop up mortgage application activity as rates dip Posted: 10 Nov 2021 04:00 AM PST Mortgage applications revved up for the week ending Nov. 5, rising 5.5%, according to the Mortgage Bankers Association weekly survey published on Wednesday. The increase was mainly driven by the refi index growing by 7% from the previous week, though it was 28% lower than the same week one year ago, the report said. Concurrently, the purchase index grew by 3% from the week prior. Joel Kan, associate vice president of economic and industry forecasting, remarked in a statement that the decrease in mortgage rates, pushed the refi and purchase index upwards. "The 30-year fixed rate decreased to 3.16% and has declined 14 basis points over the past two weeks," Kan said. "Although overall activity remains close to January 2020 lows, homeowners acted on the decrease in rates." Can Lenders Catch Up to Consumer Demand in 2022? In 2021, the message became clear: mortgage lenders must adapt to survive. In this white paper, we will examine how D2C lenders are poised for success in 2022 and what strategies traditional lenders can adopt from them moving forward. Presented by: Nomis SolutionsHe added, "Purchase applications were also strong last week, increasing just under 3% and down only 4% from last year's pace. The dip in rates might have helped to bring some buyers back into the market, but housing inventory is still extremely low and price growth remains elevated." Freddie Mac‘s PPMS Mortgage Survey published earlier this week found that the average 30-year-fixed rate mortgage dropped to 3.09% during the same week. In line with rates decreasing, the refi share of mortgage activity grew to 63.5% of total applications from 61.9% the previous week, while the adjustable-rate mortgage (ARM) share of activity dipped to 3.1% of total applications. With the Federal Reserve's announcement that they will begin to taper its $120 billion monthly asset purchases, it is likely that increased refi activity may be on its last breath. The MBA estimates that refis will amount to $2.26 trillion in 2021 and notably dip to $860 billion in 2022. Regarding government-guaranteed lending, the FHA share of total applications decreased to 8.8% from 9.2% the week prior, the report found. On the other hand, the VA share of total applications increased to 10.2% from 9.9% the week prior. The USDA share of total applications remained unchanged from 0.5%, the trade group said. The post Refis prop up mortgage application activity as rates dip appeared first on HousingWire. |
| Rocket blasts off in the private-label market Posted: 10 Nov 2021 03:00 AM PST  Industry powerhouse Rocket Mortgage started out dabbling in the private-label secondary market slowly, with a single offering in 2019, followed by another in 2020, but it has come out with its engines roaring in 2021. The nation's largest mortgage lender has launched a total seven private-label jumbo-loan securitizations between 2019 and early November of this year backed by loan pools valued at $4.2 billion at the time of closings — with five of those offerings undertaken in 2021. The two securitizations in 2019 and 2020 involved a total of 952 loans valued in aggregate at $715 million. The five deals so far this year, however, dwarf the prior years' securitization volume — with 3,642 loans pooled in 2021 as collateral for offerings valued in total at $3.54 billion. All seven private-label offerings have been issued by Woodward Capital Management LLC, a subsidiary of Rocket Mortgage's parent company, Detroit-based Rocket Companies. The conduit, or shelf, used for the transactions is called RCKT Mortgage Trust.  This content is exclusively for HW+ members.Start an HW+ Membership now for less than $1 a day.Your HW+ Membership includes: Already a member? log in The post Rocket blasts off in the private-label market appeared first on HousingWire. |
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