Mortgage – HousingWire |
- Mortgage apps climb 12% on spike in refi demand
- CoreLogic: home price appreciation will cool in 2022
- Fannie Mae launches another CRT offering
- LoanDepot’s profit in Q4 sinks 91% to $14.7M
- Private-label market wraps up January with a roar
- HousingWire Magazine: February 2022
- PennyMac expands consumer direct business
| Mortgage apps climb 12% on spike in refi demand Posted: 02 Feb 2022 04:00 AM PST Mortgage applications increased 12% from the previous week due to a surprising uptick in demand for "refis" as borrowers try to secure a lower rate, according to the Mortgage Bankers Association (MBA) survey for the week ending Jan. 28. The seasonally adjusted Refinance Index rose 18.4% in the same period. Meanwhile, the Purchase Index increased 4%. Compared to the same week one year ago, mortgage apps overall dropped 37%, with a sharp decline in refinance (-50.4%) compared to purchase (-6.7%). According to Joel Kan, MBA's associate vice president of economic and industry forecasting, mortgage rates continued to climb, with the 30-year fixed rate rising for the sixth consecutive week to its highest level since March 2020. The trade group estimates that the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) increased to 3.75% from 3.72% the week prior. For jumbo mortgage loans (greater than $647,200), rates climbed to 3.59% from 3.56% the week prior. "Despite the increase in rates, refinance applications were up 18%, driven mainly by a 22% jump in conventional applications," Kan said in a statement. "There has likely been some recent volatility in application counts due to holiday-impacted weeks, as well as from borrowers trying to secure a refinance before rates go even higher." How lenders can continue to serve borrowers despite housing affordability challenges Potential borrowers who've been priced out of the housing market need to be able to compete with an increasingly growing share of cash buyers and investors who are beating them in bidding wars. Presented by: EquifaxRegarding purchases applications, the average loan size hit a new record level at $441,100. "Stubbornly low inventory levels and swift home-price growth continue to push average loan sizes higher," Kan said. The survey showed that the refinance share of mortgage activity increased to 57.3% of total applications last week, from 55.8% the previous week. The VA apps dropped to 9.1% from 9.9% in the same period. The FHA share of total applications decreased to 7.7% from 8.6% the prior week Meanwhile, the adjustable-rate mortgage share of activity increased from 4.4% of total applications to 4.5%. The USDA share of total applications went from 0.5% to 0.4%. The post Mortgage apps climb 12% on spike in refi demand appeared first on HousingWire. |
| CoreLogic: home price appreciation will cool in 2022 Posted: 01 Feb 2022 09:58 AM PST Home prices across the nation climbed 18.5% year-over-year in December, according to a monthly report published by CoreLogic. On a month-over-month basis, home price gains rose by 1.3% in December 2021 compared to November. Consumer desire for homeownership paired with a low supply of for-sale homes were the main contributors to a red-hot housing market in 2021. However, the data vendor said that the market is beginning shift. Mainly, that home price gains, which are predicted to start 2022 above 10%, will slow to 3.5% by December 2022. In other words, the market and home price appreciation will start to normalize. "As we move further into 2022, economic factors – such as new home building and a rise in mortgage rates – are in motion to help relieve some of this pressure and steadily temper the rapid home price acceleration seen in 2021," said Frank Nothaft, chief economist at CoreLogic. Mortgage rates have already started to climb upwards, with Freddie Mac‘s PPMS Mortgage Survey clocking the average 30-year fixed rate mortgage at 3.55% during the week ending Jan. 27. How lenders can continue to serve borrowers despite housing affordability challenges Potential borrowers who've been priced out of the housing market need to be able to compete with an increasingly growing share of cash buyers and investors who are beating them in bidding wars. Presented by: EquifaxThe perfect storm of supply and demand pressures in 2021 pushed price appreciation to an average of 15% for the full year, up from the 2020 full year average of 6%. The reason for supply pressures in 2021 in part stemmed from supply-chain delays and the skyrocketing of lumber costs, delaying the building of new houses. A report published by Redfin this week found that overall inventory dropped to a record low in December, with just 1.8 months of supply. Meanwhile, last month, Naples, Florida, logged the highest year-over-year home price increases at 37.6%, while in Punta Gorda, Florida, home prices grew by 35.7%, CoreLogic's report found. On a state-by-state basis, the Southern, Southwest and Mountain West regions dominated the top three spots for national home price growth last year, with Arizona ranking first place at 28.4%. Florida ranked second with 27.1% home price growth and Utah came in third at 25.2%, the report said. The post CoreLogic: home price appreciation will cool in 2022 appeared first on HousingWire. |
| Fannie Mae launches another CRT offering Posted: 01 Feb 2022 09:00 AM PST  Fannie Mae has unveiled its second credit-risk transfer (CRT) deal of 2022, a $1.2 billion note offering through its Connecticut Avenue Securities real estate mortgage investment conduit, or REMIC. The recent offering, CAS Series 2022-R02, involves transferring loan-portfolio risk to private investors via a $1.2 billion note offering backed by a reference pool of 149,393 residential mortgage loans valued at $44.3 billion. With the completion of this credit-risk transfer (CRT) transaction, Fannie Mae will have brought 46 CAS deals to market, issued over $52 billion in notes since its initial offering in 2013, and transferred a portion of the credit risk to private investors on about $1.7 trillion in single-family mortgage loans, measured at the time of the transaction. The agency expects to issue about $15 billion in notes through CAS transactions in 2022, according to Devang Doshi, Fannie's senior vice president of single-family capital markets. Through a CRT transaction, private investors participate with government-sponsored enterprise (GSE) Fannie Mae in sharing a portion of the mortgage credit risk in the reference loan pools retained by the GSE. Investors receive principal and interest payments on the CRT notes they purchase, but if credit losses exceed a predefined threshold per the security issued, then investors are responsible for absorbing the losses exceeding that mark. Kroll Bond Rating Agency (KBRA) notes that the reference pool for this latest CRT transaction "exhibits significantly more geographic diversification" than most prime jumbo loan pools it rates, which "helps mitigate the risk that a regional economic recession or natural disaster will have an outsized impact on default rates." The bond-rating agency's report notes that the average California concentration of loans in KBRA-rated prime jumbo pools is typically 45% to 50%, but the concentration of loans from the Golden State in the CAS Series 2022-R02 transaction is "relatively low at 14.7%." The other states among the top five in terms of loan concentration are Texas and Florida, each at 7.8%; Washington, 3.8%; and Virginia, 3.7%, the KBRA report shows. Fitch Ratings also notes that the reference loan-pool borrowers "have a strong credit profile," with an average FICO credit rating of 748 and a debt-to-income ratio of 36%. The major loan originators for the loans in the CAS Series 2022-R02 reference pool are United Wholesale Mortgage, 8.04% of loans originated; Rocket Mortgage, 7.43%; and Wells Fargo Bank, 5.54%, according to Fitch. The initial CRT deal of 2022, CAS 2022-R01, involved a $1.5 billion note issued against a reference loan pool of 180,002 residential mortgages with an outstanding principle balance of $53.7 billion. In the final CRT deal of 2021, CAS 2021-R03, Fannie Mae issued a $909 million note against a reference pool of 117,000 single-family mortgages valued at about $35 billion. The prior two deals in 2021 involved CRT notes with a combined value of nearly $2.2 billion. Prior to restarting CRT offerings last year, Fannie Mae had backed away from the CRT market for a time — with its prior transaction closing in March 2020. The post Fannie Mae launches another CRT offering appeared first on HousingWire. |
| LoanDepot’s profit in Q4 sinks 91% to $14.7M Posted: 01 Feb 2022 07:22 AM PST California-based loanDepot greatly increased loan origination volume in 2021, which guaranteed gains in marketshare compared to its competitors. But the multichannel lender's gain-on-sale margin and net income fell significantly in the fourth quarter, reflecting changing market conditions. Overall, net income for the mortgage lender decreased all the way down to $623.1 million in 2021, compared to $2 billion the previous year. LoanDepot also reported a massive quarter-over-quarter decrease in net income: it made $14.7 million in profit in the last three months of the year, down 90.5% from the $154.2 million it made in the third quarter. A year ago, loanDepot made $547.2 million in profit. The decrease in net income was primarily driven by a dramatic decline in gain-on-sale margins – down to 2.61% in 2021, from 4.13% in the previous year. In the last quarter of 2021, the gain-on-sale margin was 2.23%, down about 60 basis points from Q3. Higher expenses also impacted the net income. LoanDepot's total expenses in 2021 increased to $3 billion, from $2.3 billion the previous year (it's worth noting that personnel expenses increased to $1.929 billion, up from $1.531 billion the previous year). However, the company reduced the total expenses from $744.7 million to $694.1 million from the third to the fourth quarter of 2021, which likely stemmed from a decision to redesign compensation, which took effect in the second quarter. More money was also pumped into marketing and advertising, with the company spending $467.5 million in 2021, compared to $264.3 million the previous year. The company highlighted its advertising campaigns and partnerships with Major League Baseball and the Miami Marlins. The originations landscape is shifting – is your business ready? HousingWire recently spoke with Jon Gerretsen, SitusAMC Managing Director of Residential New Originations and Fulfillment Services, about the home buying boom and how lenders can gain market share and drive profitability in a white-hot purchase mortgage market. Presented by: SitusAMCAnthony Hsieh, loanDepot's founder and CEO, said in a statement that the company's industry is a cyclical one, but the business was "purpose-built with period of pressure in mind," considering its proprietary tech stack, diverse mix of channels, and a marketing machine. "We control our lead flow, our customer contact strategy and the point of loan origination. This is a critical competitive advantage, enabling us to pivot and adjust our production as market trends demand." The loan origination volume achieved $137 billion in 2021, an increase of 36% from the previous year. Refinances represented 71.2% of the total, growing from $72.4 billion to $97.6 billion in the period. Purchase loans grew 39% last year to $39 billion, with the number of retail loan officers up by 18%. The company achieved a market share of 3.4% for the full year, up from 2.5% in 2020. Regarding the servicing activity, loanDepot ended the year with a servicing portfolio of $162.1 billion in unpaid principal balance. The company recently announced it is bringing the servicing of FHA, VA and USDA funded Ginnie Mae loans in-house. The lender's earnings report shows that conventional conforming loans, as expected, made up the bulk of loanDepot's business. The company originated $108.1 billion worth of conventional conforming loans in 2021, up from $79.9 billion in the previous year. Loan origination of FHA/VA/USDA loans was the second-largest share of the pie. LoanDepot originated $18.3 billion government-insured loans in 2021, up from $17.5 billion in 2020. The stock price of loanDepot on Tuesday at 10 a.m. EST was trading around $4.24 a share, down 9.6% after the company published the earnings. The post LoanDepot’s profit in Q4 sinks 91% to $14.7M appeared first on HousingWire. |
| Private-label market wraps up January with a roar Posted: 01 Feb 2022 05:00 AM PST  J.P. Morgan Mortgage Trust, the securitization conduit for financial giant JPMorgan, recently issued a $2 billion offering backed by a pool of jumbo loans — capping off a vibrant first month of 2022 for the overall private-label market. At least 25 transactions collateralized by more than 27,000 mortgages valued at $14.3 billion hit the market in January, based on an analysis of the flurry of bond-rating reports published over the month. The offerings were evenly divided among the major private-label buckets.
For the month, JPMorgan sponsored the largest deals in both the jumbo and investment-property categories — with its $2 billion jumbo offering and a separate nearly $740 million deal backed by investment properties. On the non-QM side — a market that serves borrowers who don't qualify for traditional agency-backed mortgages — lender Verus Mortgage Capital and real estate investment trust Starwood Property Trust led the way. They sponsored offerings through their private-label conduits valued at more than $562 million each. "The non-QM market is beginning to mature much more and at a much faster pace than what people were anticipating, and much of that is tied to interest rates [rising]," said Tom Piercy, managing director of Incenter Mortgage Advisors. "So, as you begin to see refinances move away, and we go into this purchase market, the non-QM space obviously has a much broader capability in the credit box, and that will allow it to capture greater market share through the purchase-money side." Last year, Verus Mortgage sponsored 11 private label transaction valued at about $5.4 billion, according to data from Kroll Bond Rating Agency (KBRA), while Starwood sponsored half a dozen offerings valued at nearly $2.3 billion. JPMorgan ended 2021 with 17 completed jumbo-loan securitization deals valued at $17.1 billion and eight offerings backed primarily by investment properties/second homes valued in total at $3.9 billion, KBRA data show. The combined value of JPMorgan's private-label transactions, about $21 billion in 2021, represents 18% of KBRA's estimated $115 billion in deal volume for the entire private-label market last year. "The 2021 resurgence of the private label mortgage-backed securities market was led by J.P. Morgan … with a robust 17 [jumbo] deals pricing for more than $17 billion," states a January report published by digital mortgage platform MAXEX — in which JP Morgan is in an investor. "J.P's volume alone nearly eclipsed 2020's [jumbo-securitization] volume across all issuers. "Other notable deals include Citigroup's first foray into the prime residential mortgage-backed securities (RMBS) market since 2014." MAXEX notes that Citigroup, which originated close to $31.2 billion in residential mortgages last year, finished 2021 with three jumbo-loan offerings valued at slightly more than $1 billion. The lender also sponsored three private label offerings backed by investment properties last year valued at $800 million, KBRA data show. Citigroup added to its securitization portfolio in January of this year with another offering, Citigroup Mortgage Loan Trust 2022-J1, which is backed by high-balance mortgages valued at $351 million. In addition to JPMorgan, Citigroup, Verus and Starwood, other major private-label deal sponsors in January included Rocket Mortgage, Redwood Trust (through its Sequoia conduit), Goldman Sachs, Guaranteed Rate, loanDepot (through its conduit, Mello Mortgage Capital Acceptance), and Wells Fargo. As of October 2021, according to the most recent report from the Urban Institute's Housing Finance Policy Center, the non-agency share of the RMBS market — compared with the agency share — stood at 4%, up from 2.44% in 2020. Still, it's far off the nearly 60% of the market private-label issuance commanded just prior to the housing-market crash in 2008. The Federal Housing Finance Agency's (FHFA's) recently announced plan to hike upfront fees for high-balance and second-home loans effective April 1 should provide a boost for the private-label securities market in 2022, according to Dashiell Robinson, president of Redwood Trust. He added that the fee boost helps to offset the drag on the non-agency RMBS market from the FHFA's 2022 conforming-loan limit increase as well as its suspension last fall of volume caps on agency purchases of investment-property and second-home mortgages. "The FHFA, particularly in the Biden administration, seems to be more focused on first-time homebuyers, minority homeowners — getting back to the roots of the [government-sponsored enterprises] purpose, which is homeownership," said John Toohig, managing director of whole-loan trading at Raymond James. "It's not your second home, or investor property, or high-balance loan. It's not your mansion. It's your first home. "I would bet 2022, you’ll see more of a move in that direction, which is going to push more deals into the private label market." The post Private-label market wraps up January with a roar appeared first on HousingWire. |
| HousingWire Magazine: February 2022 Posted: 31 Jan 2022 09:01 PM PST  HW+ Managing Editor I never thought I would see the day when the housing industry and the dating industry shared a common struggle — getting ghosted. The term is not so fondly used in the dating world when someone suddenly and without explanation withdraws from communication. In similar sentiment, the word is used in the mortgage servicing space when a borrower decides to cut contact with their servicer. While it's never ideal for servicers to have no back-and-forth communication with borrowers, it's extremely problematic in the current environment, given the last few years of borrowers who filed for and are now coming out of forbearance. Millions of borrowers who paused payments are needing to decide next steps. Except unlike dating where you might be left with a bruise to your ego and can get back into the dating scene, the outcome of borrowers ghosting servicers could be much worse. You can read all about the consequences in this month's feature that starts on page 24. And as always, the February issue is the first issue in the new year. As we embark on all things housing in 2022, we want to thank you, our loyal readers, for digging into the top trends and stories with us. To see all HousingWire Magazine issues, click here. The post HousingWire Magazine: February 2022 appeared first on HousingWire. |
| PennyMac expands consumer direct business Posted: 31 Jan 2022 07:45 AM PST California-based PennyMac Financial Services will invest $3.9 million to open a new mortgage origination center in Franklin, Tennessee. The nonbank mortgage lender is expanding its consumer direct lending business while some competitors are laying off employees with the expectation that the channel cools down with higher mortgage rates. In a press release announcing the third-quarter earnings, the company said the increase in earnings "was driven by strong execution in our consumer direct lending channel in particular, which locked and funded record volumes." The consumer direct channel contributed to $446.7 million in revenues in the third quarter 2021, 80% of the total. However, the lender's consumer direct market share was only 1.4% from January to September 2021, compared to 0.7% at the end of 2019. What Pennymac TPO's rebrand means for the wholesale channel Pennymac is changing the name of its wholesale division from PennyMac Broker Direct to Pennymac TPO. To learn more about the intention behind the rebrand and Pennymac TPO's plans for the future, HousingWire sat down with Senior Managing Director Kim Nichols. Presented by: PennymacThe consumer direct lending business has the lowest market share for the company compared to other channels, such as correspondent (17.7%) and broker (2.4%). Regarding the broker division, the company announced it has rebranded from PennyMac Broker Direct to Pennymac TPO and launched a new technology platform "to help brokers reach their business goals and aspirations." The post PennyMac expands consumer direct business appeared first on HousingWire. |
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