Mortgage – HousingWire |
- Mr. Cooper delivers $658M in profit in Q1 on strength of MSRs
- A more “normalized” housing market is on the horizon: NAR
- Propy and Abra launch crypto-backed mortgages
- Servicing portfolio propels Ocwen to profitability in Q1
- Union Home Mortgage the latest to trim workforce
- Freddie Mac now worth $31.7B, but G-fee income falls
- Realogy stays profitable, laments mortgage
- Homebuyer affordability gets even tougher
- Mortgage industry execs, it’s critical to know your KPIs
- Mortgage rates hover in the lower 5% range
| Mr. Cooper delivers $658M in profit in Q1 on strength of MSRs Posted: 28 Apr 2022 03:49 PM PDT Nonbank mortgage lender and servicer Mr. Cooper Group reported net income of $658 million in the first quarter of 2022, increasing its profits by a factor of four compared to the $155 million recorded in the previous quarter. The performance reflects gains with mortgage servicing rights (MSR) and a deal with the fintech Sagent, which offset lower profitability related to originations, according to the quarterly earnings filing with the Securities and Exchange Commission (SEC) on Thursday. “The first quarter was extremely volatile, with the conflict and humanitarian crisis in Ukraine shocking the markets; further supply chain disruptions leading to headaches for many industries; accelerating inflation forcing the Federal Reserve into action; and the sharpest increase in mortgage rates in many years, if not decades,” Jay Bray, chairman and CEO, told analysts during a conference call. He added: “For Mr. Cooper, this kind of environment demonstrates the benefits of our balanced business model, which by design includes a much higher contribution from servicing than most of our peers.” In fact, Mr. Cooper had $96 million pretax operating income in the first quarter of 2022. However, the company also posted a $552 million gain with mortgage servicing rights (MSRs) transactions due to the higher interest rates, and a pretax income of $223 million from a deal with Sagent, which strongly increased its earnings. In February, Mr. Cooper and Sagent announced that they would be joining forces to create a cloud-native servicing platform. Mr. Cooper sold certain intellectual property rights related to its cloud-based technology platform for Sagent and received a minority equity stake in the fintech company. On the origination side, the company’s pretax operating income reached $157 million in the first quarter, a 14% decline quarter-over-quarter and a 57% drop year-over-year. Mr. Cooper originated $11.6 billion from January to March, down 32.5% compared to the previous quarter and 54% compared to the same period of 2021. Gain-on-sale margin surprisingly increased to 1.53% in the first quarter, compared to 1.41% in the previous three months. In the first quarter of 2021, it was at 1.63%. “Margins will come down over time; we’ve been saying that for several quarters. What you’re seeing is volume dropping off more significantly at the corresponding channel, where margins are smaller,” Chris Marshall, vice chairman and president, told analysts. Originations in the correspondent channel declined 54% quarter-over-quarter, compared to a 13% drop in direct to consumer. According to Marshall, the company will protect its margins “to some degree” in the coming quarter by reducing its expenses. “Rationalizing capacity is an unavoidable theme for everyone in originations,” he said. “In the second quarter, you will see us taking charge for staff reductions related to our lower volumes.” Bray said that, given the magnitude of the rate increase over the last 90 days, the company forecasts quarterly earnings before taxes with origination in the range of $65 billion to $85 billion and a funded volume of around $8 billion. Regarding its servicing portfolio, the pretax operating income was $7 million in the first quarter, but the company forecasts at least $100 million for the fourth quarter of 2022, reflecting the impact of projected higher interest rates on amortization and servicing interest income. Mr. Cooper ended the first quarter with $796 billion in unpaid principal balance (UPB), a 12% increase quarter-over-quarter and a 27% growth year-over-year. Owned MSRs reached $412 billion, compared to $276 billion in Q1 2021. The company acquired $81 billion in MSRs in the first quarter but expects to reduce its purchases in the market. “We intend to continue growing through MSR purchases, but we’ll be more selective right now because prices have exceeded where we thought they’d be at this point,” Marshall said. Bray added: “We shifted our focus from MSR acquisitions to stock repurchases.” Mr. Cooper has a capital ratio of 26.8%, but the target is 15%, which means it has resources for more stock purchases. The company repurchased 700,000 shares in the first quarter for $35 million. On Thursday, the company’s stock closed at $45.46, up 6.44% compared to the previous close. After reporting the earnings, it traded at $45.79 in the after-hours, up 0.73%. The post Mr. Cooper delivers $658M in profit in Q1 on strength of MSRs appeared first on HousingWire. |
| A more “normalized” housing market is on the horizon: NAR Posted: 28 Apr 2022 02:33 PM PDT For the fifth consecutive month, pending home sales declined in March from February, down 1.2%, signaling a potential return to "much calmer" conditions, according to the National Association of Realtors. Only the northeast region saw an increase in pending sales in March from February, according to an NAR news release based off data from its pending home sales index. But compared to the prior year, "pending sales fell for the 10th consecutive month, by 8.2%, with pending sales down across all regions.” Lawrence Yun, chief economist for the NAR, said the dip in contract signings suggests "multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions." He also expects higher mortgage rates to remain a key factor affecting home sales. Yun forecasts the 30-year fixed mortgage rate will reach 5.3% by the fourth quarter, resulting in a 2022 mortgage rate average of 4.9%. The average mortgage rate should jump to 5.4% by 2023, Yun said. "As it stands, the sudden large gains in mortgage rates have reduced the pool of eligible homebuyers, and that has consequently lowered buying activity," Yun said. "The aspiration to purchase a home remains, but the financial capacity has become a major limiting factor." Yun additionally expects inflation will average 8.2% for the year, "although it will start to moderate to 5.5% in the second half of this year." As of March the higher mortgage rates and sustained price appreciation has resulted in a year-over-year increase of 31% in mortgage payments – although major Sun Belt metros such as Tampa, Phoenix and Las Vegas have seen increases closer to 50% year-over-year. Despite that, Yun said: "Overall existing-home sales this year look to be down 9% from the heated pace of last year. Home prices are in no danger of decline on a nationwide basis, but the price gains will steadily decelerate such that the median home price in 2022 will likely be up 8% from last year." Renters will face similar increases, which Yun says could prompt some renters to explore ownership – although the increasing mortgage rates may price them out. "Fast-rising rents will encourage renters to consider buying a home, though higher mortgage rates will present challenges," Yun said. "Strong rent growth nonetheless will lead to a boom in multifamily housing starts, with more than 20% growth this year." Even as home inventory remains low, Yun also expects single-family homebuilders to take a cautionary approach, resulting only in a modest "boost to construction of less than 5%." The post A more “normalized” housing market is on the horizon: NAR appeared first on HousingWire. |
| Propy and Abra launch crypto-backed mortgages Posted: 28 Apr 2022 12:55 PM PDT Homebuyers can secure a home mortgage using cryptocurrency as collateral through a new partnership between blockchain real estate platform Propy and crypto wallet service Abra. The Abra Borrow platform allows customers to use crypto as collateral to borrow U.S. dollars with flexible repayment terms and interest rates as low as 0%, Propy, a real estate blockchain startup headquartered in Palo Alto, California, said in a release. Propy uses NFTs to close the entire real estate deal digitally. "While digital asset investment has skyrocketed, many investors are still unable to use their cryptocurrency holdings to directly fund the most important purchases in life, like property," Bill Barhydt, Abra's CEO, said in a statement. Abra Borrow users can seek “Propy-certified” real estate agents to help them buy or sell property, including making down payments on mortgages. In April, Propy auctioned off a 70-year-old brick home in Gulfport, Florida for an equivalent of $654,310, in the first NFT house sold in the U.S. The blockchain startup used Ethereum for auction, where the winning bidder used the cryptocurrency Ether. Mortgage companies are tapping into emerging blockchain and cryptocurrency lending markets, utilizing artificial intelligence technology to speed up the origination process. LoanSnap launched a crypto-mortgage program that relies on AI technology, cryptocurrency, and linking a real-world mortgage lien to a digital NFT. Founded in 2017, LoanSnap originated about $7.3 million in crypto-loans across 27 homes that have a total value of $43 million. LoanSnap’s Bacon Protocol platform allows investors to make “stable coin” investments, a form of cryptocurrency pegged to the value of the U.S. dollar, which are then pooled to fund digital, AI-enabled mortgages. The mortgage liens are then linked to an NFT, which in turn serves as a form of collateral for the stable coins funding the transaction. Other active players include Mike Cagney-led Figure; Milo, a Miami-based mortgage lender that allows borrowers to pledge cryptocurrency to finance up to 100% of the property purchase price; and Vesta Equity, Sarasota, Florida-based investment firm that provides a marketplace for home equity investments using blockchain and NFTs backed by verified real-world real estate. The post Propy and Abra launch crypto-backed mortgages appeared first on HousingWire. |
| Servicing portfolio propels Ocwen to profitability in Q1 Posted: 28 Apr 2022 12:23 PM PDT Nonbank mortgage lender and servicer Ocwen Financial Corporation reported a $58 million profit in the first quarter, according to preliminary quarterly results released Thursday. The company greatly bettered the $2 million loss in the fourth quarter of 2021 and increased its profits by a factor of six compared to the $8.5 million in net income reported in the first quarter of 2021. "Our originations and servicing businesses are performing as expected with the rapid increase in interest rates," said Glen Messina, president and CEO, in a statement. "MSR fair value gains more than offset a pre-tax loss in forward originations." Ocwen added $20 billion to its servicing portfolio during the first quarter. The total servicing unpaid principal balance (UPB) was at $275 billion as of March 31, 2022, up 3% compared to December 31, 2021. The company did not report origination figures with the preliminary quarterly earnings report – the lender will include the volumes in the final results expected to be reported on May 5. However, Medina said the company had a pre-tax loss in forward originations. "We are taking the necessary actions to address lower industry forward mortgage origination volume and margins, including expense reduction and right-sizing actions, while prioritizing higher margin products and services," he said. Meanwhile, Ocwen's origination volume and profitability in the reverse product remained strong and consistent with the fourth quarter of 2021, the executive said. In October, Ocwen Financial Corporation announced its subsidiary PHH Mortgage Corporation completed the acquisition of Reverse Mortgage Solutions to boost its reverse originations. Earlier this month, a U.S. Court of Appeals ruled that most complaints in the Consumer Financial Protection Bureau's attempt to revive a mortgage servicing misconduct lawsuit against Ocwen are barred because of a 2014 consent order. The bureau can only advance claims for alleged misconduct that are not covered by the terms of consent judgement, the Court said. The post Servicing portfolio propels Ocwen to profitability in Q1 appeared first on HousingWire. |
| Union Home Mortgage the latest to trim workforce Posted: 28 Apr 2022 10:35 AM PDT  Ohio-based Union Home Mortgage is the latest in a string of lenders this week to institute workforce reductions. "The residential housing market has turned quickly due to historically low inventory of homes for sale and a rapid rise in interest rates due to inflation," Cindy Flynn, chief marketing and communications officer, said in a statement. "We, like other companies in our industry, are temporarily adjusting staffing levels to accommodate rapidly changing marketplace conditions and business needs." The multichannel lender, which originated roughly $13 billion in residential mortgage last year, declined to provide any details about the layoffs. Union Home Mortgage is laying off loan officers in junior and senior positions, according to former employees' LinkedIn posts and interviews with HousingWire. Layoffs happened last week and this week, and the company provided two weeks of severance pay, one former employee said. Non-LO positions, such as processors and recruiters, were also among those laid off, former employees said. Flynn said the statements made by laid off employees to HousingWire were “inaccurate,” but did not specify or elaborate. UHM is the 49th-largest mortgage lender in the country, according to Inside Mortgage Finance. The lender's origination volume increased 25.8% from 2020 to 2021, to $13 billion. In the fourth quarter of 2021, when some lenders started to report declines in their production, UHM's volume was $4.2 billion, up 65.5% compared to the prior quarter. During the refi boom in the last two years, the company announced the addition of a third building to its corporate headquarters in Strongsville, Ohio, with onsite gym and cafeteria. It made way for the creation of 450 new jobs after the construction ended in summer 2021. At the time of the announcement, the lender had 1,300 employees. According to NMLS data, it has 681 LOs. In January, president and CEO Bill Cosgrove, an avid golfer, announced the acquisition of the Medina Country Club – the terms of the transaction were not disclosed. "I am a big supporter of golf as a sport, including the life lessons and friendship that come from it," he said in a statement. "I will employ these lessons to build a world-class culture at Medina just like we have at Union Home." In early March, the company promoted three executives to vice president positions. Bryan Wright is the vice president of national sales and Cyndi Garza, the vice president of national business development, a new position created in the company. Meanwhile, Steve Runnels is holding the role of vice president of retail sales, east division. Earlier this week, Rocket Mortgage, the biggest mortgage lender in the country, offered voluntary buyouts to 8% of its workforce. Flagstar Bank, one of the nation’s largest depository lenders, revealed that it has cut 20% of its mortgage staff since the beginning of the year. Wells Fargo, the top depositary in the U.S., confirmed it is also reducing its workforce, laying off processors and underwriters. Digital lender Better.com has also laid off more than 4,000 workers since December. The post Union Home Mortgage the latest to trim workforce appeared first on HousingWire. |
| Freddie Mac now worth $31.7B, but G-fee income falls Posted: 28 Apr 2022 09:55 AM PDT Freddie Mac reported net income of $3.8 billion for the first quarter of 2022, an increase of 37% year-over-year, even as purchase and refinance activity continued to decline. The company's net worth climbed to $31.7 billion, up nearly $13 billion from the same time last year. Its single-family mortgage portfolio now stands at $1.9 trillion, a year-over-year increase of 17%, due to house price appreciation and strong home purchase activity. "Freddie Mac delivered a strong first quarter performance, with net income exceeding both the first and fourth quarters of 2021," said Freddie Mac CEO Michael DeVito. "We remain intensely focused on our expansive mission, with an emphasis on promoting greater equity and sustainability." Income from guarantee fees was down considerably from the fourth quarter. In the first quarter of 2022, Freddie Mac pulled in just $70 million in guarantee income, a year-over-year decrease of $180 million. That decrease was more than offset, though, with gains from investments totalling $1.5 billion – an increase of nearly 300% from the previous quarter. Single-family net income totaled $3.4 billion, an increase of $1.2 billion from the prior quarter and $1.7 billion more than the same time last year. That increase was due to higher net interest income from mortgage portfolio growth, higher average portfolio guarantee fee rates and higher net investment gains. Single-family net income was also bolstered by house price appreciation and higher forecasted house prices, which led to a higher benefit for credit losses, the company said. How to solve purchase loan processing challenges By equipping your teams with tools and data sources that instantly give them the data needed to perform their work, your organization can increase efficiency and compliance at the same time. Presented by: ClosepinThe average loan amount for single-family home purchase loans Freddie Mac backed in the first quarter reached $300,000, due to a higher conforming loan limit and house price appreciation, the company's filings show. The average weighted credit score for all loans Freddie Mac purchased or guaranteed in the first quarter was 746, less than its five-year high of 760, the average credit score for loans it backed in 2020. The volume of refinances backed by Freddie Mac was less than half the level of refinances a year ago. In the first quarter of 2022, Freddie Mac backed $114 billion in refinances, less than half the $273 billion in refinances it reported in the first quarter of 2021. Purchase volume for the first quarter, at $93 billion, was down slightly from the prior quarter’s purchase volume of $111 billion. Freddie Mac said that some of that slippage was due to a decrease in its share of the overall government-sponsored enterprise market. “Our loan purchase and guarantee activity decreased primarily due to a decrease in refinance volume, driven by an increase in mortgage interest rates, and a decrease in our share of the GSE volume,” the company said in its filingsquarterly report. Nearly half of new single-family home purchase loans backed by Freddie Mac in the first quarter were for first-time homebuyers. Although not mentioned in Freddie Mac's first quarter results, the previous day the FHFA released Fannie Mae and Freddie Mac's duty to serve underserved markets plans. Freddie Mac's plan included a numerical target for manufactured housing chattel loan purchases by 2024, although the company does not yet have a product to conduct those purchases, and implementing one would require approval from its conservator. In a statement, Mike Hutchins, president of Freddie Mac, called the plan "comprehensive and sustainable." "We welcome the opportunity to do more," Hutchins said. The post Freddie Mac now worth $31.7B, but G-fee income falls appeared first on HousingWire. |
| Realogy stays profitable, laments mortgage Posted: 28 Apr 2022 09:25 AM PDT  Residential real estate brokerages will not do as well in 2022 as they did in 2021, but let's not get carried away. That seemed to be the message of Realogy Holding Corp.'s quarter one earnings just as the stock markets opened early Thursday morning. The Madison, New Jersey-based conglomerate whose name brands include Corcoran, Sotheby's International Realty, and Coldwell Banker, among others, posted $23 million in net income for the first three months of 2022. Realogy generated $1.6 billion in quarterly revenue, but the vast majority of that is from home sale commissions, which largely are returned to the company's independent contractor real estate agents. Once commission and other related expenses are subtracted, Realogy brought in $647 million. The revenue is up 6% from the first quarter of 2021, but net income dipped from $33 million that quarter, largely due to declining fortunes for the company's mortgage joint venture with Chicago-based mortgage lender Guaranteed Rate. The pair's spinoff company, dubbed Guaranteed Rate Affinity, lost $3 million in operating income for the first quarter, after making $61 million in quarter one 2021. "Our mortgage business took a pretty tough hit," said Ryan Schneider, who has been Realogy's CEO since the start of 2018. In response, the company told investors that the amount of operating income it predicts to make in 2022 has been pared down from $800-$850 million to $750-$800 million, "predominantly due to the rising mortgage rate environment and its impact on financial results at the company's mortgage origination joint venture." Realogy posted $902 million in 2021 operating income, and $343 million in net income. At the same time, Realogy's CEO noted that the housing market is still pretty good – at least if you're not a consumer trying to buy a home. Despite the acute inventory shortage, the National Association of Realtors estimated this week that 5.6 million existing homes will be resold in 2022, down from 6.1 million last year, but higher than any year between 2010 and 2019. Additionally, while rising 30-year mortgage fixed interest rates fuel the present evisceration of the mortgage refinancing industry, "Demand is higher than supply," Schneider said, due in part to demographic changes. "The five biggest birth years of millennials are about to turn 35," the CEO noted. Limited supply and rising interest rates are not the only big picture issues that affect Realogy. The company is a defendant in a Missouri federal court lawsuit in which a judge this week granted class action status on behalf of hundreds of thousands of consumers who either bought or sold homes from Realogy, RE/MAX, Keller Williams, or Berkshire Hathaway HomeServices. The lawsuit contends that by following a National Association of Realtor's policy to tether the buyer's agent commission with the seller's agent, these brokerages are artificially inflating consumer prices. Asked by an investor analyst about the case, Schneider said, "Not a lot I can comment on with pending litigation. We take it seriously, and we've got an experienced legal team." Schneider added that Realogy will continue to "vigorously" defend itself in the case. Another matter is the rising agent commission splits that have made an already low margin brokerage business even more tenuous. The CEO acknowledged that recruiting more agents has resulted in higher commission splits. But he seemed to not quite agree with the notion that the higher splits will partly result in less operating income for Realogy. When inventory gets tighter, Schneider said, "Higher-end agents get a bigger share of the volume." The post Realogy stays profitable, laments mortgage appeared first on HousingWire. |
| Homebuyer affordability gets even tougher Posted: 28 Apr 2022 09:01 AM PDT A combination of home price appreciation, inflation, and low housing inventory continued to dent homebuyers' ability to buy homes in March. The trend of a decrease in homebuyer affordability is forecast to persist in the coming months, hitting first-time buyers the most. The national median monthly mortgage payment settled in loan applications rose 5% to $1,736 in March from $1,653 the previous month, according to a survey published Thursday by the Mortgage Bankers Association. Conventional loans' national median mortgage payment jumped 4% to $1,819 last month from $1,750 in February. FHA loans payment also rose 4.4% to $1,819 in March from $1,750 in the previous month. "The healthy labor market and robust wage gains fueled demand throughout the country in March, but rapid home-price growth and the 42-basis-point surge in mortgage rates last month slowed purchase application activity," said Edward Seiler, MBA's associate vice president for housing economics and executive director at the Research Institute for Housing America, in a statement. The new “purchase applications payment index,” which measures how new monthly mortgage payments vary relative to income, increased 5% to 150.9 in March from 143.7 in February. An increase in MBA's PAPI, indicative of worsening borrower affordability conditions, means that the mortgage payment to income ratio is higher due to increasing application loan amounts, rising mortgage rates, or a decrease in earnings. Black households' homebuyer affordability dropped at the steepest rate with the index rising to 153.8 in March from 146.5 in February. White households' index climbed to 151.6 last month from 144.4 from the previous month. For Hispanic households, it increased to 144.4 from 137.5 during the same period. 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: Finance of AmericaAnother trend from the survey is an increase in mortgage payments for home purchases relative to rents. The national mortgage payment to rent ratio rose to 1.38 last month, the highest since 2010. The MPRR in February came in at 1.32 and 1.22 the previous month. Purchase mortgage rates surpassed the 5% threshold earlier this month following its climb for the seventh consecutive week, according to Freddie Mac's Primary Mortgage Market Survey. With mortgage rates following the 10-year Treasury yield, the upward trajectory is forecast to continue. The post Homebuyer affordability gets even tougher appeared first on HousingWire. |
| Mortgage industry execs, it’s critical to know your KPIs Posted: 28 Apr 2022 07:00 AM PDT As the first quarter unfolded, macroeconomic risks created strong headwinds for mortgage companies. The greatest concern is quickly rising mortgage rates, resulting in overall margin compression and essentially a nonexistent market for refinances. Fannie Mae forecasted in early March that mortgage rates would approximate between 3.7% and 3.9% this year, but by April 7, the national average for a 30-year mortgage had already reached 4.72%. The current volatility, combined with the likelihood of additional rate hikes on the horizon, has caused originators to focus on the purchase market as well as non-agency loan products like non-QM. Adaptability will be critical to navigating the rapidly changing market but it's just as important to have a comprehensive understanding of your business. Amid this challenging environment, mortgage companies must focus on their financial health, efficiency and effectiveness. One way to gain and maintain that knowledge is by using key performance indicators (KPIs), that allow a company to holistically assess critical components through relevant metrics. Financial-related KPIs to consider
Driven by dataIn addition to KPIs, there should be a healthy focus on financial metrics such as debt to equity, tangible net worth, liquidity ratios, etc. Always know how your company is generating return on equity and which levers you can pull to increase profitability. To this end, conducting a DuPont Analysis could prove helpful. Regardless of business cycle, you should have a good handle on your company and how it's performing. Building and consistently measuring applicable KPIs will enable you to keep a pulse on the business and ensure you can effectively adjust to changing conditions. Data is what fundamentally supports all KPIs. Accordingly, data integrity and quality are critical for generating reliable and accurate KPIs to help manage your business and improve adaptability in uncertain times. Ravi Correa is Chief Financial Officer at Angel Oak Lending. This column does not necessarily reflect the opinion of HousingWire's editorial department and its owners. To contact the author of this story: To contact the editor responsible for this story: The post Mortgage industry execs, it’s critical to know your KPIs appeared first on HousingWire. |
| Mortgage rates hover in the lower 5% range Posted: 28 Apr 2022 07:00 AM PDT Mortgage rates are hovering in the lower 5% range, after moving north for seven consecutive weeks, according to the latest Freddie Mac PMMS. Purchase mortgages this week averaged 5.10%, down only one basis point from a week ago. A year ago at this time, 30-year fixed-rate purchase rates were at 2.98%. The GSE's index accounts for just purchase mortgages reported by lenders over the past three days. According to Sam Khater, Freddie Mac's chief economist, the combination of swift home price growth and the fastest mortgage rate increase in over 40 years is finally affecting purchase demand. "Homebuyers navigating the current environment are coping in a variety of ways, including switching to adjustable-rate mortgages, moving away from expensive coastal cities, and looking to more affordable suburbs," Khater said in a statement. "We expect the decline in demand to soften home price growth to a more sustainable pace later this year." This week, mortgage applications dropped 8.3% from the past week: refi applications were down 9% and purchase apps declined 7.6%, according to the Mortgage Bankers Association (MBA). The MBA found that the adjustable-rate mortgage share increased to 9.3% of total applications, double what it was just three months ago. Mortgage rates are following the Federal Reserve's (Fed) inflation-fighting monetary policy. The central bank has signaled that it will raise rates more six times in 2022, and likely several more times in 2023. Also, the Fed since early March has been letting its purchases of mortgage-backed securities run off. There is consensus from the Fed governors to stop replacing up to $35 billion of maturing MBS assets each month. Why lenders should think about non-QM now, not later Agency rates are on the rise and refinance volume is down. Originators who had their best year in 2021 will have to utilize something else to make up for this loss in 2022 and non-QM can be the answer. Presented by: Angel OakAccording to economists, the tightening monetary policy will reduce originations in 2022 and 2023, and could potentially trigger a recession to the U.S. economy next year. Fannie's Economic and Strategic Research (ESR) Group dropped its projected single-family mortgage origination volume for 2022 from $3 trillion to $2.8 trillion. It also downsized the 2023 forecast from $2.7 trillion to $2.4 trillion. To compare, in 2021, the total was $4.5 trillion. Another index shows rates at the 5.3% mark. Black Knight's Optimal Blue OBMMI pricing engine, which considers refinancings and additional data from the MBA, measured the 30-year conforming mortgage rate at 5.317% on Wednesday, down from 5.324% in the previous Wednesday. Meanwhile, the 30-year fixed-rate jumbo was at 4.841% on Wednesday, up from 4.815% in the previous week. According to Freddie Mac, the 15-year fixed-rate purchase mortgage averaged 4.40% with an average of 0.9 point, up from 4.38% the week prior. The 15-year fixed-rate mortgage averaged 2.31% last year. The 5-year ARM averaged 3.78% with buyers on average paying for 0.3 point, up from last week's average of 3.75%. The product averaged 2.64% a year ago. The higher rate landscape is provoking lenders to cut costs, mainly via layoffs. This week, Rocket Mortgage, the biggest mortgage lender in the country, offered voluntary buyouts to 8% of its workforce. Flagstar Bank cut 20% of its mortgage staff since the beginning of the year. Wells Fargo, the top depositary in the U.S., confirmed it is also reducing its workforce, just days after reporting weak earnings for the first quarter. The post Mortgage rates hover in the lower 5% range appeared first on HousingWire. |
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