Mortgage – HousingWire

You can no longer get a mortgage at Costco
What will happen if ICE and Black Knight join forces?
Mortgage delinquency rate reaches lowest level since 2019 Q4
Freddie Mac unveils 4th CRT offering of the year
Black Knight reports $360M profit in Q1
Average mortgage rate climbs to 13-year high of 5.27%
Opinion: the “side hustle” Millennials will fuel mortgage innovation
Shock to the system: ICE to pay $13B for rival Black Knight
Federal Reserve approves interest rate hike of half a percentage point
LoanSnap unveils new cloud-based portal

You can no longer get a mortgage at Costco

Posted: 05 May 2022 10:14 PM PDT

Costco might have everything you need for a housewarming party, but as of this week it can't help you buy the house. Homebuyers will have to look elsewhere to secure a mortgage, as the members-only big box store announced it's no longer in the business of financing homes.

The retailer recently decided to discontinue its foray into home financing, effective May 1 – meaning customers no longer will be able to pick up a mortgage as they nosh on free food samples and stuff oversized carts with oversized goods.

Since 2020, when Ohio-based retail lender CrossCountry Mortgage acquired First Choice Loan Services – which had an existing partnership with the retail chain – CrossCountry has both run Costco's mortgage program and has been listed among its Costco-approved lenders.

Founded in 2003 by mortgage broker Ron Leonhardt, CrossCountry originated $52 billion in mortgages in 2021, up 22% year over year, checking in as the 17th biggest lender in the country, according to Inside Mortgage Finance.

Alicia Gauer, the senior vice president of corporate communications for CrossCountry, responded to an email requesting comment saying: "We do not comment on partner-led programs. We'd encourage you to reach out to Costco on this request."

A spokeswoman for Costco responded in an email saying, "Management has no comment at this time," and asked that the response not be attributed to her by name.

Each company has listed minimal information on its website. Costco's announcement says simply: "Members with questions regarding their current mortgage application and loan should contact the lender they have been working with."

It then lists the lenders it worked with and provides phone numbers for those companies, including CrossCountry. The other lenders Costco partnered with include Box Home Loans, Lending.com, Mutual of Omaha Mortgage, NASB, NBKC Bank, Real Genius and Strong Home Mortgage.

When First Choice was acquired in 2020, Leonhardt, the CEO of CrossCountry — which has approximately 3,000 employees and licenses in all 50 states — said the acquisition of First Choice and its deal with Costco was a "terrific fit."

"We are pleased that they chose to join us. It enhances both our strategic growth in several regions as well as our consumer-direct component. Our team committed to, and achieved, a smooth transition for the loan originators and we are seeing immediate success with this transaction," Leonhardt said at the time.

In a news release also issued at that time, both companies noted the Costco program was an important part of the deal.

"There was an extensive review process on both sides to ensure that that program would go forward with the high level of service required to provide the outstanding experience Costco members expect," First Choice Executive Vice President Bill Schneider said. "CCM was the company that more than met the requirements."

The news of Costco's exit may interest another global retailer: Walmart.

The big box store just announced its partnership with Lenders One Cooperative less than two months ago, an arrangement in which Lenders One will lease retail space inside Walmart stores from which it will offer mortgage products and services.

In early March, Lenders One said it would begin selling purchase, refinance and home equity products at its "store-in-store" branch locations. It wasn't immediately clear how many Walmart stores would feature Lenders One branches.

In a statement, Justin Demola, president at Lenders One, said that the initiative was part of the cooperative's mission to help members "improve their profitability and better compete against larger, well-funded mortgage lenders."

But Walmart and Lenders One executives surely will be following the news that the CrossCountry-Costco partnership has been disbanded. Gauer, the spokeswoman from CrossCountry, did not immediately respond to a question about whether there were any obvious challenges faced or hard-won lessons learned that would benefit Walmart in its endeavor.

Costco's exit from the industry isn't the first major departure from a mortgage player this year.

Santander Bank this February announced it would stop originating residential mortgages and home equity loans in the United States, citing higher rates, lower volumes, and fiercer competition, as reported by HousingWire at the time.

Santander's decision – and now Costco's – regarding mortgage and home equity is another sign the high-flying days of the mortgage industry are behind us. Case in point: The Mortgage Bankers Association has said it expects originations to decline 33% year over year to $2.59 trillion in 2022.

By contrast, although CrossCounty’s collaboration with Costco is ending, the company is by no means shrinking. In late April, CrossCountry was set to acquire LendUS, in what appeared to be the first of what analysts and industry veterans believe will be a wave of mergers and acquisitions in 2022.

CrossCountry has been acquisitive over the last couple of years, and often the target company will operate under CrossCountry's umbrella after the acquisition.

That includes not only Costco in 2020, but bemortgage in 2019.

Gauer did not immediately respond to a question about how the severed Costco partnership plays into its future plans.

The post You can no longer get a mortgage at Costco appeared first on HousingWire.

What will happen if ICE and Black Knight join forces?

Posted: 05 May 2022 03:09 PM PDT

Intercontinental Exchange, Inc. must convince regulators that the $13.1 billion mega-deal announced on Wednesday to acquire Black Knight will not harm competition in the mortgage tech solutions market.

The software and data company also needs approval from Black Knight's shareholders to move forward with the transaction, which valued the business at $85 per share, a 23% premium compared to the current price.

With such a complex mission ahead, the company doesn’t expect the deal to be completed until the first half of 2023. But what are the chances of approval? And once it happens, what will be the consequences for mortgage lenders and servicers?

Top executives at both companies told analysts on Thursday morning that the businesses are complementary: ICE focuses on tech solutions for originators while Black Knight is focused on servicers and the secondary market.

"Obviously it's a large deal, so we expect it to take time for regulators to understand the complementary nature of our two businesses,” said Ben Jackson, president at ICE. "Black Knight had legal counsel look at this in detail and came to the conclusion that these are 100% complementary businesses that service different parts of the mortgage ecosystem."

However, not everyone is so sure the deal will get approved.

Analysts who cover mortgage tech companies said that, based on Black Knight's current share price at around $72 on Thursday afternoon, the market appears to be ascribing a 60% to 70% probability of a deal closing.

"While difficult to precisely quantify, we believe that some discount (in the stock price) is warranted based on antitrust risks given the combined market share of ICE and BKI’s various businesses," a team of analysts from Keefe, Bruyette & Woods said in a report. "While it is unclear at this stage how regulators will evaluate the proposed combination, we think divestitures could help the odds of a deal closing, particularly Black Knight's loan origination system Empower."

Founded in 2014, Black Knight is estimated to have a market share between 10% to 15% in the overall mortgage software market, according to one analyst who prefers not to be identified.

The company, however, says it is the leader in the mortgage servicing software space, with a market share of 56% as of Dec. 31, 2021, according to a 10k document filed with the Securities and Exchange Commission (SEC). The company provides servicing software for 36 million active first and second lien mortgage loans.

From Black Knight's total of $387.2 million in revenue reported in the first quarter of 2022, 57% came from the servicing software, 30% from the origination software and the remaining was from data and analytics.

Meanwhile, Intercontinental Exchange, whose mini-empire includes ICE Mortgage Technology, has focused on increasing its loan origination offering over the last four years, neglecting the post-closing activities such as servicing and the secondary market.

The company grew in the mortgage space via the acquisition of other businesses, such as Mortgage Electronic Registrations Systems in 2018 and Ellie Mae in 2020. The latter brought in Encompass, estimated by analysts to be the loan origination system (LOS) leader in the country, which is why the combination of that with Black Knight's LOS raises antitrust questions.

But the downturn in the mortgage industry is hurting ICE's earnings in the mortgage segment. On Thursday, ICE reported that its origination technology revenue, representing 66.2% of the total, was down 20% year-over-year.

Closing solutions revenue remained $79 million, while data and analytics increased 6% to $20 million. In total, the mortgage technology segment revenue reached $307 million from January to March, down 13% year over year.

The Black Knight deal gives ICE the opportunity to fully digitize the mortgage origination and servicing experience from start to finish. The transaction expands ICE's total addressable market (TAM) to $14 billion, the company claims.

A valuable piece of Black Knight is the product and pricing engine Optimal Blue, which could become the largest player in the mortgage software space, at least double the size of the next largest competitor, according to analysts.

Also, the target company adds tech solutions in the servicing space. More lenders are beginning to retain their mortgage servicing rights (MSRs) to recapture previous customers and reduce their acquisition costs – important in a market that saw overall per-loan production expenses climb to $8,664 in 2021, according to the Mortgage Bankers Association (MBA).

"The combined entity will become the largest player in the space and will be at least two to four times the size of their next biggest competitor," said the analyst who prefers not to be identified. "From a client perspective, a fully integrated soup-to-nuts digital offering for mortgage origination and servicing should significantly reduce the cost of originating and servicing a mortgage."

The KBW analysts team estimates the potential cost reduction to lenders and originators by possibly as much as 50% over the long term.

The post What will happen if ICE and Black Knight join forces? appeared first on HousingWire.

Mortgage delinquency rate reaches lowest level since 2019 Q4

Posted: 05 May 2022 01:26 PM PDT

The cost of a home mortgage may be going up, but perhaps some good news: Fewer people who already own a home are missing payments.

Mortgage delinquency rates dropped for the seventh straight quarter, hitting the lowest level since the fourth quarter of 2019, according to the Mortgage Bankers Association.

Delinquency rates for mortgage loans on one-to-four unit residential properties dropped 43 basis points to 4.11% from the previous quarter. A basis point is 1/100th of one percent. Compared with the same period a year ago, the rate was down 227 basis points. That translates to 1.62 million loans serviced delinquent in the first three months of this year.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. If the borrower is in forbearance but makes a payment, the loan is counted as current.

Most of this improvement in delinquency rates can be attributed to the 90-days or more delinquency bucket, which dropped 48 basis points to 1.96% in the first quarter from the previous quarter, the MBA said.

The 30-day delinquency rate declined 6 basis points to 1.59% and the 60-day delinquency bucket remained unchanged at 0.56%.

Presented by: Black Knight

Software solutions represented 85.4% of the revenues in the first quarter, with an operating margin of 46.3%, down from 47.2% in the same period of 2021. The remaining revenue came from data and analytics, a segment with an operating margin of 26.9% from January to March, compared to 29.5% in the previous year.

Anthony Jabbour, Black Knight's chairman and CEO, said in a statement that the company sees positive momentum as lenders and servicers look for ways to "drive revenue growth, increase efficiency and maintain regulatory compliance."

Investors' expectations are not so positive. With the belief that the declining mortgage origination volume may chill demand for data and analytics products in 2022, they are punishing Black Knight's stock, which was trading at $72.16 around 11:00AM on Thursday, down 0.93% from the previous close. In the previous day, the stocks jumped almost 15% due to the ICE deal.

However, the transaction with ICE, already approved by both companies' board of directors, per the release, valued Black Knight at $85 per share. The deal, expected to close in the first half of 2023, needs approval from regulators and Black Knight stockholders. In a call with analysts on Thursday morning, executives from the companies said they have complementary services and will invest in cross-selling to improve earnings.

Due to the transaction with ICE, Black Knight has suspended the practice of providing forward-looking guidance.

The post Black Knight reports $360M profit in Q1 appeared first on HousingWire.

Average mortgage rate climbs to 13-year high of 5.27%

Posted: 05 May 2022 07:24 AM PDT

Mortgage rates surged to 5.27% over the last week, the highest average since 2009, according to the latest Freddie Mac PMMS.

This week's average purchase mortgage rate rose 17 basis points from the prior week’s 5.10%. A year ago at this time, 30-year fixed-rate purchase rates were at 2.96%. The government sponsored enterprise's index accounts for purchase mortgages reported by lenders over the past three days.

According to Sam Khater, Freddie Mac's chief economist, while mortgage rates are rising, house price appreciation will decline later in the year.

"Mortgage rates resumed their climb this week as the 30-year fixed reached its highest point since 2009," Khater said in a statement. "While housing affordability and inflationary pressure pose challenges for potential buyers, house price growth will continue but it is expected to decelerate in the coming months."

This week, mortgage application volume rose 2.5% from the previous week. Refi applications dropped to 33.9% and the adjustable-rate mortgage share remained unchanged at 9.3% of total applications, according to the Mortgage Bankers Association. The MBA found that purchase applications increased for conventional, FHA, and VA loans — all up 4% this week from the previous week.

Mortgage rates are following the Federal Reserve's inflation-fighting monetary policy. The central bank raised the interest rate by a half percentage point on Wednesday to reduce the $9 trillion asset portfolio that ballooned since the pandemic. The central bank had signaled it would raise rates six times this year with several more planned in 2023.

What lenders should know about today's economic climate

Between the recent rate hike from the Federal Reserve, the ongoing war in Ukraine and continued economic recovery following the pandemic, mortgage lenders across the country are managing a volatile housing market. Learn how updating your mortgage technology stack can help you get ahead in today's unpredictable lending environment.

Presented by: Polly

"Once we are past this rate spike and associated volatility, MBA expects that potential homebuyers may be more willing to re-enter the market. Given how much higher rates will remain above the past two years, we do not expect refinance demand to increase any time soon," said Mike Fratantoni, chief economist at MBA.

Another index shows rates above 5.5%. 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 5.525% on Wednesday, up from 5.317% the previous Wednesday. The 30-year fixed-rate jumbo rose to 5.042% on Wednesday from 4.841% in the previous week.

According to Freddie Mac, the 15-year fixed-rate purchase mortgage averaged 4.52%, with an average of 0.8 point from 4.40% the week prior. The 15-year fixed-rate mortgage averaged 2.30% last year. The 5-year adjustable-rate mortgage averaged 3.96%, with buyers on average paying for 0.2 point, up from last week’s 3.78%. The product averaged 2.70% a year ago.

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Opinion: the “side hustle” Millennials will fuel mortgage innovation

Posted: 05 May 2022 06:50 AM PDT

Mortgage rates are increasing and demand is beginning to level out. The residential real estate market is shifting, creating uncharted territory for lenders who've relied on a housing boom and refinancing to keep them in business.

As existing home owners potentially put the brakes on buying new homes or on refinancing their existing ones, lenders will rely more on first-time buyers to cut down on attrition during the slowdown. These new buyers; however, will heavily consist of maturing Millennials who expect instant access to all of life's bounties, including capital, at a moment's notice. Lenders of all sizes are now faced with a confluence of unprecedented workforce and customer satisfaction challenges that threaten how they've historically done business.

Millennials continue to drive change

Millennials are the fastest growing segment of homebuyers today, comprising 37% of the housing market. With a baby boom in the '80s, this generation is also the largest, fueling a massive influx of new buyers motivated to buy homes by growing rents and still-low interest rates. Now, these younger buyers are driving financial institutions to adapt to their expectations for more streamlined user experiences, accelerating digital transformations with new technology that will move the mortgage industry into a truly digital age.

Remember that Millennials are the generation that watched their parents struggle with high-interest mortgages during the last recession. They see that they have a better financial position in the current market and view homeownership as being paramount to their success. Although mortgage rates are slightly higher than they were six months ago, these buyers face rates that are still far below what they were when their parents first entered the housing market.

Furthermore, escalating rent inflation in the United States is making home ownership especially attractive for these buyers right now. Purchasing a home today is much more affordable than it was previously and, with a larger variety of loan programs available, the appetite for homeownership in this generation of buyers is easier to satisfy. Top lenders will continue to capitalize on that, offering new products and technology that cater to younger buyers.

On-demand expectations

This is also the generation that popularized on-demand services and the gig economy after all, helping to popularize everything from Uber and drop-shipping to telemedicine over the last 15 years. They seek rapid responses and resolutions, digital access to forms and tracking, and streamlined processes, or more generally speaking: instant gratification with less human intervention.

A 30-something, tech-savvy homebuyer today desires a faster, more no-contact approach to financing with a variety of options available to them at their fingertips rather than mail-in forms, in-person office visits, and constant waiting. The days of 45-60 day processing times in mortgage lending will simply not satisfy, nor survive.

Millennials and adult Gen Zers also work more alternative gig jobs, often to supplement their primary work, than do older Americans. According to Edison Research, 38% of 18-34 year-olds take on these roles, the highest of any age group. Whether these contract positions serve as a primary source of income or function as a side gig, lenders need to use new solutions to account for income verification and scoring creditworthiness, as the traditional model of relying on a paystub from a single job and credit report become obsolete.

The mortgage industry is behind the times

Even with new borrower portals and paperless processing, the mortgage industry is behind the times. Although human decision-making is essential when dealing with the complexity of high-dollar collateral, secondary market maneuvering and data analysis, it will be mortgage lenders investing in automation and robotic processes that autofill, crunch through data, and eliminate keystrokes to deliver lightning-fast responses who are proven most fit to survive the industry's next evolutionary step.

A look forward

With demand shifting to a new generation of first-time homebuyers, low inventory, and a possible interest rate rollercoaster ahead, expect to also see a more non-traditional mortgage landscape. Condo markets and new construction will swell. Non-QM loan products, and government assistance for first-time home buying will be more prevalent in the coming months and years. And consumer-driven adoption of more technology in mortgage lending will prove to be essential to keep up with the demand, as lenders recognize the innovation tipping-point is upon us.

Moving forward, mortgage lenders will need to do more and do it faster to provide the borrower experience necessary to compete for the next generation of homebuyers. Once technology gains traction for adoption, it moves quickly, and we already see many tech-first banks and fintechs using solutions like automation to serve these customers better. As the market gets more competitive for lenders, being prepared to meet the technological demands of the fastest-growing segment of buyers will mean having the ability to grow alongside them.

Suzanne Ross is the Director of Product, Mortgage at Ocrolus.

This column does not necessarily reflect the opinion of HousingWire's editorial department and its owners.

To contact the author of this story:
Suzanne Ross at sross@ocrolus.com

To contact the editor responsible for this story:
Sarah Wheeler at sarah@hwmedia.com

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Shock to the system: ICE to pay $13B for rival Black Knight

Posted: 04 May 2022 02:56 PM PDT

In a move with ramifications for an untold number of mortgage lenders and service firms, Intercontinental Exchange, Inc., a software and data company whose mini-empire includes ICE Mortgage Technology, will acquire Black Knight. The $13.1 billion mega-deal was announced in a press release Wednesday afternoon.

The move between what are generally regarded as the two biggest suppliers of mortgage loan origination software is the latest domino to fall in a mortgage market careening off the rails. It comes after the Federal Reserve announced Wednesday an additional hike in interest rates, a much anticipated move by nervous lenders, many of whom are laying off loan officers in droves.

Reports that the Jacksonville-based mortgage lending software and analytics provider Black Knight was exploring a sale became public in April.

Though the sale would seem to signal a declining market, analysts did tell HousingWire last month that it could instead be seen as an opportunistic move. Black Knight’s financials are in excellent shape, these industry insiders asserted. The company made $208 million in 2021 net earnings, though its stock has been punished due to the shrinking mortgage business.

The transaction, already approved by both companies' board of directors, per the release, valued Black Knight at $85 per share, a 17% premium compared to the current price. Black Knight's stock closed at $72.84 on Wednesday, up 14.47% from the previous day, after the deal became public.

More details on the motives and money behind the deal may come Thursday morning, when Intercontinental Exchange holds its first-quarter earnings call. Atlanta-based Intercontinental Exchange stock was down 4.04% on Wednesday to $109.86.

How should the current market impact lenders’ tech adoption?

HousingWire recently sat down with Polly CEO Adam Carmel to discuss how lenders can break old habits and redefine the mortgage process through innovation and modern, advanced technology.

Presented by: Polly

According to a statement from Warren Gardiner, chief financial officer of Intercontinental Exchange, Black Knight will bring a high-growth, recurring revenue model. With the deal, Intercontinental Exchange forecasts $125 million in revenue synergies by year five and $200 million in savings during a five-year period.

Black Knight has approximately 6,500 employees, according to the release. Founded in 2014, the company claims leadership in the mortgage servicing software market, with a market share of 56% as of Dec. 31, 2021, according to a 10k document filed with the Securities and Exchange Commission (SEC).

The financial terms of the transaction show that Intercontinental Exchange will pay 80% in cash, funded with newly issued debt and cash on hand at the time of close. The remaining 20% are Intercontinental Exchange stocks, priced at $118.09 at 10-day average closing share price. The transaction, expected to close in the first half of 2023, needs approval from regulators and Black Knight stockholders.

Goldman Sachs and Co. and Wells Fargo Securities are lead financial advisors to Intercontinental Exchange. J.P. Morgan Securities is serving as the exclusive financial advisor to Black Knight.

This is the second major recent deal for Intercontinental Exchange in the mortgage space. In September 2020, the company acquired Ellie Mae from Thomas Bravo, for $11 billion. Shareholders received $99 in cash per share, a 47% premium to the company's 30-day average closing share price.

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Federal Reserve approves interest rate hike of half a percentage point

Posted: 04 May 2022 01:03 PM PDT

The Federal Reserve Wednesday approved a 50 basis point increase to its policy interest rate in an effort to reduce inflation, in conjunction with a plan to shrink its $9 trillion asset portfolio beginning next month, according to Chairman Jerome Powell.

During a news conference following the Fed’s committee meeting, Powell announced the increase and outlined the Fed’s plan to begin “the process of significantly reducing the size of our balance sheet,” he said.

“It is essential that we bring inflation down if we are to have a sustained period of strong labor market conditions that benefit all,” Powell said. “The current picture is plain to see: The labor market is extremely tight and inflation is much too high. Against this backdrop, today the FOMC raised its policy interest rate by a half percentage point and anticipates that ongoing increases in the target rate for the federal funds rate will be appropriate.”

Experts say Wednesday’s move wasn’t a surprise.

“This change had been telegraphed clearly in recent speeches,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. During the announcement, Fratantoni also made note of Powell’s warning that the committee “anticipates that ongoing increases in the target range will be appropriate.”

“In other words, we are far from done at this point,” said Fratantoni. “MBA forecasts that the Fed funds target will reach 2.5%, the neutral rate, by the end of 2022.”

What lenders should know about today's economic climate

Presented by: Polly

As news of the Fed’s decision circulated, the S&P 500, Dow and Nasdaq all rose and extended gains while Realtors, loan officers, mortgage brokers and other industry professionals considered the immediate ramifications on the housing market.

Danielle Hale, chief economist for Realtor.com, said the two go hand in hand.

“Mortgage rates are an incredibly important channel through which Fed policy affects the real economy. In other words, the Fed’s decisions impact household budgets, balance sheets, and spending decisions via their impact on interest rates like mortgage rates. With mortgage rates climbing, up 2 percentage points in the previous 4 months, the financial conditions facing home shoppers have shifted in a big way,” Hale explained.

She also noted inflation is “running at the highest pace in 40-plus years, putting it at a lifetime high for most millennials and younger generations.” But, she concluded, Wednesday’s “vote alone is unlikely to spark a new surge in mortgage rates.”

Fratantoni said MBA expects mortgage rates will plateau near current levels.

“The financial markets have attempted to price in the impact of Fed actions over this cycle, and they are likely also pricing in the economic slowdown that will result,” Fratantoni said. “Once we are past this rate spike and associated volatility, MBA expects that potential homebuyers may be more willing to re-enter the market. Given how much higher rates will remain above the past two years, we do not expect refinance demand to increase any time soon."

Despite delivering high-level, nuanced details on the Fed’s plan, Powell first made clear the announcement wasn’t aimed at such industry experts. He began his address by saying he wished to speak directly to the American public.

“Inflation is much too high. We understand the hardship it is causing and we are moving expeditiously to bring it back down," Powell said during the news conference. “We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”

“Our overarching focus is using our tools to bring inflation back down to our 2% goal. With regard to our balance sheet, we also issued our specific plans for reducing our securities holdings. Consistent with the principles we issued in January, we intend to significantly reduce the size of our balance sheet over time in a predictable manner,” Powell said. “We’ll be prepared to adjust any of the details of our approach in light of economic and financial developments.”

Powell said “after expanding at a robust 5.5% pace last year, overall economic activity edged down in the first quarter.” But, he said the labor market has continued to strengthen, despite inflation remaining “well above our longer run goal of 2%.”

“In March the unemployment rate hit a post-pandemic and near-five-decade low of 3.6%,” Powell said, touting the country’s progress.

After discussing how Russia’s invasion of Ukraine is affecting global conditions, Powell said: “Our job is to consider the implications for the U.S. economy — which remain highly uncertain.”
The ongoing invasion is expected to restrain economic activity abroad and will continue to have an affect on the global supply chain, he said.

“Our policy has been adapting and it will continue to do so,” Powell said.

Additional 50 bps increases “should be on the table at the next couple of meetings,” he said.
Powell also explained “the economy often evolves in unexpected ways,” and noted that inflation has “obviously surprised” some during the past year. Powell then warned, “further surprises could be in store.”

But that doesn’t mean everything is unpredictable.

Skylar Olsen, the principal economist at Tomo, also said the move was “already anticipated by the market, but (it was) still the biggest increase in decades. The coming week will bring with it interest rate volatility, but early signals of the market reaction have rates falling, not shooting up,” she said.

Regardless, Powell said the Fed’s focus remains the impact that such decisions have on average Americans.

“We therefore will need to be nimble … and we will strive to avoid adding uncertainty to what is already an an extraordinarily challenging and uncertain time,” he said.

“The Fed’s monetary policy actions are guided by our mandate to promote maximum employment and stable prices for the American people,” Powell said. “We understand that our actions affect communities, families and businesses across the country. Everything we do is in service to our public mission. We at the Fed will do everything we can to achieve our maximum employment and price stability goals.”

HousingWire Lead Analyst Logan Mohtashami further outlined what the interest rate hike might mean for mortgage rates. “The Fed raised rates and talked about bringing inflation down, and after the press meeting, bond yields fell. Why? I believe that many Fed rate hikes have been priced, taking the 10-year yield toward 3.0%. If bond yields keep rising; we have more room to get toward 6.0% on mortgage rates. However, if economic data fades and yields are coming down, mortgage rates will go down with it.

“Right now, we are in a tug of war between two camps. One group believes that the Fed can’t raise rates that much because it will cause a recession, and another group believes the Fed needs to create a recession to fight inflation,” Mohtashami said.

“Since Europe’s economy is slowing down, China’s economy is in a mess, Japan needs more tourism still, and Russia is in a recession, there are limits to how much more global bond yields can head higher and our yields and mortgage rates. We will have to take the economic data one week at a time because we do see some cracks in the inflation data and growth.

“However, the Russian invasion of Ukraine and China’s lockdown have put pressure on inflation data. It’s going to be an epic tug of war for the rest of the year. For now, the 10-year yield has held around the 3.0% level without a breakout. The peak yield on the 10-year yield was 3.25% in 2018 when mortgage rates got to 5.0% back then. Rates are obviously higher today as the mortgage rate pricing is worse.”

This story was updated with industry reaction after initial publication.

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LoanSnap unveils new cloud-based portal

Posted: 04 May 2022 12:33 PM PDT

LoanSnap has unveiled a cloud-based portal called LoanFLow that will allow licensed brokers and loan officers in the U.S. to originate mortgages anywhere at any time.

The company says its new LoanFlow portal will allow originators to close loans in as little as 24 hours and in 15 days on average, the company said. The new portal includes "tools that can be used for customer onboarding, document sharing, relationship management and loan evaluation," LoanSnap said in announcing the new loan-origination portal.

LoanSnap said it is making these tools available for the first time to the "340,000 licensed [brokers and] loan officers in the United States."

"As long as you’re a broker [or loan officer] and you have your NML S license in that particular state, then you can just sign up for the system," said Karl Jacob, CEO and co-founder of LoanSnap.

Lo anSnap is a San Francisco-based mortgage company that employs artificial intelligence (AI) technology to originate loans more efficiently and faster. To date, it has originated "billions of dollars" worth of traditional mortgages dubbed "smart loans," according to Jacob, who was one of the original strategic advisors to Facebook when it was in its startup phase.

"We saved our customers more than $80 million last year," Jacob said. "We're not huge, but we're not small either."

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In addition to originating traditional mortgage loans employing artificial intelligence (AI) technology, LoanSnap has launched a crypto-mortgage program that relies on AI and blockchain technology, cryptocurrency and linking a real-world mortgage lien to a digital NFT — a nonfungible token.

To access LoanSnap's LoanFlow portal, brokers and loan officers must hold a verifiable NMLS license for the states in which they seek to originate mortgages, or they must go through LoanSnap's NMLS training program.

“Surging mortgage rates have reached the highest it’s ever been in the last 10 years, just as the supply of homes for sale hits a new low. This creates a very unfavorable market for homebuyers and lenders alike,” Jacob said. "The launch of LoanFlow aims to solve that by making it possible for loan officers to leverage cutting-edge technology to go direct-to-consumer and originate loans faster while offering better rates for homebuyers."

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Loans And Mortgage

Thursday, May 5, 2022