Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday afternoon.
According to the Primary Mortgage Market Survey® from Freddie Mac, last updated Thursday, March 14, 2024, the 30-year mortgage rate sits at 6.74%, while the 15-year mortgage rate currently stands at 6.16%.
The latest Weekly Mortgage Application Survey from the Mortgage Bankers Association (MBA) found that mortgage applications increased by 7.1% during the week of March 8, 2024.
“Purchase application volume increased for the week but remains about 11% below last year’s level,” said Mike Fratantoni, MBA’s SVP and chief economist. “By contrast, refinance volume picked up by 12%, with a larger, 24% increase in the government refinance index. While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years.”
According to the National Mortgage News, homeowners insurance rates increased nearly 19% in 2023.
Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported an average net loss of $2,109 on each loan they originated in the fourth quarter of 2023, according to the Mortgage Bankers Association (MBA).
The loss is almost double the reported loss of $1,015 per loan in the third quarter and marks the seventh consecutive quarter of net production loss.
“The fourth quarter of 2023 was about as challenging as it could get for mortgage lenders to generate a production profit,” said Marina Walsh, MBA’s vice president of industry analysis.
“This year was exacerbated by the current lack of housing inventory and mortgage rates that increased to their highest levels of the year, keeping refinancings volumes low. These factors contributed to a ‘perfect storm’ that resulted in a decline in production volume for the quarter that reached the lowest level for this report since 2014.”
Total production revenue – including fee income, net secondary marketing income and warehouse spread – increased to 334 bps in Q4, up slightly from 329 bps in the quarter prior. On a per-loan basis, production revenue decreased to $10,376 per loan in the fourth quarter, down from $10,426 per loan in the third quarter.
Total loan production expenses – such as commissions, compensation, occupancy, equipment and corporate allocations – rose to $12,485 per loan in Q4, up slightly from $11,441 per loan in the previous quarter. Loan production expenses averaged around $7,389 per loan.
Despite tough market conditions, some companies have been able to weather net production losses through cash reserves or infusions and strong servicing cash flows.
Servicing operating income – which excludes mortgage servicing rights (MSR) amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses and gains/losses on the bulk sale of MSRs – was $104 per loan in Q3, the MBA noted.
The sale of MSRs does not directly impact earnings as a revenue stream, but the conversion of MSRs into cash via sales deals bolsters a lender’s cash flow and overall liquidity.
The MBA expects mortgage origination volume for one- to four-family homes to post $390 billion in Q1 2024, down from $399 billion in Q4 2023, according to its latest forecast.
The trade group also projected the 30-year fixed mortgage rate to average around 6.9% in Q1 2024 before falling to 6.6% in the next quarter.
Central to that shift has been focusing on their own “BS”: what others may dismiss as the unappealing side of the job, but what Carter has come to understand as denoting something entirely different. “I feel some loan officers, some real estate agents are falling out [of the profession] – when you have three different … [Read more…]
California mortgage tech firm Blend Labs narrowed its loss in 2023 by expanding its consumer banking footprint and growing its mortgage consumer base.
The San Francisco-based company reported a non-GAAP net loss of $101.3 million in 2023, down from a non-GAAP net loss of $182.2 million in 2022, according to data shared in its fourth-quarter and full year 2023 earnings call.
Its non-GAAP net loss narrowed to $21.6 million in Q4 2023, down from a non-GAAP net loss of $49.3 million in the previous quarter.
“We delivered significant efficiencies across our business, allowing us to report ahead of our guidance for non-GAAP net operating loss and keeping us on track for our profitability target in 2024,” co-founder and CEO Nima Ghamsari told analysts.
The fact that the company achieved this momentum “despite 2023 being one of the worst years on record for mortgage industry origination volumes increases our confidence in our ability to navigate the year ahead as the market looks to stabilize,” he added.
In the fourth quarter, Blend closed eight new consumer banking deals, which included signing a multiyear consumer banking deal with Citizens Bank. And it added two new top 100 financial institutions by retail customer base to grow its mortgage customer base.
The economic value of Blend’s mortgage suite, per funded loan, rose from $81 to $91 during the year ending in Q4 2023, representing continued adoption of its mortgage add-on products, the company stated.
“Not only do we have customers gaining [market] share, we’re signing new customers and they’re using more of our products,” Ghamsari said. “There is, of course, some churn in a tough environment as there’s consolidation, and some customers have gone to lower-cost or free options to manage a low-margin environment, but this is more than offset by the other vectors of our growth.”
Granular details
Of its $36.1 million in fourth-quarter revenue, Blend’s platform segment generated $25.9 million and its title segment posted $10.2 million.
Within the Blend platform segment, mortgage suite revenue decreased by 3% year over year to $17.2 million, amid a mortgage market volume decline of 20% to 25% during the same period.
For full year 2023, Blend’s platform segment revenue totaled $109.5 million, a decrease of 10% compared to the year ending on Dec. 31, 2022. Title segment revenue totaled $47.3 million, a 58% decrease compared to the previous year.
Blend’s Q4 2023 operating expenses declined to $41.6 million, less than half of the $89.6 million spent in Q4 2022. For all of 2023, operating expenses fell to $237.4 million, down from $835.8 million, which helped offset the company’s non-GAAP net loss.
As of Dec. 31, 2023, Blend had cash, cash equivalents and marketable securities totaling $144.2 million, with total outstanding debt of $140 million in the form of Blend’s term loan.
“During the fourth quarter, Blend prepaid $85 million of its term loan balance and amended the maturity date to provide for a one-year extension to 2027, provided we meet certain conditions,” said Amir Jafari, Blend’s head of finance and administration.
No change in profitability goal
Achieving non-GAAP profitability has been a long-running goal for Blend since going public in July 2021.
Executives on the earnings call reaffirmed that Blend is on track to achieve this goal, as it foresees continued growth in consumer banking and improved economics in mortgage, regardless of the macroeconomic environment.
Blend expects its first-quarter 2024 revenue to be between $32.5 million and $35.5 million — and platform revenue should finish between $22 million and $24 million. Its title business is expected to post revenue of $10.5 million to $11.5 million.
This forecast reflects Blend’s expectation of an estimated 800,000 to 875,000 industrywide mortgage originations in Q1 2024.
Looking ahead, Ghamsari hinted that Blend is preparing its customers to scale in 2025, which will be a “very different market for mortgages.”
“We’re building a next-generation refinance flow during a historically bad time for refinance volumes. Why? Because the longer this high-rate environment lasts, the larger the backlog of customers will benefit by refinancing when rates ultimately come down,” Ghamsari said.
A decline in interest rates buoyed mortgage demand for another week.
Mortgage applications increased by 7.1% on a seasonally adjusted basis during the week ending March 8, according to the Mortgage Bankers Association’s (MBA) weekly mortgage applications survey. It was the second increase in a row.
“Mortgage rates dropped below 7% last week for most loan types because of incoming economic data showing a weaker service sector and a less robust job market, with an increase in the unemployment rate and downward revisions to job growth in prior months,” Mike Fratantoni, MBA’s senior vice president and chief economist, said in a statement.
Purchase loan application volume increased by 5% from one week earlier but remains about 11% below the level of the same time last year. By contrast, refinance volume picked up by 12%, driven by a large increase in the government refinance index (up 24%).
“While these percentage increases are large, the level of refinance activity remains quite low, and we expect that most of this activity reflects borrowers who took out a loan at or near the peak of rates in the past two years,” Fratantoni said.
As of Wednesday, the 30-year fixed rate on HousingWire’s Mortgage Rates Center stood at 7.06%.
The MBA survey shows that the average mortgage rate for 30-year fixed loans with conforming balances ($766,550 or less) decreased to 6.84%, down 18 basis points from the week before. Meanwhile, rates on jumbo loans (balances greater than $766,550) decreased to 7.04%, down 17 basis points from the prior week.
The Federal Housing Administration (FHA) share of total applications decreased to 12% last week, down from 12.7% the week before. The U.S. Department of Veterans Affairs (VA) share increased to 12.2%, up from 11.4% the week before. And the U.S. Department of Agriculture (USDA) share remained unchanged at 0.5%.
The MBA survey, conducted weekly since 1990, covers more than 75% of all U.S. retail residential mortgage applications.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
A lot has been written about whether now is the best time to buy stocks.
Many think that it is a good idea, and others are still skeptical. So which one should you believe?
This article will help answer the question once and for all with facts rather than opinions.
But first, let’s look at some statistics:
S&P 500 Total Returns for 2021 was 28.71% (source)
In the past 20 years (2003-2021), the S&P 500 was down three times. (source)
Over the 10 year period of 2011-2020, the S&P 500 averaged 13.9% (source)
With that said, will it be best to invest now?
Honestly, that is an answer no one can give you. And the movies about Wall Street won’t help you either.
However, you can learn to read charts become a technical analysis trader, and have a better idea of where the market is going.
The stock market is a volatile thing. It can go up or down at any time. As the statistics show, it goes up more often than down.
Is it Smart to Invest in Stocks?
The stock market is a great way to make money whether for income or for long-term investments. Plus it is a lot more accessible than you think.
With stocks on an upswing lately, it might be tempting to dive in. But do not get too excited just yet!
You must learn how to invest in stocks.
Are you ready to make money in the stock market? If so, learn the steps to start investing today.
In order to make educated decisions, it is crucial that you understand what makes stocks go up or down.
Since you might be asking yourself whether it is a good time to buy stocks after the market has been on such an upswing for several months. The answer is yes, but there are some important factors you should consider before handing over your money.
This article will discuss how the stock market works and provide you with reasons why now may not be a great time to invest in stocks as well as alternatives that could make sense for you if this is indeed a bad time to purchase them.
Read more!
What is the Stock Market?
The stock market is a system of securities, such as stocks and bonds, in which investors buy and sell ownership stakes to each other on various exchanges using money or their own businesses.
Simply put, the stock market is a place where people invest money.
There are many different ways to invest in the stock market, but one of the most popular ways is through buying stocks.
Investing in stocks is a commonly used way to make money.
In the stock market, people can buy and sell shares of companies they believe will rise in value. You can participate by investing in the stock market by buying individual shares of a company like AMZN (Amazon), investing in an ETF like VTI, or investing with a mutual fund, such as VTSAX.
One former assistant principal, Teri Ijeoma, changed her life when she left her job as an educator and become an active trader.
What does it mean when the stock market is up or down
When the stock market is up, it means that stocks have been doing well.
Conversely, when the stock market is down, it means that stocks are losing value.
You have heard the saying… buy low, sell high.
Stocks are an investment that you can purchase in order to make a profit, but the best time to buy stocks is when they are at their lowest price.
If you bought a stock for $100 and its value increased by 10%, then your stock would be worth $110. However, if you bought 20 stocks at $100 and the value increased by 10%, then your new value is $2,200. If you are trading options, then your return (and risk) is much greater.
When the market is up or down there are always going to be opportunities to make money from the stock market!
The hardest part for the novice investor is to determine when to buy and sell.
Thankfully, there is a great investing course to help you figure out how to invest in stocks and options.
Timing the Stock Market
Can you even time the stock market?
Many people are concerned with timing the stock market because of its volatility. Honestly, no one knows what the stock market will do.
As a technical stock trader, you will learn based on previous actions how the market and individual stocks may react.
When day traders or swing traders “time” the market, they are using time frames to make their predictions. Those traders who manage their risk and potential losses well will do better in the market.
For the average investor or someone going off a friend or Reddit recommendation, timing the market can be detrimental to your portfolio.
The real answer to the question, “Is now a good time to buy stocks?” is that there’s no such thing as an ideal moment. It could be a great time or it could also be terrible timing. There are too many variables and market risks which makes this decision very difficult for investors.
Too many times, investors fall into the trap of panic selling while stock prices are low and buying when stocks are high on the fear of missing out (FOMO).
That is why the common knowledge states don’t time the market.
However, I can tell you that you can time the market. If (and it is a big if) you are willing to put the time and effort into an investing education as you would going to college.
Many people have found success in timing the market.
Why investing is always a good idea
Remember earlier in this post, we stated the stock market has averaged 13.9% over the past 10 years and only had 3 negative years in the past twenty.
Simply put, that means you can make money, and investing is a good idea.
That is better than the flip side of your money sitting in the back earning slightly above 0% and when you account for inflation, your money is worthless.
The stock market is (almost) always following an upwards trajectory.
This means investors are more likely to experience gains in their investments than they would if the prices were going down. Moreover, it’s almost never a good idea to just let your money sit doing nothing for years on end because inflation will eventually force you into losing value at some point.
Instead of waiting until then and hoping for the best, focus on what you want instead of what the market is doing at any specific moment.
Must Read: How To Invest In Stocks For Beginners: Investing Made Easy
Is now a good time to invest?
This is the wrong question. The better question to ask would be “What is a good time to invest?”
It is not always a good time to invest. Before buying stocks, it is important that you do your research and have a clear purpose for investing in the first place. Once you know why you are investing, then it will be easier to answer when now might actually be a good time.
What are your goals for investing in stocks?
Are you looking to make extra money?
Do you enjoy learning about the fundamentals of your favorite companies?
Do you have the time to invest to learn about investing in stocks and executing trades?
The desire to increase your investment accounts and net worth appealing?
If you answered yes, then you are ready to start investing in stocks.
If you said no, then stick to consistently investing in EFTs or mutual funds. That is still a solid investing strategy!
The bottom line is whether you are ready to invest. The stock market will continue to do its thing whether you choose to participate or not.
Why does the stock market just keep going up?
The stock market has been steadily climbing for the long trend.
As a result, it’s important to be aware of the factors that influence how much you can profit from stocks. This includes understanding what drives stock prices and when these markets are likely to go up or down.
The reality is that there is no such thing as an “always” in investing — there will always be downturns at some point for any market, but those dips won’t last forever either.
As history proves, the stock market over time will keep going up.
Why has the stock market dropped?
This is the #1 reason why most people are terrified of investing in the stock market.
The fear of the stock market dropping and losing money. Or maybe they were burned in the previous market corrections in 2001 or 2008.
Typically, the stock market has dropped because of the following:
The global economy is going through a rough patch.
There is fear that the US may be headed for another recession.
The US is experiencing inflation that has caused the Federal Reserve to raise interest rates.
In other words, investors are uncertain about the future of the global economy and are afraid of a recession in the US, which will have a significant impact on the stock market.
Just remember, the S&P 500 has come back each time after posting a year or two of negative returns.
However, you can still make money as an investor when the market goes down! Learn how to ride that elevator up and down.
What are the best times to trade stocks?
Ask a few different investment gurus and you are likely to get a variety of answers such as:
It is best to trade stocks when the market is down and on a day with low volume. This way, you are less likely to be hit with volatility that could cause your profits to drop.
The best times to trade stocks are when the market is stable, meaning that there are few fluctuations in price. The most optimal time to enter and exit the market is during a period of low volatility.
The best time to trade stocks is when the market is at an all-time high. (very wrong idea, so don’t try this one)
Traders should try and stay away from markets when volatility or uncertainty is high.
It is important to understand the best times for trading stocks in order to maximize profits.
Overall, your trading plan will tell you the best time for you to trade stocks. Over time with practice in a simulated account, you will be aware of the best times for trading.
Your best times will be different than mine; they will vary for all of us and that is okay. We all view the stock market and read charts in our own way.
Best Stocks to Buy Right Now
What are the stocks to invest in right now? Should you buy stocks now?
Well, first of all, I am not an advisor telling you what to invest in. You are responsible for doing your due diligence.
The best stocks to buy are the stocks that you understand the best– YOUR Watchlist!
Typically, that means following 10 stock tickers and learning everything you can about how those stocks move.
Other investing gurus may tell you the best stock to buy is one that has a low price-to-earnings ratio. This is because the company has room for growth, and they are more than likely not overvalued in the market. They look for industries that are experiencing either a slowdown or an increase in competition.
Personally, I like to stick with strong, healthy companies to buy.
Many times the best stocks to buy right now are growth stocks, which have been very successful in 2021. These types of companies grow rapidly and offer significant returns on investment in a short period time frame.
What are the best stocks to buy now or put on a watchlist? These are the most popular stocks investors tend to follow:
Apple (Nasdaq: AAPL)
Advanced Microdevices (Nasdaq: AMD)
Amazon (Nasdaq: AMZN)
Meta / Facebook (Nasdaq: FB)
Nvidia (Nasdaq: NVDA)
Tesla (Nasdaq: TSLA)
More Best Stocks to Buy
When you invest in these stocks as an investor, it is important that you look for them during their good moments so that your investments will increase significantly over time and always have risk management strategies in place (BEFORE YOU ENTER THE TRADE).
Can You Afford to Buy Stocks?
There are a lot of factors that go into determining the best time for someone to begin investing or trading stocks.
The most important aspect is whether or not you have enough money at your disposal, which can be determined by your personal financial situation.
Other factors that may play a role in determining the best time to trade are whether or not the person trading has a specific investment objective, and if they have a time-sensitive need.
You need to know your long-term goals for buying stocks.
Are you buying stocks as a long-term investor or if you are buying stocks for income?
Either way, you need a solid idea of how to plan to manage your risk and maximize your profit. That is why investing in stocks is so enticing for so many traders.
Read Now: How Fast Can You Make Money in Stocks?
So, should you buy stocks now?
The current market conditions are a great time to buy or short-sell stocks.
However, there are many trading mistakes when investors place a trade.
Whether we are experiencing a bull run or heading into a bear market, there is always money to be made in the stock market. You should not question yourself is it time to buy stocks.
Regardless, you must invest the money in a solid investing education. That is non-negotiable.
If you want to go out and start buying stocks without investing knowledge, that is fine. Just do not complain if you lose more money than the only investing course I recommend. Check out my Trade and Travel review.
You must do your own due diligence when investing in stocks and finding a good time to buy stocks.
This is your investing journey!
Your journey will be different than my investing journey. That is okay because we each will find our niche and how we like to trade stocks.
Back to the original question, is now a good time to buy stocks?
Overall, you must look for the best companies to invest in. That will make you successful at investing.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
loanDepot greatly reduced its costs in 2023 while revenues were in free fall amid a contracting market. It wasn’t enough to bring the California-based lender company profitability, but it narrowed its losses.
Operationally, loanDepot entered 2024 by dealing with a cyberattack that brought its systems down and a forecast for market conditions to improve.
loanDepot recorded a non-GAAP adjusted net loss of $142.4 million in 2023, compared to a $457.6 million loss in 2022. By GAAP accounting standards, the net loss last year was $235.5 million, per filings with the Securities and Exchange Commission (SEC) on Tuesday.
In 2023, a year marked by lower volume throughout the market, loanDepot’s revenues decreased 22% to $974 million. The reduction was impacted by its exit of the wholesale channel in 2022, and it was partially offset by growth in servicing income and home equity lines of credit (HELOCs), as well as higher margins.
Expenses, meanwhile, decreased by 36% to $1.25 billion in 2023. But this cutback could have been even larger if loanDepot hadn’t had a $27 million expense related to restructuring charges, impairments and accruals related to the expected settlement of outstanding litigation.
President and CEO Frank Martell said in a prepared statement that the company made progress last year by “significantly resetting its cost structure and making critical investments in our technology platforms and business processes.”
According to Martell, the company entered 2024 with a more “durable revenue model built around a strong multi-channel origination business and a low cost, high-quality servicing platform.” The company will “continue to aggressively pursue automation and productivity programs,” he added.
In the fourth quarter of 2023, when it was the target of a cyberattack, the company reached $229 million in revenues, up 35% year over year but down 14% quarter over quarter due to seasonality.
Expenses were $303 million in the fourth quarter, a year-over-year decline of 12% and 1% less than the previous quarter. loanDepot accrued $3.7 million in legal expenses regarding the expected settlement of outstanding litigation, compared to $2 million in Q3 2023.
The company’s non-GAAP net loss was $26.6 million in Q4 2023, compared to $25.4 million in the previous quarter. The GAAP net loss was $59.7 million in the final three months of last year.
In Q4 2023, the company announced an additional $120 million of annualized productivity improvements expected for 2024.
Through Feb. 29, the lender said it had achieved nearly 86% of this goal, which comes primarily from lower third-party expenses, organizational efficiencies and lower real estate expenses, executives told analysts during a call on Tuesday.
loanDepot chief financial officcer David Hayes said in a statement that the company reduced its cost structure by $693 million in 2023, which “has allowed us to maintain a strong liquidity position and at the same time support reinvestment in critical platforms and programs.”
The company reported a cash balance of $661 million at the end of 2023.
Operations data
loanDepot’s origination volume ended 2023 at $22.6 billion, down from $53.7 billion in the previous year. But its pull-through gain-on-sale margin was 2.75% last year, better than the 1.94% registered in 2022. Executives said during the call with analysts that margins are also improving due to competitors exiting the market.
In the fourth quarter, the company produced $5.3 billion in mortgages, compared to $6 billion in the previous quarter and $6.3 billion in the same period of 2022. Margins ended Q4 at 2.96%. Purchase loans comprised 76% of the total.
Hayes told analysts that fourth-quarter margins came in “above our guidance of 245 to 285 basis points,” mainly due to “an increase in volume and profit margins of our HELOC product, and wider profit margins on our conforming and FHA production, offset somewhat of a seasonally larger proportional contribution from our joint venture channel.”
Company executives project first-quarter 2024 volume of $3.5 billion to $5.5 billion. The pull-through gain-on-sale margin is expected to be between 2.7% and 3%.
According to Martell, the recent cyberattack will have an impact on the company’s first-quarter financial results, “but is not expected to have a material impact from a full year perspective.”
“The challenges presented by the increasing sophistication of the perpetrators of cyber attacks requires unprecedented focus and close coordination between the public and private sectors to ensure the private sector’s ability to prevent these types of intrusions of the future,” Martell said, adding that loanDepot executives would not take analyst questions related to the matter due to its “sensitive nature.”
Hayes added that the guidance for volumes reflects the seasonal decrease in homebuying activity in the first quarter, as well as the impact of the January cyber event, which will also bring an additional $12 million to $17 million in expenses.
loanDepot’s unpaid principal balance in its servicing portfolio increased to $145 billion as of Dec. 31, up from $143.9 billion as of Sept. 30, 2023. Servicing fee income rose to $132.5 million in Q4 2023, compared to $120.9 million in the previous quarter.
“In 2023, we successfully brought half a million customer servicing portfolio in-house,” Martell said. “Despite all the challenges that were presented by the market in 2023, we prioritized growing our assets under management, which ended the year at $145 billion.”
Looking forward, Martell said he expects market volumes will improve from 2023 levels. “Most recently published forecasts from the Mortgage Bankers Association call for a boost in 2024 for mortgage unit volumes of approximately 17%,” Martell said.
After the earnings release, loanDepot stock was trading at $2.44, down 3.6% in the after market.
10yr yields are now decisively below the levels seen BEFORE the last CPI report (the one that caused a jump from the 4.1’s to the 4.3’s). This has been accomplished without any shockingly downbeat econ data, and without the market ramping up bets on a friendlier rate trajectory from the Fed. In other words, it’s some combination of supply/demand technicals (Treasury auction composition and Fed QT tapering effects) and, more importantly, a legitimate belief that economy is not at risk of reigniting inflation concerns. On that note, Friday’s jobs report is in a position to undo much of the recent improvement if it makes a strong counterargument. The recent data and the bond market response are essentially daring the jobs report to surge.
Jobless Claims
217k vs 215k f’cast, 217k prev
Continued Claims
1906k vs 1889k f’cast, 1898k prev
08:37 AM
Stronger on data and ECB announcement. 10yr down 3.9bps at 4.069. MBS up 5 ticks (.16) before accounting for roughly 2 ticks (.06) of illiquidity.
11:49 AM
Gains erased in moderate, steady volume, and before Powell testimony. MBS up only 2 ticks (.06) and 10yr unchanged at 4.108.
02:37 PM
Weakest levels just before 1pm and holding modest gains since then. 10yr down half a bp at 4.104. MBS up 3 ticks (.09).
03:30 PM
Near best levels in MBS, up an eighth of a point. 10yr down 1.6bps at 4.092. Shorter-term Treasuries are doing even better.
Download our mobile app to get alerts for MBS Commentary and streaming MBS and Treasury prices.
Non-QM, RE Agent Monitoring, Mandatory Sales Products; The White House and Closing Costs; Webinars and Training
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Non-QM, RE Agent Monitoring, Mandatory Sales Products; The White House and Closing Costs; Webinars and Training
By: Rob Chrisman
Fri, Mar 8 2024, 10:40 AM
“Horses have lower divorce rates. It’s because they are in stable relationships.” Here on the Central Coast of California, there are plenty of horses but few disasters, wars, or big insurance claims. But in Ukraine there have been 566,000 property damage reports, and the government has launched eRecovery, an app based on the government’s digital platform Diia that may provide a template for future recovery efforts worldwide. It has already processed 83,000 compensation claims for damaged or destroyed property and has paid out over 45,000 claims, with 566,000 property damage reports filed through December. Volume isn’t a disaster for lenders, but it isn’t stellar either, and today’s TMC Rundown features Femi Ayi, VP Branching Operations at Revolution Mortgage, discusses using technology to make some tough choices. Curinos tells us that February 2024 funded mortgage volume increased 5 percent YoY and increased 14 percent MoM. The average 30-year conforming retail funded rate in February 2024 was 6.79, a shade lower than January but 62 basis points higher than the same month last year. (Found here, this week’s podcast is sponsored by Richey May, a recognized leader in providing specialized advisory, audit, tax, technology and other services to the mortgage industry for almost four decades. Hear an interview with the STRATMOR Group’s Jim Cameron on Maslow’s hierarchy of needs as it pertains to mortgage companies.)
Lender Broker Services, Products, and Software
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As the U.S. prepares to spring forward this weekend, the long-awaited spring market has finally arrived, marked by March ’23 showcasing peak LO activity with $129B in volume. As 2024 is predicted to bring $2 trillion in mortgage origination volume, now is the time to prepare for new business opportunities by cultivating and reinforcing your real estate agent referral partnerships. Unsure of where to begin? Mobility Market Intelligence (MMI) offers full visibility into any agent’s activity, including instant new listing alerts. Learn more here.
TPO, Broker, and Correspondent Product News
“Luxury Mortgage Corp. is thrilled to announce that we’ve recently enhanced and expanded over 100 facets of our Non-QM underwriting guidelines within the past two weeks. We’re eager to share these exciting updates with you! These enhancements include improvements for allowing certain borrowers to exclude the PITIA from their departing residence. We’ve expanded the eligibility criteria for non-occupant co-applicants, allowing blended income and assets up to 90 percent LTV. Additionally, our Bank Statement qualification options have been widened to encompass five (5) methods, one of which allows for a 1-year P&L supported by only two months of bank statements. To learn more about these updates, we invite you to explore a list of key improvements by clicking here. If you are not an approved broker, now is the perfect time to become one. Click here to initiate the process of becoming an approved wholesale broker and prepare to take your production to the next level.
Attribution: Yesterday’s Commentary reported that, “The real estate investment trust affiliated with Angel Oak Companies posted a $28.6 million profit in the fourth quarter. For the full year of 2023, the REIT generated a profit of $33.7 million; all but forgotten is 2022’s reported loss of $187.8 million….” This information and story came from Inside Mortgage Finance, and we apologize for not noting this yesterday.
President Biden and… Closing Costs?
Anyone in our business knows that “housing costs” are complex and dependent on a myriad of factors, including supply and demand, demographics, local and state zoning and permit costs, construction demographics, builder choices, etc.
“President Biden believes housing costs are too high, and significant investments are needed to address the large shortage of affordable homes inherited from his predecessor and that has been growing for more than a decade. During his State of the Union Address, President Biden will call on Congressional Republicans to end years of inaction and pass legislation to lower costs by providing a $10,000 tax credit for first-time homebuyers and people who sell their starter homes; build and renovate more than 2 million homes; and lower rental costs. President Biden also announced new steps to lower homebuying and refinancing closing costs and crack down on corporate actions that rip off renters.”
Webinars, Podcasts, and Training Next Week
It’s hard to believe a woman couldn’t get mortgage without a co-signer until 1974! In celebration of Women’s History Month, join MGIC for The Remarkable Rise of Women in the Mortgage Industry webinar on Wednesday, March 13. Hear guest speaker Patty Arvielo, CEO of New American Funding, discuss co-founding one of the largest independent mortgage lenders in the nation while fostering growth for women. MGIC’s Paula Maggio, EVP – General Counsel & Secretary, will lead the moderated discussion. Register now!
(A good place for longer term conference planning is to start is here, and click on “Conference List” for in-person events in the future.)
Today, Friday, March 8, is this week’s episode of The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET, in “The Rundown”. Today’s is co-hosted by Femi Ayi, VP Branching Operations at Revolution Mortgage.
Come see another industry first product by Insellerate with its new AI assistant. See how you can leverage AI now to create better customer experiences, drastically increase conversion, increase loan officer efficiency, market in new ways, and have insights into your customer like never before. On Tuesday March 12th Insellerate will be hosting a free webinar that will show case an industry first AI product.
National MI University’s March Webinars! Mastering LinkedIn for Mortgage Professionals – Session Three with Brynne Tillman – March 12th at 3pm ET. Top Loan Officer Strategies to Win NextGen Homebuyers with Kristin Messerli – March 13th at 2pm ET. Your Leadership DNA with Andrew Oxley – March 14th at 2pm ET. The Psychology of Sales with Rebecca Lorenz – March 26th at 2pm ET.
Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Next week watch attorney James Brody field questions on repurchases and compliance issues.
The Federal Housing Finance Agency (FHFA) announced it will host the next session in its series of property insurance symposiums on March 13.
Optimal Blue’s Hedging 101 webinar is back on March 14, Noon CT. Whether you’re considering a transition to mandatory or you’re already hedging, you won’t want to miss this highly informative and directional webinar.
Free, Live, virtual training for all USDA lenders and real estate agents, Top Tips for Confident Credit Underwriting. Watch this live training event in Microsoft Teams on Thursday, March 14, 2:00 pm – 3:00 pm ET.
Partner with the pioneer in non-QM wholesale lending to elevate your brokerage. Don’t miss Angel Oak’s March webinars crafted exclusively for broker originators. March 14th, 1PM EST, a Non-QM Webinar on DSCR Loans, March 21st, 1PM EST, a Non-QM Webinar on Bank Statement Loans.
Register for the Independent Community Bankers of America’s (ICBA) national convention, Thursday, March 14 through Sunday, March 17 at Orlando World Center Marriott.
The largest, most comprehensive educational and networking event for the nation’s community bankers. Attendees will explore industry trends and best practices while tackling top-of-mind community banking issues through dynamic general sessions; learning lab sessions, roundtables, and panels; and view demos featuring the latest innovation developments during the ICBA ThinkTECH Showcase and Expo Hall featuring more than two hundred vendors.
Capital Markets
Ginnie Mae’s mortgage-backed securities (MBS) portfolio outstanding grew to $2.54 trillion in February, including $30.9 billion of total MBS issuance, leading to $11.4 billion of net growth. February’s new MBS issuance supports the financing of more than 96,000 households, including more than 44,000 first-time homebuyers. Approximately 69.8 percent of the February MBS issuance reflects new mortgages that support home purchases. The February issuance includes $30 billion of Ginnie Mae II MBS and nearly $894 million of Ginnie Mae I MBS, including nearly $816 million in loans for multifamily housing. For the 2024 calendar year to date, Ginnie Mae has supported the pooling and securitization of more than 91,000 first-time homebuyer loans.
Turning to the overall fixed-income markets, the yield curve is moving toward “normal convexity” as dovish rhetoric from Federal Reserve officials this week has buoyed investor sentiment. The Fed may cut interest rates three times this year. Or twice. Or once. Or maybe not at all. Day two of Fed Chair Powell’s congressional testimony yesterday brought him before the Senate Banking Committee, where he reiterated that the Fed is close to the necessary confidence that will make it appropriate to begin dialing back the level of restriction.
But the FOMC is in no rush: Stronger than expected economic data in the first two months of the year has given the Fed ample breathing room to wait for further evidence that inflation is returning to the 2 percent target. Powell also confirmed policymakers are well aware of the risks of cutting too late. Cleveland Fed President Mester echoed Chairman Powell’s view that the FOMC will likely be in position to lower rates this year.
Improved TBA (“to be announced” MBS, used for hedging pipelines) pricing yesterday was primarily a result of the ECB’s adjusted inflation forecasts despite no change in rates. ECB President Lagarde’s remarks after maintaining current rates for the fourth consecutive meeting raised speculation that a rate cut could be on the horizon for June. Domestically, continuing jobless claims came in slightly lower than expected, which contributed to favorable bond market pricing.
What’s the rate & term refi possibility? We’ve seen a reduction in mortgage rates from nearly 8 percent at the end of October to slightly under 7 percent currently. The total percentage of American homeowners that currently have refi incentive of at least 50 basis points has risen from 0.03 percent to just 2.1 percent ($102.2 billion out of about $4.97 trillion in UPB).
Today brought the February payrolls report. Nonfarm payrolls increased 275k versus 190k expectated and 353k previously. The unemployment rate was 3.9 percent when it was seen holding steady at 3.7 percent. Average hourly earnings were tame at +.1 percent (+4.3 year-over-year) versus expectations of increasing 0.3 percent month-over-month and 4.5 percent year-over-year versus 0.6 percent and 4.5 percent in January. Later today brings remarks from New York Fed President Williams, the only scheduled Fed speaker. After the employment data Agency MBS prices and the 10-year yielding 4.04 after closing yesterday at 4.09 percent. The 2-year is at 4.44.
Employment and Transitions
“Ross Mortgage Corporation, celebrating 75 years as a trusted lender, invites you to join a legacy where success, innovation, and an unparalleled customer experience are the foundation of everything we do. With our unmatched support system, including personalized marketing strategies and tools to highlight your achievements and community impact, you’ll have everything you need to succeed. We are a sales organization led by a salesperson, where our President understands the challenges you face and is there every step of the way along with our caring team to support your growth and success. Ross is large enough to provide a state-of-the-art technology stack, but small enough where your voice is always heard. If you are a Loan Officer or Branch Manager who would like to learn about joining our winning team, please reach out to our President, Tim Pascarella at 248-259-4614. Licensed in AL, FL, GA, IL, IN, KY, MD, MI, MN, NC, OH, PA, SC, TN, TX, VA, WI, and the District of Columbia.”
It’s difficult to imagine a mortgage company remaining stable and debt-free for 32 years, especially in today’s market. But that’s exactly what Churchill Mortgage has achieved. Founder and CEO, Mike Hardwick believes a key component of running a successful business is doing what’s right for its people. In 2013, Mike transformed Churchill Mortgage into an Employee-Owned company, and as such, the team has navigated challenges together and emerged even stronger through the last few years. This year, Mike has promoted Matt Clarke to President as a natural next step to support continued growth. “I am excited and proud to promote Matt to President and Chief Operating Officer of Churchill Mortgage. He is an extraordinarily gifted thinker who has a unique ability to pull people together and make them stronger as a team,” said Hardwick. “I am honored to step into the role as President. Churchill’s people inspire me to keep growing and that’s exactly what we’re doing. We’re pushing ourselves to never stop improving and evolving. I’m excited to see what we achieve in the next 32 years,” said Clarke.
In Montana, Evergreen Home Loans is excited to introduce our new leadership team, reinforcing our dedication to serving the local community with unparalleled mortgage solutions. Leading the charge is Pete Edgecomb as Regional Manager, bringing a strategic vision and robust market acumen. Brett Evertz steps in as Area Manager, ready to foster growth and enhance our service offerings. At the branch level, Kelly Duray and Crystal Eckerson assume the roles of Branch Managers, combining their deep industry knowledge and local insights to deliver personalized client experiences. Evergreen is committed to empowering homeownership with a suite of innovative products. Our focus on local decision-making and comprehensive product offerings positions Evergreen as the premier choice for both seasoned teams and individuals aiming to advance their careers in the Montana market. Join us in shaping the future of home financing. To see all job listings visit: Mortgage Careers
AmeriHome wired out the news that Jim Furash, CEO of AmeriHome, has decided to retire from the company as of March 1st and that Josh Adler, Chief Investment Officer, has been promoted to CEO of AmeriHome. In addition to Josh’s new role as CEO, the company also announced that Dan Blanding, EVP Capital Markets, has been promoted to Chief Investment Officer. Congratulations all the way around!
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In remarks made Thursday to the Senate Banking Committee this week, Federal Reserve Chair Jerome Powell said he expects some U.S. banks to fail in the coming months because of declining values and defaults in their commercial real estate loan portfolios.
According to reporting by multiple outlets, including The Hill, Powell indicated that the risk is tied to small and midsized banks, and there is no systemic risk to the banking sector posed by the potential collapse of major institutions.
“We have identified the banks that have high commercial real estate concentrations, particularly office and retail and other [property types] that have been affected a lot,” Powell said. “This is a problem that we’ll be working on for years more, I’m sure. There will be bank failures, but not the big banks.”
Powell’s remarks came about a month after U.S. Treasury Secretary Janet Yellen expressed similar concerns to the Senate Banking Committee. Yellen told lawmakers that bank regulators are working to address risks tied to rising vacancy rates and lower valuations for office buildings in major cities.
These stressors are tied to the post-pandemic increase in remote work, as well as higher interest rates that have made it difficult to refinance commercial real estate debt.
“I hope and believe that this will not end up being a systemic risk to the banking system,” Yellen said in February. “The exposure of the largest banks is quite low, but there may be smaller banks that are stressed by these developments.”
Although commercial mortgage debt is propelling these concerns, the possibility of failure for a federally insured bank has implications for the residential mortgage sector. According to the Federal Deposit Insurance Corp. (FDIC), banks held $2.78 trillion in residential mortgage debt as of first-quarter 2023.
Community banks — commonly defined as those with less than $10 billion in assets — accounted for nearly $477 billion (or 17%) of the total debt. And the FDIC reported that home loans are the largest lending segment by dollar volume at more than 40% of community banks.
New York Community Bancorp (NYCB) is one institution that is facing a “confidence crisis” related to commercial real estate, primarily multifamily loans. NYCB, one of the largest U.S. residential mortgage servicers, received an equity investment of $1 billion earlier this month that is designed to strength the bank’s balance sheet.
In the wake of last year’s failures of First Republic Bank, Silicon Valley Bank and Signature Bank, smaller U.S. banks moved away from commercial real estate lending. Data from MSCI Real Assets showed that after originating a record-high 34.2% of all commercial mortgages in Q1 2023, regional and local banks trimmed their share of originations to 25.1% in Q2 2023. The latter figure represented a 53% year-over-year decline.
Still, small banks are more exposed to commercial mortgage debt than larger banks. Federal Reserve data from September 2023 showed that commercial real estate accounted for an average of 44% of the portfolios at small banks, compared to 13% at the country’s 25 largest banks.
Funding a potential bailout could be another concern for banks. When the FDIC rescued Silicon Valley Bank and Signature Bank in March 2023, the price tag was $22 billion. The regulator recouped $16 billion of that through a special assessment on more than 100 of its institutions.