A dozen publicly traded nonbanks saw combined income drop 69% from the first to the second quarter, thanks largely to shrinking production margins and unhedged MSR portfolios. (Includes data chart.)
Offshoring certain functions involved with originations or servicing can generate cost savings of 25% and beyond. Still, there are risks involved with the practice.
Only two of 21 banks reported increased income from mortgage banking during the second quarter, both due to improvement on the servicing side of the business. (Includes data chart.)
Income fell at four nonbanks in the second quarter, though performance was far from uniform. loanDepot’s profits dropped 94% compared with the previous quarter.
Investors in Fannie/Freddie common (and preferreds) were licking their wounds this week after the Supreme Court essentially ruled against them. Moral of the story: Stock speculation is not for the weak of heart.
Most of the big banks -- even Bank of America -- reported hefty gains in mortgage banking income during the first quarter that appear largely driven by net servicing fees. (Includes data chart.)
Most publicly traded nonbanks saw declines in origination gain-on-sale margins in the first quarter as the market evolved toward normalcy. Several companies offset declining production income with better performance on servicing. (Includes data chart.)
Sterling Bancorp recently reached a $12.5 million settlement for allegedly violating the Securities Act. The company is now ready to turn the page on its non-agency past.
Is Onity Group eyeing a sale? Perhaps. And why not? Servicing values are approaching a 25-year high.
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