The rapid increase in interest rates seen in the first quarter took a big bite out of income from production and helped to goose servicing earnings. And while a downturn in originations was expected this year, it could be worse than expected.

Higher interest rates didn’t have much of an impact on home price appreciation in March; Freddie Mac launched new automated underwriting capabilities; Fitch shifts its outlook for ratings of Finance of America Companies to negative; MISMO remains busy.

Rising interest rates helped to push up income tied to mortgage servicing rights more than they reduced income from originations among a group of publicly-traded nonbanks. Results varied to some extent, with one large mortgage company even taking a loss in the quarter. (Includes data chart.)

If projections by the MBA are correct, interest rates for mortgages are levelling off, which should relieve some of the pressure lenders are facing on originations and profit margins.

Mortgage earnings among a group of 22 banks declined by 12% on a sequential basis in the first quarter of 2022. The downward movement was anything but uniform, with some banks posting large swings up and down. The movements were largely driven by interest rate trends. (Includes data chart.)

Owning mortgage servicing rights proved to be a great counter-hedge to an ugly origination market in the first quarter. At least two nonbanks benefited: Mr. Cooper and New Residential Investment.

Purchase-mortgage lending expected to increase; tips on remaining profitable amid rising interest rates; Texas Capital Bank slashes projections for warehouse lending; mixed trends for closing costs; Optimal Blue offers benchmark pricing tool for third-party originations; Comcast venture group invests in Neat Capital; MISMO’s e-Eligibility Exchange.

Revised accounting standards for credit losses; troubles mount at Blend; MISMO updates iLAD, considers eNote standards for commercial market; MBA redesigns website, highlighting reduced content.

With interest rates starting to rise, production income took a hit in the fourth quarter of 2021. While servicing income increased, the mortgage business was less profitable. (Includes data chart.)

With interest rate trends pushing the mortgage industry toward a down cycle, nonbanks reported a decline in fourth-quarter earnings. Margins remain a hot topic among the biggest players in the market. (Includes data chart.)