Three regional banks failed recently due partly to interest-rate risk. To avoid the same fate, mortgage companies of all stripes are being pushed to give up some profits to manage interest-rate risk.
Nonbanks are using short-term warehouse funding to their advantage, ramping up capacity when needed and quickly reducing intake when originations dip, an analysis of nonbanks’ financial statements shows.
The mortgage market is losing some capacity as Impac Mortgage and Finance of America move away from traditional production. The moves follow steep losses at the companies in recent years.
It’s not a good time to be looking for work in the residential finance industry. However, the recent bank liquidity crisis caused interest rates to fall, which could improve the production outlook.
Failed banks and interest rate risk; DOJ-Sterling Bank settlement; big banks boost First Republic; ICE to fight FTC over Black Knight deal; FHFA delays DTI fee; Guaranteed Rate offering fast approvals.
Climate change means future hurricanes will be more severe and have a more northerly track, changing the geography of loss risk for lenders and insurers alike.
Mortgage companies waiting for the market to improve; some high marks on MSRs; Ishbia ready to dedicate more time to UWM; Equifax offers expanded credit reports; House approves bill to set minimum federal standards for remote online notarization; Better launches mortgage product for Amazon employees.
The industry goliaths reported huge declines in earnings from their mortgage banking operations in the fourth quarter, driving the sector to its weakest profits in more than a decade. (Includes data chart.)
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