For years, banks have been dominant players in the non-agency jumbo space. One strategy: Originate a loan, place it in portfolio and earn a spread. But thanks to rising rates and increased regulatory scrutiny, the economics aren’t as attractive.
For the third consecutive month, mortgage credit availability declined, with some products reaching their lowest levels in a decade. It’s only expected to get worse as lenders worry about the economy.
Chase’s top officials shed light this week on how First Republic Bank’s high-quality mortgage assets and affluent borrowers fit right into the megabank’s wheelhouse.
Banks are reducing their appetite for new mortgage originations, particularly among non-agency products. Nonbanks see an opportunity to take some market share.
First Republic Bank has set its sights on cleaning up its balance sheet and originating loans for sale to the secondary market, which may be easier said than done.
It will be the 11th issuance of its type by loanDepot.
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