When nonbanks hurt, their warehouse lenders hurt too, though in different ways. A sharp reduction in mortgage originations — with no interest rate relief in sight — is causing a handful of bankers to quit the space.
Desperate times call for desperate measures. But, perhaps, having the GSEs create demand by purchasing (a lot) more of their own MBS in an effort to lower rates is a bridge too far.
The residential finance industry is hoping the Federal Reserve and/or the GSEs might come to the rescue by playing a role in driving down mortgage rates. How’s it looking, then? Not so good.