During refinance booms, loan officers can be worth their weight in gold but during a downturn LO costs need to be adjusted. That reckoning may be underway now.
A few years back, Better looked like a sure thing: It boasted state-of-the art origination technology. Today, the nonbank is bleeding red ink and dependent on a convertible note held by a Japanese multinational.
Investors are seeing value in the unsecured notes of certain large nonbanks, increasing the ability of these shops to sell new debt. Not all lenders are responding, but new deals could be in the works as long as MSR keep rising in value.
MBS trading has improved as investors and traders weigh the landscape. One positive: a benign inflation reading this week. But is this a head fake before worse news appears?
Another long-time player is exiting warehouse lending. The twist: There’s nothing wrong with Flagstar’s nonbank business. The problem is that the depository is owned by NYCB, which needed an investor-infusion earlier this year.