Faced with a declining originations outlook, mortgage lenders should take advantage of today's more plentiful warehouse lending environment to review strategies that were developed during the liquidity crisis, industry experts say. The warehouse capacity issue has swung 180 degrees from where it was a few years ago, said Elaine Batlis, a senior vice president at Silvergate Bank, during last week's national secondary market conference sponsored by the Mortgage Bankers Association. Back in 2006-07, there was an oasis of liquidity; pricing was good and terms were flexible, Batlis said. But in the wake of the financial crisis in 2008, there was a sudden...
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Although the new repurchase claims submitted by investors to mortgage lenders appeared to ease in the first quarter of 2011, the industry continues to carry a growing inventory of unresolved buyback demands. Fannie Mae and Freddie Mac reported that lender repurchases or indemnifications totaled $2.8 billion during the first quarter of 2011. That was down from $5.9 billion in the previous quarter, a figure that was swollen by Bank of America's large-scale settlement of buyback demands from both government-sponsored enterprises. In fact, the volume of GSE repurchases during the first three months of 2011 was the lowest quarterly volume since... [Includes one graph and one data chart]
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Correspondent lending has taken a chunk of market share away from the broker channel, and smaller banks are jumping at the opportunity to become correspondent lenders to fill the spaces that too-big-to-fail lenders have overlooked or ignored. NexBank is among those trying to fill the gap. The North Texas state savings bank has announced a new wholesale correspondent channel aimed at offering mortgage brokers a chance to serve as mortgage bankers to their customers. NexBank is also looking to partner with community banks that have the balance sheet or warehouse line to fund loans but do not have the ability or desire to underwrite the loans. As a partner...
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Officials at Redwood Trust, the real estate investment trust that made headlines last year by sponsoring the first non-agency securitization of newly originated mortgages since the financial crisis began in 2008, have a favorable outlook on the residential market – yet the biggest challenge right now remains the low volume of production. Redwood Trust is upbeat about the future, for a number of reasons, according to Brett Nicholas, executive vice president and chief investment officer. "Proposals to reform the government-sponsored enterprises issued in February 2011 call for phasing out Fannie Mae and Freddie Mac," he said during...
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In a business dominated by a handful of super-sized national lenders and production volume in a nosedive, lenders have to pay more attention to how they compete for the dwindling pool of potential borrowers. Spending more time on acquiring industry knowledge and reaching out to customers will pump up originators' performance, according to a recent report released by Mortgage Source Success, a client acquisition and retention solution provider. "In less than a decade, mortgage loan origination in the U.S. has been turned on its head," the report said. "Not only has the economic crisis severely reduced the number and dollar-volume of originations, but...
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Look for refinance activity to continue to decline throughout the year, experts warn, but only a small percentage of those homeowners who do take a seat at the closing table will be "cash-out" borrowers. Freddie Mac reported last week that during the first quarter of 2011, only 25 percent of those who refinanced their existing mortgage loans pulled cash out of their home. Among refi loans, the average cash-out share - which Freddie defines as when the loan balance is increased by at least 5 percent - over the past 25 years was 62 percent. Even more surprising, Freddie noted that a record 21 percent of refi borrowers actually reduced their principal balance by...
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