Mortgage production increased by 26% in the second quarter on a sequential basis at the jumbo-focused First Republic Bank. And lock volume declined by 15% at Redwood.
As interest rates declined in 2020, the ARM share of jumbo originations plummeted. Lenders also got more lenient with DTI ratios, while average credit scores and LTV ratios tightened somewhat.
Competition among the two dominant players in the wholesale channel continues to reduce the profit equation. However, margins from retail lending remain robust … for the moment.
An estimated $8.60 billion of non-qualified mortgages and other expanded-credit products were originated in the first quarter. But the sector’s market share was still below 1.0%. (Includes data chart.)
Jumbo correspondent lending continued to make its comeback in the first quarter of 2021 after a sharp drop in volume tied to the coronavirus. Trends were mixed among lenders that focus on the retail channel. (Includes data chart.)
Jumbos accounted for 9.2% of total first-lien originations in the first quarter of 2021, a slight improvement from 4Q20, but nowhere close to pre-pandemic levels. (Includes data chart.)
The pencil sharpening represents a 13.8% jump from the $3.4 trillion Fannie predicted just month ago, and 88.8% more than the $2.06 trillion in originations the GSE forecast in January, before the advent of the coronavirus pandemic.