Profit margins and net income fell sharply in the mortgage banking business during early 2017, according to new data from the Mortgage Bankers Association. On average, firms participating in the MBA’s quarterly performance report earned just $886,000 in pretax income during the first quarter, a hefty 74.8 percent drop from the previous period. Only about two firms in three (67.0 percent) managed to report net pretax income for the first three months of the year. The industry funded...
The spring and summer home-buying season is in full throttle and with rates falling to yearly lows, mortgage bankers should be hiring in droves. Right? Not necessarily. Top-ranked lenders such as Quicken Loans and Movement Mortgage report they continue to search for new talent, but others are being careful about their hiring plans. Employment in the mortgage brokerage sector has been...
“By limiting the volume of securities that private investors will have to absorb as we reduce our holdings, the caps should guard against outsized moves in interest rates and other potential market strains,” said Fed Chairman Janet Yellen.
The banking industry retreated a little further from the business of servicing mortgages for other investors during the first quarter of 2017, although a change in reporting requirements made the change look a little bigger than it really was. A new Inside Mortgage Trends analysis of bank call reports shows that commercial banks and savings institutions serviced a total of $3.640 trillion of home mortgages for other investors, typically mortgage-backed securities trusts. These are mortgage servicing rights that the bank owns; in some cases a third party may perform the actual servicing and in others the bank may provide subservicing on MSR it doesn’t own. The March servicing-for-others figure was...[Includes one data table]
Former Ginnie Mae president Ted Tozer stressed the importance of getting the post filled as soon as possible. “The way things are going, by yearend Ginnie will have $2 trillion of guarantees on its books,” he said.
The U.S. Court of Appeals for the Fifth Circuit rebuffed arguments that would have subjected mortgage lenders and other secondary-market participants to increased liability under the Equal Credit Opportunity Act. In a published opinion that appeared in the Banking Law Journal, the Fifth Circuit court rejected plaintiffs’ argument that mortgage investors that promulgate discriminatory lending guidelines could be held liable as the original creditor. ECOA prohibits...
The average daily trading volume in agency MBS fell to $185.1 billion in May, the lowest reading of the past 17 months, according to the Securities Industry and Financial Markets Association. Year-to-date, the average is still ahead of last year’s pace but not by much: $204.2 billion compared to $201.9 billion for 2016. But these are interesting times for investors as both bonds and stocks continue to rally near new highs. Earlier this week, the yield on the benchmark 10-year Treasury fell to 2.12 percent, the lowest reading since the November election. It’s...
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