Three regional banks failed recently due partly to interest-rate risk. To avoid the same fate, mortgage companies of all stripes are being pushed to give up some profits to manage interest-rate risk.
Nonbanks are using short-term warehouse funding to their advantage, ramping up capacity when needed and quickly reducing intake when originations dip, an analysis of nonbanks’ financial statements shows.
Consumer Financial Protection Bureau Fair Lending Director Patrice Ficklin said the bureau would continue enforcing the Regulation B protections for prospective applicants.
An effort by big banks to prop up First Republic Bank triggered downgrades by rating services and only temporarily paused the decline in the bank’s share price. The bank is considering various strategic options.
Lenders originating ARMs weren’t able to buck the broader trend of declining originations in the fourth quarter of 2022. Still, on an annual basis, the ARM share nearly doubled in 2022 thanks to rising interest rates. (Includes data chart.)
The bank has been addressing fraud in its non-QM program since late 2019. The cleanup has involved fines, settlements, buybacks and the departure of more than 100 officers and employees.