Purchase-mortgage production is seen steady while refi activity is expected to decline. Low refi demand will cut into lenders’ profit margins. (Includes data chart.)
The industry increased profits on the production side of the aisle by pushing a higher volume of business through their platforms, reducing per-loan costs for personnel, occupancy and technology. (Includes data chart.)
JPMorgan Chase and Wells Fargo, which account for over 40% of the industry mortgage banking income, reported sharply different results in their third quarter call reports. (Includes data chart.)
Chase reported a huge increase in mortgage banking income that resulted in part from internal accounting while Wells posted a big decline due to MSR writedowns. (Includes data chart.)
The Federal Reserve cut rates by 25 basis points this week, assuring mortgage lenders strong operating conditions in the months ahead. Still, the production outlook is a bit darker for 2020.
Flagstar increased its servicing portfolio by about 50% on an annual basis as of the end of September while no other bank servicer in the top 20 posted double digit gains.
In January, the origination forecast for 2019 looked bleak but that was before rates began their relentless descent. Today? Optimism abounds with several shops reporting strong lending results for 3Q19.
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