Mortgage banking income appeared to benefit from both rising gains on sale and stronger net servicing income. The top three banks reported lower earnings from mortgage banking.
Black Knight increased its earnings in the third quarter of 2021 compared with the prior quarter while Blend Labs took a loss after earning a small profit in the second quarter.
Lenders are at the mercy of United Wholesale Mortgage’s pricing decisions, according to UWM’s president and CEO; Finance of America is seeing better returns from reverse mortgage lending than from traditional mortgages; the IRS released guidance on the Homeowner Assistance Fund.
With interest rates on the rise, refinance volume is expected to drop in 2022. Purchase-mortgage lending could hit a record level, but it won’t fully offset the loss in refis, putting pressure on margins.
Fitch revised its outlook for Provident Funding Associates to negative due to competition in the wholesale channel but upgraded its rating of UMM’s unsecured debt. MISMO is seeking comments on tech that would help obtain MI quotes.
Mortgage bankers continue to search for new talent, particularly in the non-QM sector. However, the overall mortgage employment reading declined recently. An aberration or something else?
Banks reported a 10% drop in retail originations through their mortgage banking operations in the second quarter. Loan sales also declined and likely continued to in the third quarter. (Includes two data charts.)