Fraud risk on purchase mortgages increased in November after falling for six consecutive months, according to First American. The risk could be contained as long as interest rates stay relatively low.
No rate hikes in 2020? A totally “neutral” Fed? We’ll see about that. Meanwhile, non-QM lenders Angel Oak Mortgage Solutions and Citadel Servicing have bulls in their eyes.
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.)
Some lenders that were looking to throw in the towel after a rough first quarter experienced strong originations and returned to profitability as interest rates fell, putting the brakes on M&A activity.
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.
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