Falling interest rates are sometimes a bad thing — case in point is Mr. Cooper and negative MSR marks. Also, it’s been somewhat quiet on the M&A front but perhaps a change is in the wind.
Nine of the top 10 bank loan sellers reported reduced secondary market activity in the first quarter. Citigroup was an outlier, more than doubling its fourth-quarter volume.
Quicken stands out among nonbanks rated by Moody's Investors Service. The rating service said Quicken's earnings potential is among the highest in the group.
Low revenues, high expenses and trend lines moving in the wrong direction are causing large bank-owned mortgage companies to underperform compared to independent mortgage banks in the retail space, according to a report by Stratmor Group.
Most of the gain in production income occurred at JPMorgan Chase, which reversed an unusual loss in the fourth quarter. Wells Fargo accounts for most of the increase in servicing profits.
JPMorgan Chase reported a $200 million increase in mortgage banking income in the first quarter of 2019, a period when the banking industry managed just a $21 million gain.
Many lenders still rely on the "natural hedge" that balances gains on the production side against losses on servicing, but timing is an issue. Retention may be the best hedge of all.
Ditech is once again operating under Chapter 11 bankruptcy protection. But its problems, like a top subservicing client wanting out, are accelerating. Can the firm's advisors sell the shop before it's too late?
So far, five major banks — Wells Fargo, JPMorgan Chase, Bank of America, U.S. Bancorp and Citigroup — have reported first-quarter results, including limited details about home lending. The bottom line: mortgage lending suffered at most, but not all.
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