Among a group of 21 prominent banks that have reported earnings for the fourth quarter, nearly every institution took a hit on mortgage earnings. For many, originations declined along with margins.
Private mortgage insurers lost market share in the agency purchase market during the last quarter of 2021, while FHA production shifted toward riskier business.
Retail lending by depository institutions' mortgage-banking operations fell in the third quarter, but a major acquisition by one bank pushed other indicators higher.
There is some evidence that production was less efficient in the third quarter, but profitability was up anyway. Servicing income was clearly stronger. (Includes data chart.)
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.
Deliveries of retail-originated loans to agency MBS fell 16.3% in the third quarter, while wholesale-broker volume was down 9.2%. (Includes two data charts.)
The 3Q21 shift from refinance to purchase-mortgage lending generally benefited FHA and private MI activity more than the VA market. (Includes two data charts.)
Although serious-delinquency rates declined at Fannie Mae, Freddie Mac and Ginnie Mae, the agencies reported a sizable increase in 30-day late payments during the third quarter. (Includes data chart.)
Local concentration of mortgage lending may not raise interest rates, but it does increase fees and points, especially for low-income and minority borrowers.
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