Mortgage applications surge in the days before the Fed meets to set interest rates, according to a study that looked at confidential data from HMDA. Applications fall by an even larger amount after the meetings.
A bird's-eye view suggests retail originations had higher credit scores and lower DTI ratios than loans produced by correspondents and brokers. But third-party originators generated lower-risk loans at the agency level.
Mortgages with low credit scores and higher loan-to-value ratios accounted for a larger share of Fannie/Freddie purchase business in the first quarter. But the industry is hardly in a race to the bottom despite slumping volume and tight margins.