Rates have fallen to historic lows, with MBS values rising. However, as the weekend approached uncertainty prevailed. The wild card: prepayment speeds.
With rates falling to historic lows this week, originators are salivating at the possibilities. But will the boom bring capacity issues? Maybe, maybe not.
But there’s also a dark side to the rate plunge: The servicing side of the mortgage business is looking at mark-to-market bloodbaths that could be the norm if rates don’t snap back by the end of the current quarter.
The A-paper M&A market is in the doldrums. The reason: lenders are making money hand-over-fist and company owners are hanging on for one last shot at the refi rodeo.
According to Anthony Hsieh, founder and CEO of top-10 lender loanDepot, the mortgage industry might want to ponder creating a “reservation” system for incoming applicants.
Wells Fargo: “Like everyone, we are seeing an increase in mortgage application volume driven by lower rates. In order to help provide the best possible service to our customers, we continue to hire underwriters, processors and closers..."
“Mortgage originators are looking at record earnings for the first quarter,” said Chuck Klein, managing director of Mortgage Banking Solutions, Austin, TX, a consulting firm engaged in warehouse reviews and M&A activity.