Nonbanks have increased their role in the selling and servicing of Fannie/Freddie mortgages. Nonbanks also sell somewhat riskier loans for which the GSEs are paid higher guarantee fees.
Lender buybacks of Fannie and Freddie mortgages remained at microscopic levels in early 2019, although there was a sharp increase in the pipeline of unresolved repurchase demands.
Seller repurchases of defective loans dropped to the second-lowest total on record, but Freddie repurchases remained significantly higher than Fannie's. The volume of unresolved claims was up from the fourth quarter.
The top five lenders had combined first-quarter production that was nearly even with the previous period, mostly because of substantially higher originations at Quicken and United Wholesale.
Two of the top nonbanks had remarkable starts to the year. Second-ranked Quicken Loans posted a 13.6% increase in production from the fourth quarter and third-ranked United Wholesale Mortgage upped its volume by a stunning 63.1%.
Correspondent production remained the biggest source of FHA and VA loans, but the rapid growth at United Wholesale Mortgage is reshaping channel dynamics.