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Inside Mortgage Trends

August 31, 2018

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Bank Mortgage Banking Income Held Steady in 2Q18, Call Reports Show

Commercial banks and savings institutions generated $4.26 billion in mortgage-banking income during the second quarter of 2018, according to a new Inside Mortgage Trends analysis of call reports. Second-quarter net income from mortgage production, loan sales and servicing was down 1.0 percent from the first three months of the year. But through the first six months of 2018, the industry’s mortgage banking income was up 18.8 percent from ... [Includes one data chart] Read More

Channel Credit Trends Vary by Agency

Loans originated in the retail channel and delivered into agency mortgage-backed securities continued to show a lower risk profile than mortgages acquired from correspondent originators or funded through mortgage brokers, according to a new Inside Mortgage Trends analysis of MBS data. The average credit score for retail originations was 727.27 in second-quarter agency MBS, 6.47 points higher than the average for correspondent loans and ... [Includes two data charts] Read More

With IPOs Closed, Some Nonbanks Find a Way

Privately held mortgage firms looking to raise capital by selling stock to the public face a grim reality these days, but alternatives still exist, namely private placement deals. Case in point is RoundPoint Mortgage, Charlotte, NC, the nation’s 15th largest subservicing vendor. Earlier this week, RoundPoint completed a $94 million capital raise accomplished through the sale of convertible preferred stock. The investor in the private placement was not identified. The company ... Read More

Nonbanks Return to Origination Profitability

After losing an average of $118 per loan originated in the first quarter of 2018, nonbanks made some adjustments and turned profits in the second quarter, according to a survey from the Mortgage Bankers Association. Some 343 nonbanks reported a net gain of $580 on each loan they originated in 2Q18. After an exceptionally weak start to the year, production profitability improved in the second quarter as volume picked up from the spring home buying season,” said Marina Walsh ... Read More

When Originations Decline, MBA Catches a Cold

As residential lending goes, so goes the fortunes of the Mortgage Bankers Association, the residential finance industry’s largest trade organization. MBA saw its revenues decline by 8.2 percent to $62.0 million in fiscal 2017 as its investment income plunged to $719,773 from $7.9 million the year prior, according to the trade group’s form 990 tax return. MBA’s “profit” (revenue less expenses) declined by 33.5 percent in FY 2017 to $12.7 million, a drop of $6.5 million ... Read More

Refi Trends Shifting as Interest Rates Rise

Increases to interest rates on mortgages are prompting changes in the types of refinances that are being originated. The cash-out share of refi business is increasing and credit quality is declining, according to an analysis by CoreLogic. Frank Nothaft, an executive and chief economist at CoreLogic, projects that the cash-out share of refi business will be near 40.0 percent this year. He said that would be the highest share for cash-out refis since 2005. In 2017, around 25.0 percent of refis ... Read More

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