Aug 8, 2017

Nonbank mortgage employment soars on brighter origination

As per Mortgage New, Nonbank mortgage employment rose for the fourth consecutive month in June, as loan production during the second quarter was higher than expected at the start of the year.
Nondepository mortgage lenders and brokers added 5,000 jobs in June, bringing total employment to 341,000 from a revised 336,100 for May, according to the Bureau of Labor Statistics. May's original estimate was reduced by 600 jobs.

Lenders added 2,800 jobs, while brokers added 2,200 positions. It's the largest one-month gain in nonbank mortgage jobs since independent mortgage bankers and brokers added 5,100 jobs in July 2016. Employment is at its highest level since November 2007, when 348,700 people worked in the sector.

In June, Fannie Mae increased its 2017 origination forecast to $1.62 trillion from $1.59 trillion as refinance activity was stronger than expected. And the Mortgage Bankers Association now forecasts total volume of $1.7 trillion for 2017, up from the $1.6 trillion it forecast last December.

In July, the MBA projected second-quarter purchase lending volume of $316 billion, up from an earlier estimate of $310 billion. The MBA's refinance volume estimate also increased to $147 billion, from $120 billion. Annual purchase mortgage volume for 2017 is expected to be $1.1 trillion, up from $990 billion for 2016.Mortgage industry employment data lags the BLS national data by one month. Total nonfarm payroll employment increased by 209,000 jobs in July, and the unemployment rate was relatively flat at 4.3%."Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016," a statement from acting BLS Commissioner William Wiatrowski said.The increase in employment was broad-based and the report was the sign of a strong labor market, Fannie Mae Chief Economist Doug Duncan said in a statement.

"One could nitpick the lack of a pickup in year-over-year wage gains, which have stayed within a narrow range of 2.5% to 2.8% this year. However, in the context of decelerating headline and core inflation witnessed since early 2017, the steady annual wage increase isn't too shabby," he said.

"All in all, today's report is consistent with gradual monetary normalization; therefore, we continue to expect September balance-sheet tapering and a December rate hike," Duncan added.

Mar 20, 2017

MBA: Mortgage Applications Rise after two weeks of decline.

After two weeks of decline, mortgage applications rose to 5.8% as per the latest data collected by Mortgage Bankers Association’s Weekly Mortgage Survey for the week ending Feb 24th,2017.

Despite the record low activity in refinance applications as interest rates remained above 4%, Mortgage applications managed to increase.

The refinance share of mortgage activity decreased to 45.1% of total applications. This is the lowest level since Nov 2008. This is down from 46.2% the previous week.

The adjustable rate mortgage activity remained unchanged at 7.3% of total applications.
The Refinance Index increased 5% from the previous week to its highest level since December 2016. The seasonally adjusted Purchase index increased 7% from one week earlier.

The average contract rate for 30-year fixed -rate mortgages with conforming loan balances decreased to 4.30% from 4.36%.

Similarly, the average contract interest rate for 30- year fixed-rate mortgages with jumbo loan balances decreased to 4.23% from 4.29%.

Dec 15, 2016

Fed Rate Hike? Whatever, Mortgage Rates Are Already Up

According to, The surge in mortgage rates since the November election is expected to offset the increase to lenders' short-term funding costs following the Federal Open Markets Committee's 25-basis-point increase to the federal funds rate Wednesday.
The federal funds rate doesn't directly affect the interest rates that borrowers pay on home loans, as mortgage rates are benchmarked against longer-term 10-year Treasury yields. But depository and nonbank lenders are both expected to see their short-term funding costs go up, albeit in different ways.

"Anything that's a warehouse line or something like that is going to go up in price," said Brent Nyitray, director of capital markets at iServe Residential Lending in Stamford, Conn.
For banks, the fed rate influences their cost of funds for the deposits they use to fund mortgage originations. Likewise, the warehouse lines of credit that independent nonbanks use to fund their pipelines until loans can be sold to end investors are pegged to the London Interbank Offered Rate or the prime rate, which are influenced by the fed funds rate.
But the increase in that short-term rate isn't so much a concern as long as it's offset by a rise in the long-term rates most mortgages have. The average interest rate on 30-year mortgages has gone up nearly 60 basis points since the week before the election.
The rise in mortgage rates is enough to offset the increase in short-term rates, plus warehouse lines are not a big cost for mortgage lenders, said Charles Clark, director of mortgage warehouse finance at EverBank.
"I don't think there's going to be a big effect on mortgage bankers at all. You're moving the goal posts, essentially," he said.
But if the curve between long- and short-term rates or yields were to flatten, lenders would feel their margins slightly pinched by higher funding costs.
"It would really hurt everybody if the curve flattened because the cost of funding would go up relative to the note rate on the loan," said Tom Millon, president and CEO of the Capital Markets Cooperative, a subsidiary of Computershare.

Nov 2, 2016

Women better at paying their mortgages than men? Hell ya ...

This seems quite intuitive - but here it is backed up with some data.

Women are far better than men at paying their mortgages on time; shows a new report from Attom data solutions. It says that women are better with financials in general. Women, when compared to men, are less likely to go into a foreclosure.
Men have a slightly higher foreclosure rates than women where 73 out of 10,000 male homeowners versus 72 out of every 10,000 female homeowners.
The most interesting fact of this survey shows that, married men go into higher foreclosures than single men.  Of those who are married, 0.83% of men go into foreclosure compared to 0.66% of women. Single men, however beat women’s performance in finances. Single men have lower foreclosure rates than single women at 0.7% versus 0.73% respectively.

Oct 3, 2016

Mortgage Applications rise 0.6% from last week; Refinance applications dips 1% from last week.

Mortgage applications increased 0.6 percent from last week and is a 13 percent higher than what it was the same week a year ago. Apparently mortgage interest rates are not scaring potential homebuyers. Though home sales are slowing down, the reason why we see an increase in mortgage applications activity is because there are more mortgage dependent buyers in the market today.

Refinance applications fell 1 percent from the previous week as they are more interest rate sensitive. The interest rates are at 22.4 percent, slightly lower than what it was the same week, a year ago. The refinance side of mortgage activity decreased to 61.5 percent of total applications from 62.4 percent from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since June, to 3.73 percent, from 3.68 percent, with points increasing to 0.36 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio loans. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to its highest level since June 2016, 3.72 percent, from 3.67 percent, with points increasing to 0.29 from 0.24 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.54 percent, with points increasing to 0.30 from 0.23 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to its highest level since June 2016, 3.03 percent, from 2.97 percent, with points decreasing to 0.27 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

Even though it is tempting to conclude that the recent trend to higher rates is over, it still very premature to come to that conclusion because of the political uncertainty domestically and due to the state of flux in the international market.

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