Why aren’t there 103’s on rate sheets? With 30-year mortgage rates firmly in the 7 percent range, the market has moved too fast for any kind of substantive premiums for lenders or MLOs to offer borrowers. Put another way, there aren’t any securities trading at prices like 101 or 103 that offer above par pricing that can be passed along. And with volumes continuing to decline, it will take a while for the secondary markets to catch up with the primary markets. As one fellow capital markets vet wrote to me, “I don’t even see premium pricing in the capital markets. There have been days where at best I saw par pricing on 6.5s, maybe 50 bps above. Even high-quality borrowers with FICOs above 780 and reasonable ratios need to bring money to the table. On that note, anything to add would be a nod to LLPAs in general, and the LLPAs that were handed down by the FHFA over the last year for 2nd homes and investments… With high bond coupons trading right o
Lenders continue to adapt, and LOs are adding value by being subject matter experts and marketing accordingly. (For example, today’s podcast features an interview with Bob Griffith, General Manager of Home Services at Houwzer, on using a client’s 401k to help finance a house.) Marketing is a fickle mistress. Ever “opt out” of receiving ads? The people that advertisers most want to target are hiding from the advertisers (thank you to Carla M. for sending that in). The implications to marketing efforts for any lender or vendor are clear. The implications of falling volume, margins, and revenue are clear as well: they’re leaving plans for 2022 in a shambles for most lenders and vendors. Every lender and originator know that 2020 and 2021 were not forecast to be record-breaking origination years, but they were. And if 2022 weighs in at $2 trillion in residential fundings, it will be a top 10 year. But still, volumes being down 50 percent from a year ago c
Today is World Breast Cancer Research Day, a global recognition of the life-changing research (past, present, and future) to end breast cancer. That would be nice. What is also nice, so far, is the lack of named storms in the Southeast. Lenders, and servicers, and of course homeowners, in the Southeast dread “hurricane season.” Back in May, NOAA's outlook for the 2022 Atlantic hurricane season (June 1 to November 30) called for “above normal” storm activity. But the prediction, like interest rate predictions, has so far been wrong, and it has been surprisingly quiet to date, thankfully. In the housing market, things are also quieting down somewhat as the summer season winds down. Or is it due to recession fears? Time will tell. Meanwhile, every week I receive questions about market dynamics and individual lender performance. How much did “X” produce last year? In which states? What is their product mix? What was their growth YoY? Where