pmuolo@imfpubs.com, bivey@imfpubs.com
Look for the primary-secondary spread to continue grinding lower in the near-term, according to a new report from Piper Sandler. Analyst Kevin Barker and his team note that with increasing lending capacity and a slight backup in interest rates “there could be more resiliency as we start to move into the spring selling season and purchase demand picks up”...
Meanwhile, new residential loan applications increased 8.1% for the week ending Jan. 29, according to figures compiled by the Mortgage Bankers Association. The refi share of new business inched up to 71.4% from 70.7%. One notable factoid: Conventional, FHA and VA purchase loan sizes all set new survey records, the trade group said...
And there’s this: Capacity issues at due diligence firms and other third-party service providers are slowing originations and loan sales in the non-qualified mortgage market, according to industry participants. “All of the third-party review firms and appraisal management companies are backed up,” said Keith Lind, executive chairman and president at Acra Lending, formerly known as Citadel Servicing. Lind and others discussed the non-QM market during a recent virtual forum hosted by Information Management Network. For more on the story, see the new edition of Inside Nonconforming Markets...
Nonbank mortgage giant PennyMac Financial Services reports 4Q20 earnings on Thursday. In a research note, Credit Suisse said it has a “high degree of confidence” in the company’s early buyout (EBO) opportunity as it relates to “driving elevated profitability for PFSI’s servicing segment.” CS reminds investors that during 3Q20, PFSI repurchased “about 15% of the total delinquent population, implying several more quarters of elevated profitability.” EBOs entail purchasing delinquent FHA/VA mortgages out of Ginnie Mae MBS pools and rehabilitating them.
DATA POINT: Ten years ago, according to figures compiled by Inside Mortgage Finance, the top three residential lenders were commercial banks. In 4Q20, the top three lenders were nonbanks. For more on the story, see the new edition of IMF, available Thursday afternoon.
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