FHFA Cranks up Hiring; The UWM Dustup/Competition Will Intensify - IMFnews

Share Register Advertise March 08, 2021 Banks Trimmed Their MSR Holdings by 12% in 2020 jbancroft@imfpubs.com There was plenty of opportunity to acquire mortgage-servicing rights in 2020 but the banking industry for the most part shrugged it off. Fannie Mae, Freddie Mac and Ginnie Mae created record amounts of new MSRs last year as securitization volume smashed historical records. Of course, all that gross issuance didn’t expand the MSR universe because of runoff, but the agency single-family market grew 9.3% last year. But commercial banks and savings institutions reduced their portfolios of single-family loans serviced for others by $447.1 billion, or 12.4%, during 2020. That included a $75.2 billion decline during the fourth quarter. In a year when secondary-market MSR sales were sharply curtailed because of buyer wariness about prepayment risk, the reduction in bank servicing-for-others portfolios came largely through attrition. Meanwhile, the asset value of MSRs has improved noticeably the past few months. For more on the story, see the new edition of Inside Mortgage Trends, now available online. FHFA Cranks Up the Hiring Machine dhollier@imfpubs.com Last year, when the Federal Housing Finance Agency and Treasury were still scrambling to set the stage for the end of the conservatorship, the common wisdom was that Fannie Mae and Freddie Mac would trim their headcounts and streamline their operations in preparation for a public offering. None of that appears to be true. Treasury and FHFA were never able to agree to a deal that would set the enterprises on a clear path to full private operation, and both Fannie and Freddie actually added employees. To top it off, the FHFA is also in the midst of a surge in headcount. According to FHFA’s own performance and accountability reports, the number of employees at the agency grew from 609 in 2019 to 635 in 2020. More tellingly, FHFA has budgeted for an additional 113 employees in 2021. Every single division in the agency is expected to see an increase in payroll. The biggest change will be in the Division of Enterprise Regulation, which oversees the GSEs. Here, the headcount will grow from 135 to 181. For full details, see the new edition of Inside The GSEs, now available online. MBA Takes Sides in UWM-Rocket-Fairway Dustup pmuolo@imfpubs.com, mvolkova@imfpubs.com The Mortgage Bankers Association Friday afternoon took sides in the intra-industry battle ignited by United Wholesale Mortgage CEO Mat Ishbia. In a statement, MBA President and CEO Bob Broeksmit said, “Consumers are best served when they have choices created by a robust, competitive market that offers a multitude of loan prices, products, and service levels. Our mortgage market is extraordinarily competitive, with thousands of lenders, multiple delivery channels, and varying business models. MBA does not condone activities designed to thwart competition in the mortgage market and limit loan options available to borrowers.”  Broeksmit was reacting to a Thursday afternoon Facebook speech delivered by Ishbia who gave the company’s broker/partners an ultimatum: If they work with Rocket Mortgage or Fairway Independent Mortgage, they can’t work for UWM. In sum, the  publicly traded nonbank is altering its broker contract, telling third-party salespeople if they violate this “representation and warranty” they must pay the wholesaler damages ranging from $5,000 to $50,000. Some brokers have raised concerns about the edict. On Friday, Ishbia issued the following statement to Inside Mortgage Finance: “Our internal and external counsel was consulted before we made this decision and we have no legal concerns. We are not saying brokers have to use UWM exclusively or even use UWM at all. The choice is 100% up to them. They can choose to partner with UWM and 73 other wholesale lenders, or they can choose Fairway/Rocket and 73 other wholesale lenders." Senate Approves $1.9 Trillion Stimulus Bill with Mortgage Assistance bivey@imfpubs.com The Senate, over the weekend, approved by a 50-to-49 party line vote a $1.9 trillion COVID-related stimulus package that includes mortgage assistance payments. The House is expected to pass the legislation sometime this week. While the Senate made various changes to a bill previously passed by the House, the main mortgage-related provision was left unscathed. Overall, nearly $10 billion will be available to borrowers having trouble making payments. The funds will be distributed by state housing finance agencies. Besides helping with loan payments, the money can be used to pay utilities, property taxes, homeowners insurance, and condo association dues. The broader bill includes $1,400 direct payments to individuals making less than $75,000, an extension of unemployment benefits, $21.5 billion for rental assistance and several other provisions. “This helps families who are behind on their rent and their mortgage payments so they aren’t thrown out of their homes,” President Biden said Saturday. Short Takes: The Story Lingers / A Sign of Intense Competition? / It Won’t Always Be That Way (Profits) / Doma’s IPO Plans / Envoy Executive Departs for Cardinal pmuolo@imfpubs.com It’s Monday and industry professionals continue to chatter about last Thursday’s Facebook event where United Wholesale Mortgage CEO Mat Ishbia gave the company’s broker/partners a choice: If you table-fund with Rocket or Fairway Independent Mortgage, you can’t use UWM… From Keefe, Bruyette & Woods analyst Bose George: “Since UWMC is roughly one-third of the broker market, this could slow growth of Rocket’s broker channel. Regardless of how this plays out, it suggests that competition between two of the largest mortgage lenders is intensifying”... Is the gain-on-sale margin bonanza over? Sure looks that way. Consultant Joe Garrett of Garrett, McAuley & Co. told his clients over the weekend: “Pricing margins have been so fat the past year or so that it almost didn’t matter how much you gave away, as you were still going to make a killing. Just a quick reminder that it won’t always be that way, so now’s a good time to start tracking concessions, and doing so by loan officer, branch, product, and so on”… Recently, Doma (formerly States Title) unveiled plans to go public via a special purpose acquisition company maneuver with Capitol Investment Corp. V. Susquehanna Financial noted, “The presentation that accompanied the announcement indicates the company has already established centralized relationships with large lenders including JPMorgan Chase, PennyMac, among others. These centralized relationships are usually set up to handle the refinance mortgage volume at a respective lender.” MORTGAGE PEOPLE: Cardinal Financial hired Jim Hopkins as senior vice president of retail residential lending. He joins the company from Envoy Mortgage, Houston, where he worked for almost 20 years. Is Your Compensation in Line With Your Peers? How do your pay and benefits measure up? IMF's survey tracking compensation — including salary, commission and incentives, and benefits — across the mortgage industry seeks to answer that question. Please take a few minutes to fill out Inside Mortgage Finance’s 2021 Salary Survey, and share the survey with your colleagues. The survey closes soon and once the results are compiled we’ll send you a brief report on compensation levels in the industry. It’s quick, easy and completely confidential. To ensure delivery to your inbox, add news@imfpubs.com to your address book or safe sender list. 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