Refis Took Home the Gold in 2020; The Rocket Rollercoaster (Shorts) - IMFnews

Share Register Advertise March 04, 2021 A Strong Year for Purchase Lending but Refis Took Home the Gold jbancroft@imfpubs.com Given the widespread economic damage caused by the pandemic, the business of providing mortgage credit to homebuyers was remarkably strong in 2020. But refinance lending deservedly got most of the attention. Lenders originated an estimated $1.431 trillion of home-purchase loans last year, a solid 13.9% increase from 2019, according to exclusive survey figures compiled by Inside Mortgage Finance. 2020 was the strongest purchase-mortgage market on record, but it accounted for just 35.4% of total first-lien originations. Total refinance lending came to an estimated $2.609 trillion last year, also a record, and a whopping 144.1% increase from 2019. The refi frenzy was still peaking at the end of the year, climbing 14.9% from the third quarter to an estimated $825 billion in the fourth. For full details and production tables, see the new edition of Inside Mortgage Finance. Rocket, the Seventh Most Shorted Stock in America. Meaning? pmuolo@imfpubs.com Rocket Companies holds the distinction of owning the nation’s top-ranked home lender Quicken Loans, but this week it was garnering unwanted attention for the volatility of its share price. On Tuesday, Rocket had an especially tasty day, spiking a stunning 72%, sparking comparisons to GameStop, the (rollercoaster) gaming retailer. On Wednesday, the share price fell 33.1% to $28.01. As IMFnews went to press Thursday, the stock was down 4.1% after opening higher. According to figures compiled by MarketWatch, Rocket is the seventh most shorted stock in America, with 39.7% of the float being shorted. No other mortgage stock makes the top 40. But why the short action? Speculators are betting that with rates rising the stellar profits and gain-on-sale numbers are a thing of the past. A Year Gone, Time to Head Back to the Office? Maybe Not mvolkova@imfpubs.com It’s been a year since an overwhelming majority of mortgage lenders, just like most other businesses, decided to switch to remote work in response to the pandemic. However, there seems to be no sense of urgency to return to offices, even with a COVID-19 vaccine available. Mike Baldwin, senior vice president of Oregon-based Directors Mortgage, said working remotely has worked really well for the company and “everyone has adapted professionally.” He added: “Productivity is up along with the volume, so we have been very pleased. I really can’t cite any challenges that arose from working remotely. We’ll continue to be flexible.” A spokesperson for Flagstar Bank said the pandemic has been the “impetus” for more regular communication among employees as well as for innovations such as “physically distanced garage closings for home loans and branch visits by appointment for banking customers.” For the full story, see the new edition of Inside Mortgage Trends, available online Friday. CFPB Wants to Delay Mandatory Compliance Date for General QM Rule lburden@imfpubs.com The Consumer Financial Protection Bureau Wednesday afternoon issued a notice of proposed rulemaking that would delay the mandatory compliance date of the general qualified mortgage rule 15 months to Oct. 1, 2022. In a statement, the bureau said “extending the mandatory compliance date of the general QM final rule would allow lenders more time to offer QM loans based on the homeowners’ debt-to-income ratio, and not solely based on a pricing cut-off.” The agency also said that extending the compliance date of the general QM final rule will give lenders more time to use the GSE “patch.” The bureau noted that, if the NPRM is finalized as proposed, the DTI-based general QM definition, the price-based general QM definition and the GSE patch will all be available as long as the lender receives the consumer’s application before Oct. 1, 2022. For more details, see the new edition of Inside Mortgage Finance. Short Takes: The GSE Headcount / FHFA’s Hiring Plans / Rich Short, Poor Short / Mortgage Shorts that Worked / The 30-Year FRM Cracks 3% pmuolo@imfpubs.com, dhollier@imfpubs.com Early last year when it looked as though Fannie Mae and Freddie Mac would be allowed to complete “re-IPOs,” it was thought they might reduce headcount as a way to trim expenses. But it didn’t turn out that way. The re-IPOs became a pipe dream and the employee base of the two mortgage giants actually grew.... But what about their regulator, the Federal Housing Finance Agency? Smaller portfolios should mean less work for examiners. Right? Maybe not. According to publicly available materials, the FHFA plans to increase its headcount from 635 in 2020 to 748 in 2021... In today’s edition of IMFnews we report on short sellers targeting Rocket Companies, a bet that could either make someone rich or wish they’d never been born. Time will tell. Mortgage historians might recall that last decade Ocwen and Ditech Financial were major targets of the shorts. Both those bets turned out well for the speculators. Ditech eventually went bust and Ocwen’s stock, once at $60 a share, fell to under $1. Not too long ago Ocwen engineered a reverse stock split... Ellington Financial has come to market with a $251.8 million MBS backed by non-QM loans. The collateral comes from LendSure, a nonbank originator it owns a stake in. IN CASE YOU MISSED IT: For the week ending March 4, the average reading on a 30-year fixed-rate mortgage came to 3.02%, up from 2.97% the week before. According to Freddie Mac, a year ago the going rate was 3.29%. Spread the Word: Please Pass Along IMF’s Salary Survey to Your Colleagues Inside Mortgage Finance is looking for more respondents to our annual survey tracking compensation — including salary, commission and incentives, and benefits — in the mortgage industry. Please click here to answer some questions about your job function, salary, benefits and career satisfaction … and if you’ve already filled out Salary Survey 2021 (thank you!) please forward it to a colleague. - To ensure delivery to your inbox, add news@imfpubs.com to your address book or safe sender list. Home | Update Your Account | Mortgage Data | User Agreement | Unsubscribe © Copyright 2020 Inside Mortgage Finance Publications 7910 Woodmont Ave., Suite 1000, Bethesda, MD 20814 Tel: (301) 951-1240; Fax: (301) 656-1709

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