Conforming Loan Access At Nine Year Low | Mortgage Credit Deep Insights

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iLeads Mortgage Market Minute

Even as the economy is improving, access to mortgage credit fell in January as investors cut back their demand for some products. We hope you enjoyed last week’s edition where we talked about Ron Terwilliger On How To Make More Affordable Housing? This week we’re bringing you:

 

Lender/Broker Products; Events and Training; Cap Markets Update*

 

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Sure, Fannie had $5.2 billion of net income in the fourth quarter of 2021, but money can’t buy you love. Love is more of a chemical reaction than a statistical study, but computers don’t deal so well with that. But stats will tell you that apparently the best place to find love is Buffalo, New York.

Lending Tree released a report considering seven variables, including median single-person household income as well as the percentage of the population that isn’t married, or lives alone, to help determine which of the nation’s 50 largest metros are the best for single people. Rounding out the top five were Cleveland, Louisville, Detroit, and a tie between St. Louis and New Orleans. MLOs know that because single people often can’t rely on a “significant other” to bring in extra income, they need to take extra care that they’ve got enough money to make ends meet… or make a mortgage payment so areas with low costs of living can be great options for singles.

While we’re on costs, MLOs can add value to their clients by knowing The True Cost of Homeownership 2022. Homeowners say their house requires too much maintenance (40%), is too small or lacks features (32%), or they didn’t prepare for the hidden costs (30%). “With inflation on the rise, the share of homeowners spending over 40% of household income on their home has nearly doubled since before the pandemic.”

Read more in-depth here.

 

To free up cash, Homepoint will outsource servicing*

ServiceMac, a First American company, will handle the servicing operations and hire Homepoint’s former employees

 

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Michigan-based wholesale lender Homepoint announced on Monday that ServiceMac, a First American company, will handle its servicing operations.

The decision allows the lender to focus on growing its originations business. Critically, the move reduces Homepoint’s costs, which is a topic of criticism among mortgage stock analysts.

Homepoint has over 300 employees in mortgage servicing operations, who will be laid off but subsequently hired by ServiceMac, according to a spokesperson.

“All of our 300+ servicing associates will have the opportunity to join the experienced ServiceMac team as part of this transition that kicks off next quarter,” the spokesperson told HousingWire.

ServiceMac will begin servicing loans on behalf of Homepoint in the second quarter. The Homepoint brand will still appear on all servicing communications, and Homepoint will support retention efforts through “Customer for Life” programming.

Terms of the deal were not disclosed.

Why 2022 could open more opportunities for subservicing

With production volumes flattening out and non-QM originations increasing, the need for originators to focus resources and cost on the front end of the business could lead to more subservicing opportunities.

Read more in-depth here.

 

Conforming Loan Access at Nine Year Low*

 

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The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) for the month fell 0.9 percent to 124.8. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

Four components make up the MCAI and only the index reflecting access to government guaranteed products moved higher. The Conventional MCAI decreased 2.5 percent, while the Government MCAI increased by 0.7 percent. The Conventional MCAI has two components of its own; the Jumbo MCAI decreased by 1.6 percent, and the Conforming MCAI fell by 4.2 percent.

“Credit availability declined to its lowest level since August 2021, even as the economy and job market continued to improve,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “The decline in credit supply came at a time of rising mortgage rates and limited inventory, which add to the challenges that some prospective buyers are facing. The supply of conforming mortgage credit dropped to its lowest level dating back to 2013, driven by a decrease in investor demand for loan programs catering to borrowers with higher LTVs and lower credit score profiles.”

Added Kan, “Prior to last month, there were six months of increasing jumbo credit supply, driven by strong demand, rapid home-price appreciation, and the overall strength in the economy. That growth streak ended last month, as investors reduced their willingness to purchase jumbo loans and also raised credit requirements.”

Read more in-depth here.

 

Finding highly affordable leads to keep sales coming in

At iLeads, we have many great solutions for mortgage LO’s at a low cost. If you’d like to see how we can help you bring in consistent sales for a great price, give us a call at (877) 245-3237!

We’re free and are taking phone-calls from 7AM to 5PM PST, Monday through Friday.

You can also schedule a call here.

 

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