Welcome back to iLeads Mortgage Market Minute, where we bring you the latest, most relevant news regarding the mortgage market. We hope you enjoyed last week’s edition where we talked about It’s Still Really Difficult To Get A Mortgage, But Getting Easier. This week we’re bringing you:
MBS RECAP: Panic In The Bond Market*
It’s no mystery that longer-term Treasury yields have been trending higher since August (it’s all we can talk about at times) and that mortgage rates have largely been able to ignore that trend. But that blissful ignorance is increasingly hard to maintain–a fact that hits home on days like today. For a variety of reasons, today was a big bad day for Treasuries. As feared, MBS were painfully unable to outperform, and the same can be said of mortgage rates compared to MBS prices. Bottom line: rates rose sharply. Multiple lenders repriced for the worse. This is part of an ongoing, widespread reevaluation of economic and monetary outcomes as told by the bond market. There’s no guarantee that things get better before they get worse.
A closer look at Ginnie Mae’s latest digital efforts*
An in-depth look at Ginnie Mae’s recent acceptance of eNotes
This HousingWire Daily interview transcription features an interview with with Angel Hernandez, Ginnie Mae director of MBS policy and program development.
Ginnie Mae recently began accepting eNotes and even guaranteed its first digital pool of mortgage backed securities, which was made possible by its ongoing Digital Collateral Program.
This new focus on digital at Ginnie Mae could provide significant benefits for the housing market. The company said it expects to witness an increase in its volume of eNotes securitized under its MBS Program for 2021.
Rocket Mortgage, which originated the first eNotes under Ginnie Mae’s pilot program, agreed that the housing industry will soon see higher adoption rates of the digital mortgage, saying the program could even become much more popular by the end of 2021.
Long way to go in the 10-year before we get nervous: Investor*
Rates Surge; Time To Adjust Your Mortgage Game Plan*
Recovery prospects, renewed focus on stimulus, inflation concerns, a brighter covid outlook, etc… All of these are reasons for an ongoing, gradual trend toward higher rates in 2021 (i.e. general bond market weakness) but none of them really explain why the bond market had its worst day in months today specifically. Still, pundits are pointing to the laundry list of usual suspects to explain the move. In their defense, that’s all anyone can really do on a day like today. At a certain point market momentum becomes its own justification and bond prices snowball to lower and lower levels.
When bond prices fall, rates rise–a fact which is abundantly clear in comparing today’s rates to those seen late last week. The average lender is quoting conventional 30yr fixed rates that are roughly 1/8th of a percent higher, and that’s a huge move for a single trading day.
Is there any hope on the horizon? Well, there’s always hope, depending on one’s definition. In outright terms, the average 30yr fixed rate is still under 3%, so the world (of low rates) is far from over. Additionally, it is true that markets tend to recover after moving quickly in one direction or another, even if that recovery is only temporary. And the recent push toward higher rates certainly qualifies as a quick move.
How to survive this “unprecedented” era of digital mortgage*
6 trends lenders need to pay attention to
Writing about digital mortgage in 2021, I am reminded of a cartoon in the New Yorker, in which two cavemen were starting a fire and one said “Stop saying everything is ‘unprecedented.’” After a year of unprecedented everything, including mortgage volume, it’s hard to fathom the level of fintech disruption that is approaching financial services and specifically mortgage.
Pandemic or not, artificial intelligence and consumer expectations have been accelerating at “unprecedented” levels all on their own. Last year, traditional institutions were forced to manage their businesses remotely and consumers adapted to completely digital purchasing experiences. The digital experience has changed forever, and no one is turning back.
While lenders continue to have record volume in 2021, they cannot ignore the digital revolution that will either make or break their business in 2022 and beyond. In this article, I’ll highlight just a few of the biggest trends I believe will impact the way consumers interact with mortgages in the near-to-present future.
#1 Personalization
As demonstrated in the brilliant UWM Superbowl ad, Millennial homebuyers are looking to technology to match them with the right partners in life, including their mortgage. I can set filters for my partner search on Bumble, so why can’t I filter results for a mortgage broker? These are the kinds of questions consumers are asking when artificial intelligence is powering every aspect of their lives, except the biggest financial one. With smarter and faster data, a personalized service experience is key for the future of lending.
#2 Digital adoption
While Blend has led the industry in capturing 25% of the mortgage market, they have also been challenged with low adoption rates. However, the Point of Sale category took a turn for the better in 2020. Bank of America recently reported that their digital mortgage transactions have nearly doubled over the past year, citing 68% of all consumer mortgage sales were made digitally in 2020, compared with just 36% in 2019.
Finding highly affordable leads to keep sales coming in
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