Editor’s Note: The Mortgage Mix is RISMedia’s weekly highlight reel of need-to-know mortgage-industry happenings. Watch for it each Friday afternoon.
- Demand for mortgages hit a 22-year low this week, according to the latest data from the Mortgage Bankers Association (MBA). An almost entirely gloomy year for lenders still has a chance to brighten, according to MBA VP Joel Kan, though that depends on big reversals in home prices and rates.
- Long-simmering eligibility changes proposed by the Federal Housing Finance Agency (FHFA) and Ginnie Mae for seller/servicers and issuers were announced this week. Both agencies claimed in a recent statement that the “enhanced eligibility requirements” reflect shared goals to improve the safety and soundness of the U.S. mortgage-backed securities (MBS) ecosystem through all economic cycles.
- The mighty continue to fall as Bloomberg reports that Wells Fargo—once a dominant force in mortgage lending—is planning to shrink its investments in that sector dramatically. Apart from the current broader economic distress, the bank has faced a multitude of recent controversies, including investigations that show it denied Black families refis at higher rates than white families and fines for overcharging consumers for rate lock-ins.
- The hits just keep on coming as the New York Times reports that loanDepot is in the crosshairs of a lawsuit claiming that a mortgage lender along with 20/20 Valuations, a Maryland appraisal company, undervalued a couple’s home based on their race.
- On a lighter note, nearly 70 mortgage lenders and brokers were featured in the Inc. 5000 list of fastest-growing companies in the U.S. for 2022. Leading the pack was theLender, a “non-QM” lender offering government and conventional mortgages. The Inc. 5000 newcomer—with a 20,489% three-year growth rate—snagged the 11th spot on the list.
- They just don’t make ‘em like they used to. In an economy still wracked with uncertainty, the latest Census data showed new home construction falling to the lowest level in over a year as homebuilders anxiously watch rates rise and buyers decline.
- Holy half-century, Batman! The UK approved a startup’s bid to offer 50-year fixed-rate mortgages this week, according to the Financial Times. Politicians previously floated the idea of having these loans pass down from generation to generation (no word on whether you would also inherit dad’s long-abandoned woodworking projects in the garage).
- They don’t rise out of graves, and they aren’t eating brains, but “zombie foreclosures” have always scared people. Luckily, these vacant, often blighted properties remain a non-threat to the overall market, according to the latest report from ATTOM Data Solutions, still only a fractional segment of foreclosures.
- Hope you don’t get motion sickness as rates dip yet again from their most recent jump last week, dropping nearly 10 basis points this week. Freddie Mac chief economist Sam Khater suggests that the surge in mortgage rates has halted as “inflation appears to be beyond its peak.”
Recent volatility in mortgage rates and the overall economy were the one-two combo that forced companies like Compass to take a step back and reassess their gameplan for the rest of the year after a lackluster second quarter where net losses grew. The company also reduced its annual sales forecast by roughly $1.5 billion based on a “big downturn” in the housing market.
