National Mortgage News - May 2021

SMACKDOWN!

United Wholesale Mortgage set off a brawl in the press when it forbade brokers from doing business with Rocket and Fairway. As a small group of brokers pursue legal action over the ultimatum, experts weigh in on whether the spat is benefiting the wholesale channel.

Fluctuating rules are redirecting some government-related loans to a disparate private market.

Given the Biden Administration’s regulatory emphasis on the disparate impact of mortgage lender activity on protected classes, originators need to carefully monitor their loan price concessions, according to industry speakers at the Mortgage Bankers Association's Spring Conference.

First quarter volume was up 3% among eight depositories that reported so far, compared with models that predicted industry-wide drops as large as 13%.

Nonbanks claimed more of the top slots based on loan volume, while the origination gains experienced by Hispanic, Black and Native American borrowers were weaker than those of other groups.

However, companies were largely unable to use that cash infusion to make investments that lower their costs, since they had to pay out more in compensation.

System updates, which may be a result of changes to the Preferred Stock Purchase Agreements, have Community Home Lenders Association members saying loans that were approved previously are getting rejected when put back through.

Servicers of loans not related to the government most often capitalized missed payments and converted them into a deferred, non-amortizing balance, said Vadim Verkhoglyad of dv01.

Though the government-sponsored enterprises have some of the lowest forbearance rates in the market, they expect to contend with a significant population of borrowers who face steep financial setbacks after the pandemic ends.

“You all will not let me breathe” is just one example in the Consumer Financial Protection Bureau's complaint database where a consumer likened alleged mistreatment by a financial institution to social injustice. An artificial intelligence firm uses technology to help companies flag such language.

The Consumer Financial Protection Bureau's revocation of a Trump-era policy on abusive practices could mean higher fines and penalties for violators. But it still isn't clear what makes a practice abusive.

For a lot of IMBs facing shrinking backlogs and falling secondary market spreads, the attraction of hitting a bid and taking the easy way out via an acquisition may become irresistible, writes Chris Whalen.