How mortgage lenders can ensure liquidity and grow today

A pair of mortgage lenders had divergent views on picking up more market share right now, given the state of the industry, as part of a Mortgage Bankers Association Secondary & Capital Markets conference panel on staying financially viable. At the end of last year, thinking it was going to be a short-term high interest rate environment, Axia Home Loans was aggressive in looking to add business. However, "mortgage is one of those funny industries where when it's good, all market share is great," said CEO Alexander Rosenblum, "and when it's bad, a lot of market share is not great." So Axia's approach has shifted since the start of the year to become much more selective in terms of the market share it is going after, by adding at the loan originator level. Guild Mortgage, on the other hand, hasn't changed its strategy.

READ MORE: How mortgage lenders can ensure liquidity and grow today

Fannie Mae, Freddie Mac execs confront mortgage repurchase issues

"It's a mutual responsibility of the industry to manage our risk," said Kevin Kauffman, Freddie Mac's senior vice president of customer engagement, when asked Tuesday about the repurchases the GSEs direct a lender to absorb in some cases when they discover origination defects. Some lenders have asked whether Fannie and Freddie could cut them on a break on all performing loans with flaws and allow them to indemnify the mortgages instead of potentially absorbing a loss due to the need to sell mortgages at discounts in the scratch-and-dent market. The GSEs already do offer indemnification in some circumstances, usually when the defect is considered lower on the scale of materiality drawn up in past industry negotiations.

Doma sells some California offices to WFG for $24.5M

Doma, the former Lennar-affiliated title insurance underwriting business that went public in July 2021, has sold a chunk of its operations to Williston Financial Group. Based on year-end American Land Title Association market share numbers, Doma was the 10th largest brand at 1.8% while WFG National Title Insurance was ninth at 2.5% (a title holding company can have more than one brand, with three of the top 10 being units of Fidelity National Financial). Williston will pay up to $24.5 million, $10.5 million of that was done on May 19 and the rest will be due within 30 days after the first anniversary of the deal, with the exact amount based on certain conditions, a Securities and Exchange Commission filing said.?

Debt fight contributes to higher rates, lower mortgage activity

Home loan applications dropped for a second week in a row, as concerns over debt-ceiling negotiations helped drive interest rates up, the Mortgage Bankers Association said. The MBA's Market Composite Index fell a seasonally adjusted 4.6% for the period ending May 19, after a 5.7% decrease seven days earlier. Application volumes also sat 35% below levels during the same time frame in 2022, with both purchase and refinance activity lower last week. The 30-year contract fixed rate for conforming mortgages with balances below $726,200 jumped up 12 basis points to an average of 6.69%, its highest point since March.

MSR market participants offer mixed outlook on buyer interest

Forecasts from the mortgage servicing rights market have been strong, but stakeholders are watching carefully to see how buyer interest holds up this year. Some panelists at an industry conference said they've seen new players coming in, others haven't. "I think there's a lot of capital that wants to go into MSRs," Christopher King, senior vice president of business development at Mr. Cooper told attendees at the Mortgage Bankers Association's secondary market conference. Both bank and nondepository investors have been "consistently active," he said. Dan Fleishman, managing director, RiskSpan, said he's seen some new entrants, but that some buyers are selective. "Some investors just want to play in the low coupons," he said.

Sign up here to receive the National Mortgage News complete newsletter — delivered to your inbox daily.