Why non QM bids have been in a sweet spot for loan sellers

The secondary market for loans originated outside of the qualified mortgage definition has had its highs and lows the last four years, but recently it's been in a good place for lenders. That's in part because both securitizers and insurers have been competing to buy the product. "You've been getting back to this kind of interesting spot where it is a combination of the two," said Mack Walker, senior vice president of capital markets at Deephaven Mortgage. The higher prices available for loans underwritten using alternative measures like bank statements and debt-service coverage ratios have been valuable to lenders at a time when the profitability has been under pressure, so their drivers are important to understand.

READ MORE: Why non QM bids have been in a sweet spot for loan sellers

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Details from mortgage lender Q2 filings you may have missed

10-Q filings with the SEC reveal additional information regarding the financial wherewithal of public mortgage lenders in the second quarter. Rocket Cos. saw subscriptions for its Rocket Money personal finance app rise but revenue for its appraisal service dip. Guild Mortgage and United Wholesale Mortgage added jobs, while Loandepot and Finance of America reduced their payrolls. Read on for more earnings insights.

Fidelity, First American, Stewart, Old Republic report 2Q profits

With the spring 2024 home purchase season falling short of expectations, publicly traded title insurers reported a meh second quarter. In its Aug. 15 reports affirming First American's and Stewart's rating, Fitch said "Margin compression has been driven by higher interest rates and home affordability challenges that has limited origination activity." The business is affected by the broader macroeconomic trends which continue to pressure top-line revenues, Fitch noted in its report on Fidelity National Financial. "Elevated mortgage rates and increased affordability concerns continue to suppress both refinance and new purchase origination transactions, a trend which is expected to persist over the near term," the FNF comments said.

Loan Think: What 2025's housing finance agenda should be

Over the past month, NMN asked industry leaders and housing analysts what they would like to see in a future agenda for housing finance in 2025. This is not so much a political commentary as a cry for relief after four years of technical chaos and progressive ineptitude under the Biden Administration. Former President Donald Trump ignored the world of housing finance, but President Joe Biden imposed a new world order of progressive economic policies and operationally unworkable regulations to "help consumers," but at a vast cost to taxpayers and private industry. As one leading industry CEO told NMN: "The best thing would be to leave everything alone."

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