So, the MBA’s Secondary & Capital Markets Conference & Expo 2022 ended on May 18th in New York. Bob Broeksmit, the MBA’s president/CEO, told lenders that the mortgage boom of the past two years is done, and now lenders need to be ready to handle smaller volumes. MBA analysts have lowered the forecast for loan originations for this year and next. Broeksmit feels that the escalating mortgage rates have been putting tremendous pressure on new loans and refinances and right now the smart thing to do will be to scale down. While we are still witnessing homebuyers purchasing their dream homes and the prices are still rising at double-digits, sellers shouldn’t expect their profit margins to rise drastically. Demands will subside.
Home-lending rates in mid-May hit their highest level since 2009 on Freddie Mac
’s weekly U.S. average of 30-year fixed-rate mortgages, at 5.25%. Mortgage lenders have been crushed under the rising rates aided by inflation yet the speed of the increase might comprise an indicator of some good news. A factor in that mortgage-rate rise might be a degree of mortgage lenders protecting their pricing. One way that can be measured is by the spread—or difference in rates—between rates the one that the standard mortgage borrowers pay and what benchmark securitized packages of mortgages are yielding.
Honestly, the silver lining at this point is the mortgage servicing sector that has been crucial in helping offset the decline in lending activity. In the current rising rate industry, the chance of a loan getting refinanced falls, since rate/term refinances no longer make sense. This means that the servicer expects to get that servicing payment longer, and that makes the asset worth more. Our products, here at Vaultedge
, the Vaultedge Mortgage Automation and Vaultedge Income Analyzer have been designed keeping the loan servicer in mind and aims to expedite the loan boarding process.
We had collated a list of top sessions
to attend at the MBA’s Secondary & Capital Markets Conference & Expo 2022. If you have missed them, we are releasing a report summarizing the events at the meet. I enjoyed learning about the news and trends at the event. Met a host of interesting people, and learnt valuable life lessons along with a few tips on entrepreneurship. Also got to know that some of our clients are genuinely happy with our service (a little birdie told me!). Yes, there are ups and downs in the client journey trajectory but we emphasize putting the best foot forward. And in case we goof up, we owe it too. No shame in admitting that you are human.
So, that was an exciting week. How was yours? I would love to hear from you.