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Vaultedge Newsletter - Is Fed's rate hike "already" triggering a domino effect ?

Vaultedge Newsletter - Is Fed's rate hike "already" triggering a domino effect ?
By Sanat from Vaultedge • Issue #61 • View online
Moving from last week to this one - it seems that Fed interest rate hike, is something that’s keeping the mortgage industry on its toes.
In some sense, a domino effect seems to have kicked off.
With interest rate hike for fourth straight time, purchase & refi originations have taken a massive hit. Lenders are not only looking at cost rationalization measures, but also at business restructuring & alternate revenue streams to tide over the slump.
Industry consolidation, with a view to leverage cross business synergies & arrest margin compression, is at an all time high. STRATMOR Group anticipates that nearly 50 merger or acquisition (M&A) transactions will be announced or closed, by end of 2022.
While this happens, lenders are looking at offloading their MSR portfolio, to add new non-mortgage revenue streams. Case in point - large lenders like UWM, Homepoint & Rocket Mortgage are turning net sellers of MSR portfolio.
On the other hand, servicers are preparing to ingest these bulk volume of MSRs, within a short window while ensuring all necessary compliance to regulatory requirements.
This means, they have to double down on their servicing infrastructure & technology adoption to handle this transition seamlessly.
At the same time, they also have to prepare for a surge in ARM loans - which is a natural outcome of the rise in 30-year fixed rate, as ARM loans offer better terms to home owners.
With so much flux, spotlight is on how servicers can maneuver such a challenging environment. Though, it is more of wait & watch play, to get fresh perspectives around these issues, our leadership team is at 8th Annual Residential Mortgage Servicing Rights Forum (Nov 14-15) at New York.
If you’re attending the event, we would love to meet you. Hit us up at this email ID: [email protected]
So with so much going on, let’s look at some of the key events from last week
Here’s a quick weekly round up.

Weekly Roundup
Feds' latest rate hike has experts pondering if mortgage rates will drop in 'another year or two'
MBA Weekly Survey Nov. 9, 2022: Rates Rise; Refis Fall to 22-Year Low - MBA Newslink
Mortgage lenders do what they can to survive rising rates: Morning Brief
How Mortgage Servicers Can Navigate Rising ARMs Successfully - MortgageOrb
Ravi Shankar to Head Freddie Mac’s Single-Family Portfolio, Servicing – DSNews
Spotlight: What's new at Vaultedge
Vaultedge at 8th Annual Residential Mortgage Servicing Rights Forum
We’re super excited to be closing the “eventful” year with 8th Annual Residential Mortgage Servicing Rights Forum. Having worked with some of the largest mortgage servicers in the country - PHH Ocwen, Valon Mortgage and BSI Financial, this is an event we can’t miss. We’re looking forward to industry perspectives on challenges faced during MSR portfolio life-cycle & roadmap for 2023.
If you’re at the, then let’s meet. Drop us a note at [email protected] & we’ll work out a meeting schedule with you.
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Till next time…stay happy, stay healthy 😊
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Sanat from Vaultedge

We write about the future of mortgages, real estate and automation.

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