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By Sanat from Vaultedge

Vaultedge Newsletter - Mortgage Rates Dip Below 5% , Layoffs double in July

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Vaultedge Newsletter - Mortgage Rates Dip Below 5% , Layoffs double in July
By Sanat from Vaultedge • Issue #50 • View online
Ok, let’s begin with some great news first. Vautedge is available on Microsoft Appsource now. You can connect with your favorite Microsoft salesperson and buy Vaultedge software through him/her. Of course, we will always be there to support you. Look us up!
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 Federal Reserve raised its interest rates by 75 basis points and I feel that the business debt is going to be extremely expensive and the monthly installments on variable loans will be higher and a drain on cash flow. The biggest way that the higher rates may hurt small businesses is in the overall economic and market effect. Most economists feel that this way business owners will hurt less. They are divided on what’s to come: Some believe rates have already peaked; others say they’ll climb until or unless the nation’s economy officially enters a recession. According to Freddie Mac, the housing market is still witnessing demand crumble even as borrowing costs have eased a bit of late. 
The 30-year fixed rate mortgage slipped to 5.30% for the week ending July 28 from 5.54% in the week of 21st July. The 15-year fixed rate fell to 4.58% from 4.75%. The declines follow a dip in Treasury yields, which have pulled back amid growing fears of a recession.
The Fed rate hike will increase short-term rates like credit cards, auto loans, and home equity lines of credit, but also boost the interest rate on savings accounts. According to Wall Street, the Feds will start to cut down the rates again in March 2023 based on expectations for a much weaker economy.
One may wonder why the Feds’ decision on spiking the interest rates directly impact long-term rates like mortgages. But it’s about the timing. See, the market is dynamic and keeps on changing every millisecond while the Fed meets like eight times a year. When they announce the change in rates, the market has already moved ahead, owing to their futuristic insights (there are groups devoted to predicting the trends). This hasn’t been the case, but in the era of transparency, especially when you hear the Fed leaders talk about the shift in rates to a 0.75% hike almost seven times in a year, the change is guaranteed.
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Fannie Mae released its quarterly report last month. The report shows that it remains severely undercapitalized, even as it reported solid earnings for the second quarter of 2022. It was $6.2 billion in 2018, and Fannie Mae’s net worth had seen a remarkable increase of about 810%. However, this year its net worth at the end of the second quarter was $56.4 billion, up nearly 19% from $47.4 billion at the end of 2021. It reported a second-quarter net income of $4.7 billion, up 6.8% from $4.4 billion in the first quarter but down 34.7% from $7.2 billion in the second quarter of last year.
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Zillow is making an exit from the iBuying business. But its plans for the future led to its shares descending in extended trading last Thursday. This decline is expected to continue. It covers the periods in which it frantically sold houses that it bought in too large a quantity and at high prices last year, an effort that included just 71 homes for sale at the end of the second quarter. 
The Detroit-based firm, Rocket Mortgage has seen a major reversal in its net income, from $1.04 billion in the second quarter of 2021 to $60 million in the second quarter of 2022. Now, Rocket is focused on adapting its mortgage operations to the current market environment.
Freedom Mortgage has decided to sell the nonbank mortgage servicer, Roundpoint Mortgage Servicing to Matrix Financial Services Corp. This comes after Freedom acquired Roundpoint two years ago. The purchase had increased Freedom’s combined owned and subserviced MSR portfolio to $310 billion. The forthcoming acquisition is an all-stock deal, with Matrix agreeing to pay a preliminary price equal to the tangible net book value of RoundPoint, plus a $10.5 million premium.
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Amidst the rising interest rates, a glimmer of hope was seen, and President Biden’s move to tackle the housing supply crisis was applauded by industry stalwarts. The government’s ‘Housing Supply Action Plan’, reported that they will increase the efforts for making the ARP’s funding to expand easier for the state, local, and tribal bodies. Last year NAR’s commissioned landmark research report showed a lack of 5.5 million homes in the nation, a massive gap that would take years to bridge. The plan also framed a particular focus on building and preserving rental housing for low- and moderate-income families. 
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The Housing Trends Report created by the NAHB Economics team to measure prospective home buyers’ perceptions about the availability and affordability of homes for sale in their markets, reported that first-time buyers retreat. Their share among all prospective buyers peaked at 65% in the 3rd quarter of 2021 but has now fallen for three straight quarters, to reach 59% - its lowest point in almost two years (56% in Q320).  
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Mortgage banks let go around 9,300 full-time employees in June and more than double in July according to the numbers released by the U.S. Bureau of Labor Statistics. The reason for handing out the pink slips is the rising interest rates. Higher interest rates have hurt the refi market and hindered purchases forcing mortgage lenders to restructure their organizational structure.
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We don’t enjoy interrogating our audience with too many questions unless it’s about our offerings or a life-changing pasta recipe. But, we would love to hear your thoughts on our newsletter. What do you like about it? What can be changed/improved? All suggestions are welcomed.
And in case you are interested to know how we can transform the lives of your Loan Officers and Underwriters, schedule a call with us
Happy reading!

For 1st Time Since April, Mortgage Rates Dip Below 5%
Fannie Mae Says It's $262B Short Of Being Fully Capitalized
Fed hikes rate by 75 bps, back to 2018 level - HousingWire
Mortgage rates fall sharply after negative GDP report and Fed's latest hike
Zillow tumbles amid housing downturn
Freedom Mortgage agrees to sell RoundPoint Mortgage Servicing 
A Huge 2Q Revenue Drop for Rocket as Declining Refis Take Their Toll
NAR Commends U.S. Treasury For New Action On Housing Affordability – NMP
Some Buyers Turning to New Construction | Eye On Housing
Justice Department and CFPB Secure Agreement with Trident Mortgage Company to Resolve Lending Discrimination Claims
Mortgage Layoffs Double and Then Some
Expect a foreclosure spike in the coming months
Borrowers in urban areas struggle the most to meet their mortgage, study shows
Vaultedge is now available on Microsoft AppSource
Vaultedge is now available on Microsoft AppSource
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Sanat from Vaultedge

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