Agency MBS Issuance Increases in April; Refis Down
jbancroft@imfpubs.com
Ginnie Mae, Freddie Mac and Fannie Mae printed $85.14 billion of new single-family
mortgage-backed securities in April, a 9.6% gain from March, according to a new
ranking and analysis by Inside MBS & ABS.
The increase was driven by purchase mortgages, with volume up 11.3% on a monthly
basis to $67.87 billion.
The surge in agency refinance business that first showed up in the February data
may be cooling off. Total refi securitization by the agencies
was down 5.2% from March.
United Wholesale Mortgage, the largest seller of loans to agency MBS, increased
its monthly sales by 30.7% to $10.01 billion in April.
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Credit Score Costs Jump; Lenders Point to Lack of Competition
dhollier@imfpubs.com
The cost tied to credit scores when originating a mortgage has increased from
about $50 in 2022 to nearly $250 today, according to a recent white paper
from the Community Home Lenders of America.
And if the costs of credit pulls for applications that didn’t close are added,
lenders’ costs have climbed from between $200 and $250 in 2022 to
between $510 and $725 — or more.
In addition to the FICO price hikes, the big three credit reporting agencies
— Equifax, Experian and TransUnion — have also raised prices. And all
four companies, CHLA said, benefit from near monopolies in the
mortgage market.
During FICO’s first-quarter earnings call, CEO Will Lansing addressed
the criticism over the price increases, saying the firm was “catching up
from 30 years of frozen pricing.” He added, “It’s important for everyone
to understand that we’re talking about single-digit dollars in a bundle
that costs the consumer about $6,000.”
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Investors Showing Strong Demand for Non-Agency Loans
jdohnert@imfpubs.com
Maxex, which operates a non-agency platform for trading mortgages,
is seeing increased demand from investors for both non-qualified
mortgages and jumbos. Buyers increasing their allocations to the
sector include insurance companies.
Bill Decker, president and chief operating officer of Maxex, during a
webinar last week said the strong demand for non-QMs comes as
interest rate volatility has had a greater impact on agency production.
“These [non-QM] assets have been somewhat insulated from the
[interest] rate rise,” he said.
Greg Faranello, head of US rates at AmeriVet Securities, a broker-dealer,
said he expects investor activity on the secondary market to continue
improving as the market has dialed back its expectations on interest
rate cuts this year.
“At the end of the day, we’ve hit a decent point here where the market
has repriced and the [Federal Reserve] narrative has changed to
market pricing,” Faranello said. “Given the data that we’re seeing
right now, the markets are in a much better place.”
