Banks can mitigate damage from slowing origination activity by putting excess cash to work, Keefe, Bruyette & Woods said.

The forward and reverse mortgage lender completed its merger with blank check company Replay Acquisition Corp. on April 1.

The San Diego-based company produced $10.6 billion in the fourth quarter, and has done $6.1 billion in the first two months of 2021.

The company posted an $88 million loss for 2020 after shutting down for nearly the entire second quarter.

After a booming 2020, more mortgage lenders than ever before expect diminishing margins in the coming months as climbing interest rates set up heightened competition.

Mortgage brokers are telling the company that they "are looking for another large source," according to President and CEO Willie Newman.

But profitability may have peaked. Rocket reported a 4.41% profit margin on newly originated loans last quarter but told investors on Thursday to expect margins on new loans this quarter to be around 3.6% to 3.9%.

As its mortgage origination volume delivered another quarter of strong earnings, Mr. Cooper’s banking on its "enormous backlog" of REO orders to generate further profitability once the foreclosure moratorium is lifted.

The newly public digital mortgage giant is relying on a diverse set of loan channels to take on competitors in an increasingly crowded field, CEO Anthony Hsieh said in an earnings call this week.

Also: New Residential, Fannie Mae and Freddie Mac release Q4 earnings reports

While its net income declined annually for the second consecutive year, CEO Hugh Frater touted Fannie Mae’s resiliency in a record year for providing mortgage liquidity.

The company purchased $1.1 trillion of single-family mortgages and $83 billion of multifamily loans during 2020.

The growing popularity of the company’s websites and apps has earned the company record profits during the fourth quarter, with adjusted earnings before interest, taxes, depreciation and amortization of $170 million, according to a statement on Wednesday.

The agreement would generate $250 million in proceeds, which the nonbank mortgage company plans to use to pay down and refinance existing debt, while also investing in its servicing and origination businesses.

But the company sees reasons to be optimistic about the second half of the year, CEO and Chairman Michael Nierenberg said during its fourth quarter earnings call

Even as the company posted record numbers, it could have originated more loans if it had not stopped buying FHA and jumbo mortgages from brokers.

Pretax operating margins came in much narrower than what is projected for the three stand-alone underwriters.

The company also reported a large fourth-quarter loss that reflected a significant increase in its loan-loss provision.

For a surprising number of companies pursuing an IPO is a mistake, Endurance Advisory Partners CEO Stephen Curry says.

The auto finance company, which had stumbled in forays into the credit card business, is now seeing rapid growth in mortgage and unsecured consumer lending.