Finance

Net interest income was the driver, as increases from investments more than offset a decline related to its guaranty book of business.

The decline was driven by a $307M provision to cover potential credit losses, primarily from its single-family business.

The company says it’s making progress on other parts of its business-model revamp — including a shift to lower-cost deposit sources — while regulators weigh its application to buy Flagstar Bancorp in Troy, Michigan.

Pretax operating results were down by $79 million from the previous quarter, but the company estimates that by the end of the year, servicing income should be more than four times higher than the second quarter’s results.

The Seattle-based bank underestimated single-family loan declines in the larger market but was able to improve margins slightly with cost-cutting and by diversifying with a shift toward apartment lending.

The mortgage investor reported core earnings per share slightly below estimates and a loss in comprehensive income but may ultimately outperform competitors, analysts said.

Low-income housing tax credits that incent the creation of affordable apartment units have provisions that make buildings less susceptible to damage from natural disasters, but they’re not consistent, Freddie Mac found.

Earnings posted by the two bank holding companies show increased production on a quarter-to-quarter basis, although gain on sale sank at both.

Increased purchases among property investors and build-to-rent buyers is just part of what's driving competition these days.

Bank of America is keeping to its original hiring plans despite challenging economic conditions that have prompted others to pull back, Chief Executive Brian Moynihan said.

But these expenditures are still expected to increase by over 10% compared to 2021, which is more than double the 5% historical average, the Joint Center for Housing Studies of Harvard University said.

The agency also put out a request for public comment on the role of fintech in housing finance.

Inflation and higher interest rates are hurting distressed borrowers, but low unemployment, remaining forbearance and loss mitigation options are still blunting their impacts, recent loan-performance numbers suggest.

Delinquencies are likely to rise if both interest rates and inflation continue their upward movements, a DBRS Morningstar report said.

Like other mortgage lenders, the San Francisco megabank has been cutting staff since refinancing volumes started to fall. Additional layoffs are expected over the next couple of quarters, according to the bank’s chief financial officer.

These results are likely to be mirrored by the nonbank lenders when they report earnings, said Keefe, Bruyette & Woods.

Wells Fargo missed analysts’ earnings estimates as home lending slowed and the bank set aside more than expected for potentially soured loans as the Federal Reserve’s rate hikes started to cool the once-hot housing market.

The San Francisco bank reported a 31% increase in loan originations during the second quarter. Analysts are wondering whether it will be able to secure enough low-cost funds to avoid eroding margins.

The company looks to leverage its understanding of credit risk developed through its mortgage insurance and analytics operations.

The government-sponsored enterprises divested themselves of the largest share of these loans since they first began selling them in 2014, a Federal Housing Finance Agency report found.