Finance

These companies benefited from the strong refinance market in 2021, but are facing a different environment with fewer mortgage originations expected this year.

The company has been working to improve its bottom-line results by aggressively cutting expenses and repositioning its servicing operation to maximize its profitability, according to CEO Willie Newman.

The move confirms speculation that the Federal Housing Finance Agency would return to a pre-pandemic plan to tighten requirements for mortgage lenders and servicers that work with two government-sponsored enterprises.

“This puts the performance of inflation solidly back into the limelight” with the “risk that higher prices with the backdrop of heightened geopolitical uncertainty will ultimately be stagflationary.”

Athas Capital Group originated the mortgages, which have an average balance of $408,350, and an average weighted average (WA) original term of 362 months.

CDFI-originated loans are not required to comply with the Ability to Repay (ATR) rules, but the mortgages included were generally made to creditworthy borrowers.

Raising rates and running down the balance sheet “will bring down inflation over time," she said.

The 2022 origination outlook was dropped by $172 billion and for 2023, economists at the government-sponsored enterprise made a $226 billion reduction.

Despite a slowing in the private-label securitization market in January, lenders and investors are expecting a strong year for outside-the-box originations and their secondary market sales.

The portfolio is one of several particularly large, recent deals related to the cash-flows from mortgage payments, but it has an unusual composition.

About 58.1% of the loans are in California, while two California cities -- Los Angeles and San Diego -- make up the pool’s largest MSA concentrations.

Minutes of the Jan. 25-26 Federal Open Market Committee meeting, released Wednesday, “[tell] us that they will raise the fed funds rate in March, and that a 50 basis point rate hike is in play,” said Gus Faucher, chief economist for PNC Financial Services Group.

Current president Joe Nackashi will become CEO in place of Anthony Jabbour who will be taking the role of executive chairman.

"The quality of our new business is high. The pricing of that business does not reflect the capital requirements of our regulatory rule," CEO Hugh Frater said.

The company wants to redeploy resources into the wholesale mortgage channel that accounts for three-quarters of its production volume.

Monday’s rebound in yields also kicked in a resumption of curve flattening with the gap between 2- and 10-year yield falling almost 4 basis points to about 40.5 basis points.

The companies plan to collaborate on the development of a cloud-native servicing platform, which could result in a stronger competitor to dominant player Black Knight in the marketplace.

About 3.3% of loans in the deal fall into the 600-649 FICO bucket on the current Sunnova Helios VIII, 2022-A, compared with a 1.2% level in the 2021-C deal.

The nation's second largest title insurer reported lower fourth quarter earnings, but the shift to purchase transactions pushed revenue higher.

However, leadership noted that 2021 was the second record year for new single-family mortgages and also discussed how the government sponsored-enterprise plans to further rebuild its capital.