Secondary

The mortgage giant’s net worth of $42 billion at the end of the quarter was more than double what it was a year earlier. CEO Hugh Frater said that financial strength puts the company on better footing to support affordable housing goals outlined by the Federal Housing Finance Agency.

The move by the agency, which is an arm of the Department of Housing and Urban Development, will help further efforts to give servicers more leeway to modify mortgage terms.

The combined refinance and purchase total was nearly double the average quarterly volume logged before the pandemic, the company said in its third-quarter earnings call.

Benchmark will issue 21 classes of certificates, with 13 entitled to principal and interest payments. Six classes will receive interest only.

Mortgage servicing rights can look more attractive to originators as they become increasingly interested in building their customer base, but some may want to sell due to thinner margins or regulatory uncertainty.

The company is making progress on a focus shift to recurring revenues from transactional activities.

The company sees an opportunity as its competitors have to sell to make up for lost income due to tighter origination margins.

The company also locked a record $4.7 billion in jumbo loans and significantly increased its business purpose lending from a year ago as its revenue mix shifted toward its taxable subsidiary.

The increased complexity of loss mitigation in the wake of the pandemic has increasingly prompted a growing number of mid-sized players to outsource, so constraints on one player could affect others.

The deal for Michigan-based Flagstar Bancorp, announced in April, was originally expected to be completed by the end of the year. The New York bank’s CEO expressed optimism that it will still get regulatory approval.