Originations

Purchases of new single-family homes increased 1% to a 708,000 annualized pace following an upwardly revised 701,000 in June, government data showed Tuesday.

The company is divesting itself of another piece of Xome after previously peddling Title365 to Blend Labs.

However, the pace of growth at the six active underwriters should moderate over the next two years, Keefe, Bruyette & Woods said.

Refinancing, high home prices, the concentration of pandemic-related hardships in the FHA market, and the lingering impact of last year’s market disruption all likely played a role in the intensified discrepancy.

Meanwhile, investors await word from the central bank regarding monetary policy, as limited housing supply continues to drive prices upward.

Lower rates and higher home prices will boost dollar volume although few home sales will cut into purchase volume growth.

But average loan sizes remain near record highs, with summer purchases of new constructions continuing to drive up prices.

The wholesale lender has a cost structure aimed at beating the competition in a rising rate environment, Chairman and CEO Mat Ishbia said on the second quarter earnings call.

The share of home sales that were competitive remained above year-ago levels in July, but only by a few percentage points.

Depressed margins and a $219 million hit to its servicing rights fair value translated to a lower bottom line at the wholesaler.

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Originations of loans to the self-employed and other outside-the-box borrowers had better margins than mainstream mortgages in the second quarter, but rebuilding after the niche market’s temporary disruption last year generated significant expenses.

But median prices still rose 17% year-over-year, the company found.

Second quarter open orders were 37% higher than one year prior, while closed orders grew by 43%.

While the company's mortgage originations saw a 46% annual drop in gain on sale margin, it anticipates that annual volumes will exceed 2020 levels.

The Department of Housing and Urban Development and Federal Housing Finance Agency, which supervises Fannie Mae and Freddie Mac, formed a pact to share information and coordinate investigations of potential fair-lending violations.

The companies are investing more in government-insured equity withdrawal products for borrowers ages 62 and up, which offer higher returns.

Shrinking gain-on-sale margins also ate into earnings, with growth expected to slow for the rest of 2021.

A jump in jumbo loan programs was countered by lenders dropping high loan-to-value conforming products.

The average was up from 2.77% last week and the highest since July 15, Freddie Mac said Thursday.