Category: Current Mortgage Rates

With interest rates expected to rise and most homeowners who could benefit from refinancing having done so, mortgage bankers are not expecting the sometimes record profits of the last year or so to continue. Fannie Mae’s third quarter Mortgage Lender Sentiment Survey (MLSS) found just short of a majority of respondents expecting their profit margins to decline over the next three months, although that has also been the primary sentiment for the past three quarters. The current survey found 46 percent of lenders expecting a decrease in profits, down from 69 percent in the prior survey. Thirty-eight percent believe their profits will be unchanged and 15 percent expect them to be higher. Those expecting slimmer margins cited increased competition and changing market conditions for their pessimism, while GSE pricing and policies and strong consumer demand were the top reasons given among lenders with a more positive profitability outlook. 

The other shoe didn’t drop last month, but maybe the laces did start to unravel. ATTOM reports that, within a month after the government’s pandemic-related moratorium lifted, foreclosure filings nationwide rose 27 percent and were 60 percent higher than in August 2020 when the moratorium was in full force. There were a total of 15,838 properties that received a foreclosure filing during the month, either a notice of default, scheduled auction, or bank repossession. “As expected, foreclosure activity increased as the government’s foreclosure moratorium expired, but this doesn’t mean we should expect to see a flood of distressed properties coming to market,” said Rick Sharga, Executive Vice President at RealtyTrac, an ATTOM company. “We’ll continue to see foreclosure activity increase over the next three months as loans that were in default prior to the moratorium re-enter the foreclosure pipeline, and states begin to catch up on months of foreclosure filings that simply haven’t been processed during the pandemic. But it’s likely that foreclosures will remain below normal levels at least through the end of the year.”

There was a huge reduction in the number of borrowers in COVID-19 related forbearance plans over the last week as servicers plowed through the remaining plans with August expirations and began processing those with September reviews. Black Knight says a net of 92,000 homeowners exited the program over the week ended September 7, a 5.4 percent decine. The forborne population is now 1.618 million loans, 3.1 percent of the 53 million universe of mortgages. The decline was seen across all investor classes with bank portfolio loans and those serviced for private lable security (PLS) investors decreasing by 40,000 or 7.7 percent. Both the combined Fannie Mae and Freddie Mac category (GSE loans) and the FHA/VA portfolios saw 26,000 borrowers exit, resulting in decreases of 3.8 and 5.1 percent, respectively.