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M REPORT | 59 O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Ninety Percent of Liens Have an Interest Rate Below 5% New data from Black Knight, Inc. has found that most mortgages have a rate below 5%, which reflects current drops in refinance activity, as well as cash-out and rate/ term locks. A nnouncing its latest monthly Originations Market Monitor data release covering Septem- ber 2022, Black Knight, Inc, found that due to rates finishing the month at 6.72%—the highest level in 15 years—rate lock volumes are down 10% from August and 60% year-over-year. Additionally, refinance activity has continued its recent descent, accounting for 16% of the month's lock volume, with three-quarters of that number being cash-out refinances. Cash-out locks fell as well, dropping 26.2% from August and 78% from a year prior. However, rate/term locks, which went over a ledge earlier this year appeared to hit a floor now registering 93.3% below num- bers from September of last year. "Interest rate and affordability challenges have fundamentally changed the mortgage origination market for the remainder of 2022— and the foreseeable future," said Scott Happ, President of Optimal Blue, a division of Black Knight. "Interest rates are now at their highest level in 15 years, while affordability is at 37-year lows. Given these realities, it's not par- ticularly surprising that rate locks are falling sharply. Keep in mind, however, that all this is coincid- ing with the already traditionally slower purchasing months." According to their findings, overall rate lock dollar volume is down 9.9% over August, which means it is at its lowest level since December 2019. This aligns with Black Knight data that shows roughly 90% of all active first-lien mortgages have current rates below 5%, putting the population of rate/ term refinance candidates at an all-time low," Black Knight said. "As a result, the refi share of the market hit a new low of 16% in September." "Interest rates jumped al- most a full percentage point in September, with affordability headwinds already high," Happ continued. "Home prices are pull- ing back in a growing number of markets, but across the country, affordability remains a challenge. This is likely one reason why non-conforming loans gained mar- ket share and we saw an increase of the average loan amount." "The decline in purchase lock volumes bears this out as well. Purchase lock counts—which ex- clude the impact of soaring home values on dollar volume—show we're down more than 10% from 2019 levels, marking the third con- secutive month that the number of purchase locks has fallen below pre-pandemic norms." ALTA Reports Slip in Title Premium Volume During Q2 The American Land Title Association's latest Market Share Analysis revealed that the title insurance industry generated an estimated $6.21 billion in title insurance premiums in Q2 of 2022, compared to $6.54 billion during the same time last year. T he title insurance industry generated an overall $6.21 billion in title insurance premiums during the second quarter of 2022 compared to $6.54 billion during the same period a year ago, ac- cording to the American Land Title Association's (ALTA's) latest Market Share Analysis. The second quarter showed mixed results as total operating income was down 4.2% while operating expenses were down 3.5%, and loss adjustment expenses were up nearly 5%. This resulted in net operating income of $562.5 million, compared to $593.8 mil- lion for Q2 of 2021. "This quarter's report reinforces the fact that real estate remains local," said ALTA CEO Diane Tomb. "Housing markets in several states continued to remain strong, while other areas have started to pull back as affordabil- ity constraints increase and the Federal Reserve continues to raise interest rates to combat inflation." For the first six months of the year, title premium volume is nearly flat compared to the first six months of 2021, down 0.5% from $12.22 billion to $12.16 billion. The industry paid a whopping $277.2 million in claims through the first six months of 2022. This is up from $221.1 million during the same period a year ago. Top 10 Individual Underwriters by Market Share: • First American Title Insurance Co., 21.4% • Old Republic National Title Insurance Co., 14.9% • Chicago Title Insurance Co., 14.3% • Fidelity National Title Insurance Co., 14.3% • Stewart Title Guaranty Co., 8.8% • Westcor Land Title Insurance Co., 4.2% • Title Resources Guaranty Co., 2.7% • WFG National Title Insurance Co., 2.5% • Doma Title Insurance Co., 1.8% • First National Title Insurance Co., 0.9% Top 5 States: • Texas: $969,681,005, +12.6% • Florida: $770,141,053, +7.4% • California: $582,062,862, -23.0% • New York: $385,326,198 +17.4% • Pennsylvania: $237,714,936, -19.2% "Despite the changing conditions, title professionals understand the cy- clical nature of the housing market and are committed to delivering safe and efficient real estate closings, pro- tecting property rights, and helping all consumers achieve homeowner- ship," Tomb concluded.