Mortgage Professionals Should be Optimistic About the Future

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Th e M Rep o RT | 37 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ORIGINATION the latest ORIGINATION Falling mortgage rates not enough to lure new Homebuyers Despite a decrease in borrowing costs, brokerage's study reveals a leveling off in buyer traffic and purchase commitments. d espite the fact that 30-year fixed mortgage rates dipped below 4 percent in October, the number of buyers looking to tour homes cooled off. At the same time, the rate drop triggered a hefty increase in signings during the month of November, according to an analysis of homebuying activity conducted by Redfin. Redfin's monthly report showed the number of clients requesting home tours with the company was down 1.6 percent from September. However, the first sub-4 percent rates since June 2013 sparked a late-month spike of 11 percent in signed offers. This uptick belies a nation of patient buyers who seized the oppor- tunity to make a great deal, the company says. "Clients who had been casu- ally house hunting amped up their searches and got under contract to lock in the low rates," said Tuniscia Okeke, a Redfin agent in Baltimore. "These are opportunistic buyers who don't necessarily need to move, but have been waiting for the right deal to come along." Even with the late jump, signed offers were essentially flat in October, Redfin reported. One year prior, signed offers increased 7.4 percent between September and October. While the jury's still out on November's results, Redfin is nev- ertheless seeing a flip of October's trend—a surge in tour requests accompanied by a drop in of- fers. For the first week or so of November, Redfin agents reported a 4.4-percent upswing in tour requests and a 2.5-percent drop in signed offers. The latter is not necessarily cause for con- cern, since such a swell of buyers made offers im- mediately follow- ing the rate drop the previous month. "Time will tell," said Nela Richardson, Redfin's chief economist, "whether the early strength in tours holds through the month, and ultimately results in higher offers as well." One month earlier, Richardson was more optimistic in her view of what the end of the year would bring. September's offers and tour requests were both up over August, which, she suggest- ed, could "hold steady through November before the seasonal slowdown in home searches over the holiday." If November's numbers do hold up, Richardson's forecast would usher in good news as the new year sets in. lenders Bring Up Origination volumes in Q3 Quarter's $320 billion in new home loans outpaces Q2 production but falls well short of year-ago numbers. U .S. home lenders managed to boost origination volumes in the third quarter when compared to the prior period, but lending activity in 2014 remains weak compared to the previous year's numbers. Mortgage lenders originated an estimated $320 billion in loans throughout Q 3, accord- ing to information collected by Mortgage Daily. While up nearly 8 percent from the second quarter's total of about $300 billion, third- quarter volume fell short of year-ago levels by 31 percent. Year-to-date through September, total production came to an estimated $890 billion. Once again, Wells Fargo stayed in the top spot as the country's largest home lender, originating $48 billion. The next largest originator—Chase—post- ed a little less than half of that: $22 billion. Rounding out the top five were Quicken Loans (which moved up in rank with $16 billion in new loans), Bank of America (sliding to fourth on $15 billion), and U.S. Bank Home Mortgage ($13 bil- lion). Figures for all of the top firms were up from the second quarter. Year-over-year, Freedom Mortgage posted the great- est increase, with business jumping 148 percent. At the other end of the scale, Fifth Third reported a 56-percent dropoff in lending compared to the year before. On the servicing side, Wells Fargo was also the biggest name, boasting a portfolio of $1.8 trillion in outstanding mortgages. Chase came in second with a port- folio worth $933 billion, with BofA following at $722 billion. The only change in posi- tion among the top 10 ser- vicers, according to Mortgage Daily, was a switch between Nationstar and Ocwen for the No. 4 and 5 spots. Nationstar ranked fourth in Q 3 with a $378 billion port- folio, while Ocwen was fifth with $361 billion. While both non-bank servicers have come under scrutiny from state and federal regulators in the last year, Ocwen has experienced a greater share of headwinds. Last month, the Atlanta- based servicer entered into a settlement with New York's top financial regulator re- lated to concerns over what investigators for the New York State Department of Financial Services (NYDFS) called "serious conflict of interest issues," as well as servicing misconduct allega- tions made by agency over the last year. The settlement included $100 million to be paid to NYDFS for various state housing programs, $50 mil- lion for Ocwen borrowers who have faced foreclosure proceedings in the last sever- al years, and the resignation of Bill Erbey, founder and executive chairman, among other provisions. "Clients who had been casually house hunting amped up their searches and got under contract to lock in the low rates." —Tuniscia Okeke, Redfin

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