• Vaultedge Newsletter
  • Posts
  • Vaultedge Newsletter - Inflation will take time to slowdown, Hurricane Ian hits the CRE front, Gearing up for MBA Annual 22

Vaultedge Newsletter - Inflation will take time to slowdown, Hurricane Ian hits the CRE front, Gearing up for MBA Annual 22

October 10, 2022

I happened to speak with a few peers from the mortgage industry and one of them jokingly said, the way interest rates are surging every week, we can almost create a drinking game out of that. Anyone guessing higher that 0.75% base rate-chug it down! Jokes apart, recently a Federal Reserve official commented that lowering the inflation down from 40-year high will take time and will require a slowdown in economic growth and reduced demand for workers by employers. Those efforts are showing tentative signs of progress, said Fed governor Philip Jefferson, in his first public remarks since taking office in May. Those efforts are showing tentative signs of progress, said the Fed Governor, in his first public remarks since taking office in May. The Fed has approved rate increases of 0.75 percentage point at its last three meetings, most recently in September, bringing its benchmark short-term interest rate to a range between 3% and 3.25%.

____________________________________________

Hurricane Ian, hitting Florida on September 28th, has gone down as one of the most destructive storms in U.S. history. High winds, storm surges and expansive flooding have already caused billions in residential and commercial real estate damages. With rising interest rates and labor and material shortages, recovery of the devastation will likely be both slow moving and expensive. Commercial insurance rates have already been on the rise due to inflation, increased building costs and supply chain issues. Catastrophic losses often deplete reserves of insurance carriers, making commercial insurance more reactionary than other insurance types. Different property types will feel the impact of replacement and development costs in varying manners. Florida properties of different categories will also see different increases in their insurance.

_____________________________________________

Cash-out refinance transactions are taking a larger share of new FHA single-family endorsements this year, according to an Inside FHA/VA Lending analysis. Some 47,195 endorsements for cash-out deals were recorded by FHA in the second quarter of 2022. That represented 21.6% of total FHA new business for the period and a whopping 81.9% of refinance activity in the program. Cash-out refi endorsements rose 7.2% from the first to the second quarter. Total single-family endorsements fell 9.2% from the first quarter, including a 70.4% nosedive in rate-term refinances.

______________________________________________

Blackstone has closed its acquisition of Bluerock Residential Growth REIT in an all-cash transaction valued at $3.6 billion. Blackstone first announced the deal last December, revealing that Bluerock had agreed to sell all outstanding shares of its common stock for $24.25As part of the agreement, Blackstone will acquire 30 multifamily properties comprising approximately 11,000 units and a loan book secured by 24 multifamily assets.

Jay Bray, Chairman and CEO of Mr. Cooper anticipates the rise of MSR gross sales due to the impression of the shift in charges and margin compression at lenders. “I believe you may see a whole lot of MSRs enter into the marketplace,” Bray mentioned “We’ll definitely take part in shopping for our justifiable share of these.” Mr. Cooper additionally plans to maintain placing cash into its operations, he added.

United Wholesale Mortgage has inked an amended and restated loan agreement that allows the nation’s largest table-funder to borrow up to $1.5 billion from Citibank, using the cash to finance the origination, acquisition or “holding” of Fannie Mae/Freddie Mac mortgage servicing rights. According to an 8-K filing on the arrangement, “availability” under the Citi MSR facility is calculated based on the market value of the collateral. The Michigan-based UWM noted that the line is uncommitted. No specifics were released regarding the interest rate on the loan.

____________________________________________

From January through June, the commercial/multifamily sector recorded an unprecedented $891 billion production volume in 2021. Solid fundamentals and values in recent years have fueled commercial and multifamily borrowing and lending. However, investors and lenders are expected to start pulling back as the current economic climate grows more unsteady. MBA predicted a 7% year-over-year drop in multifamily lending, down to $455 billion from last year’s record of $487 billion. However, the slowdown may be temporary. The trade group anticipates borrowing and lending to rebound in 2023 to $848 billion in total commercial real estate lending and $451 billion in multifamily lending.

____________________________________________

This year has been extra tough for most mortgage companies due to the drastic drop in refinance volume. Gabriel Gillen, president of Family First Funding, expects it will continue to be so in the coming year as the downturn forces companies to trim their workforce.

“In a perfect world, market changes would never happen, and there would never be a need to have layoffs, with the exception of poor performance,” Gillen said in MPA’s Top Mortgage Employers 2022 special report. “Businesses have a responsibility to their staff and key stakeholders to work efficiently, produce a profit, and provide services at a level that will create repeat and future business referrals. 

___________________________________________

Well, the past few weeks just sprinted like Usain Bolt, I couldn’t catch my breath. Vaultedge has been preparing for the MBA Annual which is right around the corner. The industry event of the year is headed to Nashville. Join Vaultedge at Music City Center, where you will network, learn and do business with thousands of your peers, industry power players, innovators and experts. Just come and visit us at booth no. 630 and see what we have been up to, or just get a beverage to hang out for a while. And if you are really interested in changing the way your mortgage loan processing works, then let’s make it formal! Book a meeting with me.

Happy reading!

Governor Philip Jefferson says he remains concerned that consumers will expect higher prices to persist.

Experts weigh in on the storm's effects on Florida insurance premiums, national premiums and ways to mitigate the repercussions.

Ginnie Mae early this week expanded loan buyout authority to issuers to allow them to offer financial relief to borrowers affected by the recent hurricanes Ian and Fiona. 

Cash-out refinance transactions are taking a larger share of new FHA single-family endorsements this year, according to an Inside FHA/VA Lending analysis. Some 47,195 endorsements for cash-out deals were recorded by FHA in the second quarter of 2022.

Blackstone has closed its acquisition of Bluerock Residential Growth REIT in an all-cash transaction valued at $3.6 billion.

The shift from a refi boom to a lean purchase market will result in casualties. And Guild Mortgage's CEO Mary Ann McGarry said they're ready to strike a deal if conditions are right.

"We feel like we've done what we need to navigate the environment," Homepoint's president and CEO Willie Newman said in an interview Friday.

A wave of mortgage servicing rights sales is likely to emerge due to the impact of the shift in rates and margin compression at lenders, according to Jay Bray, chairman and CEO of Mr. Cooper.

United Wholesale Mortgage has inked an amended and restated loan agreement that allows the nation’s largest table-funder to borrow up to $1.5 billion from Citibank, using the cash to finance the origination, acquisition or “holding” of Fannie Mae/Freddie Mac mortgage servicing rights.

After a strong half-year, commercial and multifamily mortgage transactions are forecasted to fall 14% year over year to $766 billion in 2022, according to the Mortgage Bankers Association.

“We continue to see significant changes, volatility, and uncertainty in the space, equity, and debt markets that drive commercial real estate values and transaction volumes,” said Jamie Woodwell, VP of commercial real estate research at MBA.

This white paper will examine the growing importance of modernization in the mortgage lending industry. Download for insight and actionable advice for lenders aiming to maintain a competitive edge.

Now that tapping home equity is back in fashion, I figured it’d be helpful to see who the top HELOC lenders are. Last year, banks and mortgage lenders

This reminds me a lot of prior concept-heavy phases of AR and VR including the launch of Google Glass (we all remember this video), Magic Leap, Spectacles, and more.