Mortgage Winter II
In a recent post, we spoke about how the current market environment of high interest and home prices is leading to downward pressure on both supply and demand in the housing market, a situation we call "Mortgage Winter". While this environment is unlikely to result in a severe recession such as the Global Financial Crisis, there is the potential for broad fallout associated with distress in the lender and broker markets.
First, we look at the originations.
The count of loans that were delivered to the three agencies dropped by 68% from Q4 2021 to Q4 2022:
On January 13, Housing Wire posted an article titled “Freedom Mortgage dominates the MSR market” in which they reported that, among other top servicers, Freedom is leading the MSR marketing. They cited Recursion data on the ranking of the Ginnie Mae top servicers/buyers as well as their loan delinquency rates to provide perspective on the MSR market.
On January 6, Housing Wire ran an article titled “2022 opens with a big MSR bulk-sale
offering” in which they report that large volumes of sales activity at the start of 2022 point to a robust deal year ahead. They cite Recursion data on the growth in total Agency MSR transactions in 2021 compared to the previous year to provide perspective on the strong momentum in deal flow.