AI, Cap Mkts Tools; Delinquencies Increasing; loanDepot Case Ethics Motion; Bill Dawley Interview

Will rates impact the latest MBA origination forecast of $2.2 trillion next year? Sure, although… The Federal Reserve has cut overnight rates, but longer-term rates (like 15- and 30-year mortgages) have done little or have gone up. Recently news came out that Freddie and Fannie are buying securities that they produce. If GM is buying its own cars, should its stock price go up, or does the price of its cars go up? Do GSE MBS purchases really move rates? The recent news that the GSEs have been purchasing mortgage-backed securities raised predictable questions about affordability and rate relief. Conceptually, it sounds supportive. In practice, I am skeptical about the impact, and my son Robbie observed that there is an important distinction between the Federal Reserve purchasing assets and the manufacturers of mortgage credit purchasing their own output. “Market driven mortgage rates respond to investor demand, spreads, and broader macro forces. They do not meaningfully move because someone decides they should. Rates have remained largely unchanged despite these actions. That alone suggests the market is signaling skepticism. Good intentions do not automatically translate into lower borrowing costs.” (Today’s podcast can be found here and this week’s are sponsored by Gallus Insight, which is transforming employee analytics into actionable insights. Gallus’ ROI tool for learning and development activity is the most powerful in the world, and also the easiest to use. Hear an interview with Amergy Bank’s Bill Dawley on how top originators are winning business in today’s environment and where affordability initiatives and fair lending intersect.)