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Mortgage Upheaval Prompts Some Buyers To Pounce

This Month in Retail Banking

Nowhere is the mortgage shakeout more apparent than in the wave of mergers and acquisitions that have washed across the industry ever since interest rates started to rise. And that wave is occurring even though credit trends aren’t deteriorating significantly. 

Courageous buyers view the upheaval as an opportunity to enter new markets and then cut costs from overlapping operations. As these are early days, it is unclear whether these classic strategies to grab market share will ultimately succeed. If economic conditions deteriorate and credit trends weaken, some lenders may experience buyer’s remorse. 

What’s clear is that the industry’s trends aren’t showing any signs of recovery, with volume down 53.3% year over year.  Market trends are showing lower weighted average FICOs (dropping from 760 to 745), higher LTVs (increasing from 72% to 81%). Both metrics are associated with a move away from the refinance boom and toward a stronger purchase market. 

This means that buyers can’t rely on new geographies to guide them to better times. Instead, lenders will need to keep charging ahead with efforts to optimize margins by using granular pricing strategies. They also must have a clear retention strategy for their mortgage servicing portfolio because recapture will represent a significant opportunity when rates start to come back down.   

  • Author
    • Brandonn Dukes

      Brandonn is the Executive Vice President of Real Estate and Consumer Lending.  In this role, Brandonn is responsible for the development of solutions to include new business tools and services enhancing our client's ability to achieve margin, share, risk and operational objectives. Prior to Curinos, he was with Informa FBX (previously knowns as ICON Advisory Group). Brandonn has 20+ years of experience and has provided strategic direction for financial services companies working at the Director and SVP level for Capital One, Nationstar and Bank of America.  Brandonn graduated from the SMU Cox School of Business and is a Chartered Financial Analyst. He enjoys spending his free time with his wife and three children, training and racing in Ironman Competitions and listening to music.

      View all posts Senior Vice President, Partnerships
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