The Institutional Risk Analyst

Truth is, it’s hard to see the leadership of either RITM or UWMC combining with another entity, but the cost pressures in the industry today are driving radical change. 

We expect to see continued consolidation in the world of residential mortgage finance in coming months. The sad fact is that many less competitive businesses in mortgage finance have been waiting for the FOMC to ride to the rescue with lower interest rates. If rate cuts do not materialize in 2025, however, then many of these businesses may not survive.

While GHLD provides a lot of good information about their business, the investor disclosure provided by UWMC is a bad joke, especially when you remember that UWMC is the largest nonbank lender in the US. The Q1 2025 press release is just 9 pages in length and lacks some of the most basic financial information available from UWMC’s peers.

COOP and RKT, plus RDFN, creates an integrated business of realty, lending, servicing and asset management that is impressive

Yes, that's right, we are going to downgrade $8 trillion in GSE MBS and hundreds of billions in corporate debt.

How will the sudden shift in Fed policy impact financials? Are we headed for a recession?

Why should a private Fannie Mae be a 20% risk weight under Basel III, but PFSI or Mr. Cooper (COOP) are 100%?

Axos continues to rebound after the bear raid by Hindenburg Research. AX ranked 18th in the WGA Bank Top Index in Q3 2024 vs 98th for SOFI

The market tantrum which began on Friday was largely over by the market close on the following Tuesday.

Of note, PFSI has been growing share in wholesale, a direct challenge to UWMC

We think Whitney’s comments about a surge in new lending from Freddie Mac buying home equity loans are poorly considered

The survivors in mortgage finance optimize operations around purchasing loans from brokers/ correspondents, and direct to consumer (DTC)

BK and Vanguard are above the 4.9% legal limit on ownership of voting shares of a bank. This fact gives the FDIC et al the power...

Industry leaders believe that the FHFA wants the GSEs to offer issuers "repurchase insurance" to the tune of 25bps per loan.

If we are marking balance sheet assets to actual market in the age of deflation, what of the heavily modeled world of servicing assets?

The “winners” in the mortgage sector will be those larger players with equally large servicing books that can access bank funding

GS is a securities dealer first and foremost and has no comparative advantage as a bank.

In this issue of The Institutional Risk Analyst, we speak to Mike Patterson, COO of Freedom Mortgage.

Many in the Buy Side chorus are looking forward to lower interest rates, but we are concerned that next year could really be about solvency

Is 2023 the year of the Return of the Distressed Loan Trade?