Freddie Mac Earnings Tumble

Freddie Mac on Thursday reported significantly lower earnings for the first quarter of the year as the impact of the coronavirus pandemic began to seep into the mortgage markets late last month. The company’s first quarter net income of $200 million was down from $2.6 billion for the fourth quarter of 2019. Comprehensive income dropped from $2.4 billion in Q4 2019 to $0.6 billion in Q1 2020. Freddie Mac attributed the decrease to: Higher credit-related expense of $1.1 billion primarily driven by higher expected credit losses on loans as a result of the pandemic.Losses on single-family loans held in inventory due to effects from the pandemic, combined with lower gains on single-family reperforming and nonperforming loan sales due to a…

Mr. Cooper Shutters Wholesale Business

Mr. Cooper is leaving the wholesale mortgage business. The Dallas-based lending giant said Wednesday it “made the decision to cease its wholesale lending operations, a segment of the business we entered as part of the Pacific Union Financial, LLC acquisition.” The company said the challenges presented by the pandemic were “not the driving force” in the decision and that the wholesale business accounted for less than 5 percent of its total originations volume. The change will lead to some job cuts, the company said. “As the market has evolved, we’ve increased our focus on our current customers and continue to prioritize investments in their experience to create customers for life,” the company said in a statement. “Additionally, we will continue…

Zillow Extends Work-From-Home Timeline

Zillow told employees they will be allowed to work from home through the end of the year, extending the flexible working arrangement brought on by the coronavirus pandemic. “Today we let our team know they have flexibility to work from home (or anywhere) through the end of 2020,” Zillow CEO and co-founder Rich Barton tweeted. “My personal opinions about WFH have been turned upside down over the past 2 months. I expect this will have a lasting influence on the future of work … and home. Stay safe.” Zillow, launched in 2006 and based in Seattle, employees more than 5,000 people. The web-based company has a database of more than 110 million properties. “Software and the people who create, deploy,…

CEO Outlines Nightmare Scenario For Borrowers, Lenders

MBS Highway President and CEO Barry Habib presented a bleak scenario resulting from the Federal Housing Finance Agency’s announcement Tuesday that mortgage lenders will have to cover four months of missed payments from borrowers under forbearance during the coronavirus pandemic. In a Facebook Live with the Association of Independent Mortgage Experts, Habib warned that lenders may be incentivized to hold on to new loans and potentially ruin borrowers’ credit, unless more federal protection is enacted. He presented a scenario in which a servicer issues a loan and makes 50 basis points on the deal. “If a loan went bad on a first-payment default because they needed forbearance or they’re gaming the system … so on a $300,000 loan, you risk losing $21,000 to…

IMB Profits Grew 300% In 2019

By Jim Perskie The lending business was significantly more profitable for independent mortgage banks (IMBs) in 2019. IMBs and mortgage subsidiaries of chartered banks made an average profit of $1,470 on each loan they originated last year – up from $367 in 2018, according to a report released Friday by Mortgage Bankers Association. The report also found: Average production volume was $2.7 billion (10,411 loans) per company in 2019, up from $2 billion (8,171 loans) per company in 2018.On a repeater company basis, average production volume was $2.94 billion (11,227 loans) in 2019, up from $2.14 billion (8,805 loans) in 2018. For the mortgage industry as whole, MBA estimates production volume at $2.17 trillion in 2019, up from $1.68 trillion in 2018.The…

UWM Vows No Layoffs, But There Will Be Dancing, Yoga, Zumba

As customers complain about lack of flexibility with their mortgages and unresponsive customer service, United Wholesale Mortgage vowed Thursday that there would be no layoffs at the company amid the coronavirus pandemic. UWM made the announcement in an unusual press release: PONTIAC, Mich., April 9, 2020 /PRNewswire/ — Today Mat Ishbia, president and CEO of United Wholesale Mortgage (UWM), the #1 wholesale mortgage lender, spoke to the 5,800 team members in an emotional all company address reminding them they are family, he is here for them and their jobs are safe during these very uncertain times. “Our neighbors, family and friends are getting sick and losing their jobs at a staggering rate while facing incredible stress about their finances in the middle of this global…

Redfin Furloughs Agents, Cuts Salaries

Redfin announced that 41 percent of its agents are leaving the company, with some leaving the company for good and most furloughed through the summer. The company also it is cancelling bonuses and temporarily cutting headquarter salary by 10 to 15 percent. “We decided on this large-scale furlough because fewer people are buying and selling homes, but another factor was the federal government’s $600 weekly contribution to each person’s unemployment insurance,” CEO Glenn Kelman said. “Of the field folks leaving, we estimate about 75 percent live in states that will allow them to earn more from unemployment insurance than from Redfin.” Kelman said employees who build the technology and programs behind the brokerage are staying on, with “a small number…

Free Press Silent About UWM Leadership Coach’s Past

The Detroit Free Press wrote a glowing article last week about United Wholesale Mortgage CEO Mat Ishbia and his hiring of former Michigan State basketball teammates: Twenty years ago, Ishbia was a walk-on third-string point guard for the Spartans, the human victory cigar on a team that won the 2000 NCAA tournament. Now, he’s the CEO and president of United Shore, a company that has grown from 12 employees to 5,800 in just 17 years. Ishbia has hired five former MSU teammates to work with him, in part because they are his friends — he gets them in the door; it’s up to them to do something with it. But also because they speak the same language and share the same experiences. Those teammates are Adam…

Troubled WVa Bank First To Fail In Coronavirus Era

The Federal Deposit Insurance Corporation announced the first failure of a bank during the coronavirus pandemic, though the bank was struggling before economic challenges began. The West Virginia Division of Financial Institutions closed The First State Bank in Barboursville, West Virginia on Friday. MVB Bank of Fairmount acquired all of the bank’s deposit accounts. FDIC said The First State Bank had approximately $152.4 million in total assets and $139.5 million in total deposits as of Dec. 31. In addition to assuming all of the deposits, MVB Bank agreed to purchase approximately $147.2 million of The First State Bank’s assets. The FDIC will retain the remaining assets for now. Earlier this year, DepositAccounts.com had given the bank an “F” for its financial…

UWM Customers Struggle With Relief; Company Adds 2nd Income Verification

United Wholesale Mortgage announced that it is conducting a second verification of income and employment step late in the loan process in the face of rising unemployment amid the coronavirus pandemic. At the same time, existing customers are getting increasingly frustrated with the company and vocal on social media with the company’s lack of responsiveness as they seek to adjust their mortgages during economic hardship. “With everything going on right now, it’s just really imperative that we’re verifying that income and employment have not changed the day we’re sending them the money,” said Eric Mojica, UWM’s vice president of sales. Mojica said UWM does two verification of employment checks now, one earlier in the process and one just before closing to…