Morning Report: Small Business Optimism Falls

Vital Statistics:

S&P futures4,137-1.5
Oil (WTI)79.78-0.85
10 year government bond yield 3.40%
30 year fixed rate mortgage 6.41%

Stocks are flattish this morning on no real news. Bonds and MBS are down small.

Small Business Optimism fell again in March, according to the NFIB Small Business Optimism Survey. Small business owners are hunkering down for a recession, and are generally dour about future sales and earnings. The Silicon Valley Bank situation doesn’t appear to be affecting access to credit, as the vast majority are finding their credit needs met. Workers are still hard to find in the wholesale, transportation and construction businesses.

Prices are still elevated, but it looks like things continue to work back towards historical averages.

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Our clients agree. Brian Yingling, Chief Financial Officer of Nations Direct Mortgage, says, “Western Alliance Bank has been a valuable and consistent banking partner. They are steadfast in their support and innovative with their wide array of banking solutions across their warehouse, correspondent and banking channels. Their talented team is incredibly responsive, and we know they are on our side irrespective of the market conditions.”

To learn more about how Western Alliance treasury management solutions can add efficiencies to your cash flow cycle, or to discuss traditional warehouse lending, MSR financing, note financing and other mortgage finance products, please contact Jennifer Schachterle (720) 261-5774, Mark Short (469) 702-6212, Chris Martin (480) 341-5483 or Nick Richards (646) 708-1211. Western Alliance Bank, Member FDIC.

Rate lock volume increased 43% in March, according to Black Knight. Purchase lock volumes rose 44%, which is well above the normal Spring Selling Season bump of 30%. Refi locks rose as well. FHA lock volume rose to 20% as a less competitive real estate market pushed more sellers to accept bidders with FHA loans.

“This continues to be an incredibly rate-sensitive housing market, and March’s rate lock activity perfectly illustrates this dynamic,” said Andy Walden, vice president of enterprise research at Black Knight. “Early in the month, when rates started their climb back toward 7% – reaching 6.8% in the process – we saw pronounced downward pressure on originations. In the wake of uncertainty in the banking sector and investors’ flight to the safe haven of U.S. Treasuries, rates came down roughly a quarter of a point. The result? Another quick surge in originations, particularly in the purchase market.”

Home Point has agreed to sell its wholesale ops to The Loan Store, an Arizona-based wholesaler. “Due to the tremendous effort of our associates and the support of our broker partners, we have built Homepoint from a startup to the third-largest wholesale lender,” said Willie Newman, President and CEO of Homepoint. “After careful consideration, and in light of current market conditions, we have decided to sell our wholesale originations business to The Loan Store. We believe this is the best decision for our company to continue to deliver value to Home Point shareholders.”

As a result of this transaction, Home Point is basically a MSR portfolio with an equity stake in the Loan Store. It no longer originates mortgages.

9 Responses

  1. I think this is the first article I’ve seen the Washington Post report on that’s legitimately about “gun safety”.


  2. It’s impossible to overstate my contempt for the Washington Post Editorial Board here:

    Apparently they view “Democracy Dies in Darkness” as their mission statement.


  3. Totally.

    Plus it would cure baldness and impotence.



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