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- Mortgage lenders returned to losses in Q4
Mortgage lenders returned to losses in Q4
Plus: Chopra: CFPB cuts put mortgage market at risk
🍀 Happy Monday and St. Patrick’s Day. Today’s newsletter is 717 words, a 2.5-minute read.
Disclaimer: Average mortgage rates as of Mar 14, 2025. © MND Daily Rate Index.
1. Mortgage lenders returned to losses in Q4
Mortgage lenders lost $40 per loan in Q4 2024, reversing two quarters of profitability, according to the MBA. Higher production costs, particularly application-related expenses, drove the decline, despite strong origination volume.
Independent mortgage bankers saw profits drop from 18 basis points in Q3 to a 4-basis-point loss, though still an improvement over Q4 2022’s 73-basis-point loss. Total loan production expenses rose to $11,230 per loan, while revenues fell to $11,190.
Refinancing volume increased by $50 billion, but purchase activity dropped by $30 billion. The servicing business remained profitable, netting $142 per loan, up from a Q3 loss of $25.
2. Chopra: CFPB cuts put mortgage market at risk
Former CFPB Director Rohit Chopra told CNBC that efforts to limit the agency’s authority could destabilize mortgage markets and weaken consumer protections.
He noted that recent White House actions have halted investigations and lawsuits against major lenders like Capital One and Rocket Mortgage, creating a regulatory gap.
Chopra also pointed to tech giants like Apple and Google, saying they pushed for deregulation as they expand into banking. With no federal agency able to fill the CFPB’s role, he warned that consumers could face higher borrowing costs, less competition, and greater financial risks.
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3. More Nuggets
🏘️ Home sellers and buyers accuse realtors of blocking lower fees. (NYT)
🌆 Why so many New York City sidewalks are covered in scaffolding. (theHustle)
⚖️ Judge denies Crye-Leike claim that it’s covered by NAR settlement. (HousingWire)
❄️ A secret mortgage blacklist is leaving homeowners stuck with unsellable condos. (WSJ)
4. Consumer sentiment plunges to 2-year low
Consumer sentiment fell to 57.9 in mid-March, a 10.5% drop from February and the lowest reading since November 2022, according to the University of Michigan. The decline was sharper than expected.
Concerns over inflation intensified as President Trump imposed new tariffs on steel, aluminum, and threatened EU liquor duties. The one-year inflation outlook jumped to 4.9%, its highest since 2022, while the five-year outlook hit 3.9%, a level not seen since 1993.
“Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences. Consumers from all three political affiliations are in agreement that the outlook has weakened since February.”
5. Home equity growth slows as negative equity climbs
Home equity rose by $281.9 billion in Q4 2024, a 1.7% year-over-year increase, according to CoreLogic. The average homeowner gained $4,100 in equity between Q4 2023 and Q4 2024, though growth slowed as home prices leveled off.
Regional disparities widened, with the Northeast seeing the largest gains—New Jersey ($39,400), Connecticut ($36,300), and Massachusetts ($34,400)—while Hawaii, Florida, and D.C. saw the largest declines. Negative equity also increased, with 1.1 million homes (2% of mortgaged properties) underwater, up 9.3% from Q3.
“Housing equity growth slowed in 2024 versus 2020-2023 due to moderating price appreciation, but homeowners maintain substantial equity gains from prior years, preserving their strong financial position”
☀️ You’re all caught up. See you on Wednesday!
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