Many experts believe that a surge in bank mortgage lending could be both good for brokers and for the wholesale channel. It could be good for consumers as well, as more competition and liquidity could mean better rates. Hagen isn’t sure yet how much it would help, but it could help some.
“We’ve heard that banks are getting back into the mortgage market slightly, not in a meaningful way, but on the margins,” Hagen said. “That could help tighten the spreads a little bit. Banks are typically a little bit more competitive with their rates versus the nonbanks that we cover, but not meaningfully. It’s not like they’re going to be offering meaningfully better rates.”
The encouraging thing that Hagen is seeing so far is that credit conditions in the market continue to be strong, even with the market headwinds that have derailed rate drops early in the year.
“We still feel like the credit conditions are pretty healthy in the market, for the most part,” he said. “A tightening of credit, alongside some of the volatility that we just talked about, isn’t really what we’re seeing. Sometimes you see volatility coming up and rates backing up, and lenders tightening their standards. We’re not really seeing that yet.”
Fannie and Freddie conservatorship
One other idea Hagen said could improve mortgage rates is the release of Fannie Mae and Freddie Mac from government conservatorship.
