Interest Rate Effect on Mortgage
The Q2 earnings reports provided a glimpse of the latest impact of the interest rate hike.
Q2 ‘22 mortgage originations from the top 4 US banks are down 30%~ from the 3-year average. The higher mortgage rate clearly dampens both home purchases and refinancing.
The market turn has led to layoffs in the banks' mortgage departments, online mortgage lenders, as well as real estate brokerages.
Credit quality disclosure:
Bank of America reported an average FICO of 771 for its mortgage portfolio. The average booked loan-to-value (LTV) ratio in Q2 is 70%.
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