{"id":1591727,"date":"2022-08-06T06:17:12","date_gmt":"2022-08-06T10:17:12","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1591727"},"modified":"2022-08-06T06:17:17","modified_gmt":"2022-08-06T10:17:17","slug":"santander-ceo-warns-a-shakeout-of-mortgage-lenders-is-coming","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/santander-ceo-warns-a-shakeout-of-mortgage-lenders-is-coming\/","title":{"rendered":"Santander CEO Warns a &#8220;Shakeout&#8221; of Mortgage Lenders Is Coming"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsantander-ceo-warns-a-shakeout-of-mortgage-lenders-is-coming%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1591727&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<div class=\"TopBanner-container\" data-top-banner-placeholder=\"true\"><\/div>\n<\/div>\n<div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\">\n<div class=\"RenderKeyPoints-keyPoints\" id=\"RegularArticle-KeyPoints-4\" data-test=\"keyPoints-1\" data-analytics=\"RegularArticle-keyPoints-4-1\">\n<div class=\"RenderKeyPoints-wrapper\">\n<div class=\"RenderKeyPoints-list\">\n<div>\n<div class=\"group\">\n<ul>\n<li>Some firms will be forced to exit the mortgage industry as refinance activity dries up, according to Tim Wennes, CEO of the U.S. division of Santander.<\/li>\n<li>Santander left the mortgage business in February as part of a strategic pivot to focus on higher-return services like its auto lending franchise. The decision now seems prescient.<\/li>\n<li>JPMorgan Chase and Wells Fargo have cut mortgage staffing levels to adjust to the lower volumes.<\/li>\n<li>Smaller nonbank providers are reportedly scrambling to sell loan servicing rights or even merge or partner with rivals.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"ArticleBody-articleBody\" id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-106820496\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<div class=\"InlineImage-imageEmbedCaption\">A sign hangs from a branch of Banco Santander in London, U.K., on Wednesday, Feb. 3, 2010.<\/div>\n<div class=\"InlineImage-imageEmbedCredit\">Simon Dawson | Bloomberg via Getty Images<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Banks and other mortgage providers have been battered by plunging demand for loans this year, a consequence of the Federal Reserve&#8217;s <a href=\"https:\/\/www.cnbc.com\/2022\/07\/27\/fed-decision-july-2022-.html#:~:text=Federal%20Reserve-,Fed%20hikes%20interest%20rates%20by%200.75%20percentage%20point,consecutive%20time%20to%20fight%20inflation&#038;text=The%20Federal%20Reserve%20on%20Wednesday,range%20of%202.25%25%2D2.5%25.\">interest rate<\/a> hikes.<\/p>\n<p>Some firms will be forced to exit the industry entirely as refinance activity dries up, according to <a href=\"https:\/\/www.linkedin.com\/in\/tim-wennes\/\" target=\"_blank\" rel=\"noopener\">Tim Wennes<\/a>, CEO of the U.S. division of <a href=\"https:\/\/www.cnbc.com\/quotes\/SAN\">Santander<\/a>.<\/p>\n<p>He would know: Santander \u2014 a relatively small player in the mortgage market \u2014 announced its decision to <a href=\"https:\/\/www.bankingdive.com\/news\/santander-to-wind-down-us-mortgage-lending\/618344\/\" target=\"_blank\" rel=\"noopener\">drop<\/a> the product in February.<\/p>\n<p>&#8220;We were a first mover here and others are now doing the same math and seeing what&#8217;s happening with mortgage volumes,&#8221; Wennes said in a recent interview. &#8220;For many, especially the smaller institutions, the vast majority of mortgage volume is refinance activity, which is drying up and will likely drive a shakeout.&#8221;<\/p>\n<p>The mortgage business boomed during the first two years of the pandemic, driven by rock-bottom financing costs and a preference for suburban houses with home offices. The industry posted a record <a href=\"https:\/\/www.nationalmortgagenews.com\/news\/originations-top-record-4-4-trillion-in-2021\" target=\"_blank\" rel=\"noopener\">$4.4 trillion<\/a> in loan volumes last year, including $2.7 trillion in refinance activity, according to mortgage data and analytics provider Black Knight.<\/p>\n<p>But surging interest rates and home prices that have yet to decline have put housing out of reach for many Americans and shut the refinance pipeline for lenders. Rate-based refinances <a href=\"https:\/\/www.blackknightinc.com\/black-knights-may-2022-originations-market-monitor\/?\" target=\"_blank\" rel=\"noopener\">sank 90%<\/a> through April from last year, according to Black Knight.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">&#8216;As good as it gets&#8217;<\/h2>\n<div class=\"group\">\n<p>The move by Santander, part of a strategic pivot to focus on higher-return businesses like its auto lending franchise, now seems like a prescient one. Santander, which has about $154 billion in assets and 15,000 U.S. employees, is part of a Madrid-based global bank with operations across Europe and Latin America.<\/p>\n<\/div>\n<div class=\"group\">\n<p>More recently, the largest banks in home loans, <a href=\"https:\/\/www.cnbc.com\/quotes\/JPM\" target=\"_blank\" rel=\"noopener\">JPMorgan Chase<\/a> and <a href=\"https:\/\/www.cnbc.com\/quotes\/WFC\" target=\"_blank\" rel=\"noopener\">Wells Fargo<\/a>, have cut mortgage staffing levels to adjust to the lower volumes. And smaller nonbank providers are reportedly <a href=\"https:\/\/www.wsj.com\/articles\/rising-rates-are-battering-mortgage-lenders-11653471002\" target=\"_blank\" rel=\"noopener\">scrambling<\/a> to sell loan servicing rights or even considering merging or partnering with rivals.<\/p>\n<p>&#8220;The sector was as good as it gets&#8221; last year, said Wennes, a three-decade banking veteran who served at firms including Union Bank, Wells Fargo and Countrywide.<\/p>\n<p>&#8220;We looked at the returns through the cycle, saw where we were headed with higher interest rates, and made the decision to exit,&#8221; he said.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\">Others to follow?<\/h2>\n<div class=\"group\">\n<p>While banks used to dominate the American mortgage business, they have played a diminished role since the 2008 financial crisis in which home loans played a central role. Instead, nonbank players like <a href=\"https:\/\/www.cnbc.com\/quotes\/RKT\" target=\"_blank\" rel=\"noopener\">Rocket Mortgage<\/a> have soaked up market share, less encumbered by regulations that fall more heavily on large banks.<\/p>\n<p>Out of the <a href=\"https:\/\/www.bankrate.com\/mortgages\/top-10-mortgage-lenders-of-2021\/\" target=\"_blank\" rel=\"noopener\">top ten mortgage providers<\/a> by loan volume, only three are traditional banks: Wells Fargo, JPMorgan and <a href=\"https:\/\/www.cnbc.com\/quotes\/BAC\" target=\"_blank\" rel=\"noopener\">Bank of America<\/a>.<\/p>\n<p>The rest are newer players with names like <a href=\"https:\/\/www.cnbc.com\/quotes\/UWMC\" target=\"_blank\" rel=\"noopener\">United Wholesale Mortgage<\/a> and Freedom Mortgage. Many of the firms took advantage of the pandemic boom to go public.Their shares are now deeply underwater, which could spark consolidation in the sector. \u00a0<\/p>\n<p>Complicating matters, banks have to plow money into technology platforms to streamline the document-intensive application process to keep up with customer expectations.<\/p>\n<p>And firms including JPMorgan have said that increasingly onerous capital rules <a href=\"https:\/\/www.cnbc.com\/2022\/07\/14\/jamie-dimon-rips-fed-stress-test-as-terrible-way-to-run-financial-system-.html\">will force it to purge mortgages<\/a> from its balance sheet, making the business less attractive.<\/p>\n<p>The dynamic could have some banks deciding to offer mortgages via partners, which is what Santander now does; it lists Rocket Mortgage on its <a href=\"https:\/\/www.santanderbank.com\/personal\/mortgages\" target=\"_blank\" rel=\"noopener\">website<\/a>.<\/p>\n<p>&#8220;Banks will ultimately need to ask themselves if they consider this a core product they are offering,&#8221; Wennes said.<\/p>\n<\/div>\n<\/div>\n<div class=\"WatchLiveRightRail-inline WatchLiveRightRail-container\" id=\"RegularArticle-WatchLiveRightRail-7\" data-test=\"watchLiveRightRail-4\" data-analytics=\"RegularArticle-watchLiveRightRail-7-4\">\n<div class=\"WatchLiveRightRail-contents\"><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButton\">WATCH LIVE<img decoding=\"async\" src=\"denied:data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMTgiIGhlaWdodD0iMTgiIHZpZXdCb3g9IjAgMCAxOCAxOCIgZmlsbD0ibm9uZSIgeG1sbnM9Imh0dHA6Ly93d3cudzMub3JnLzIwMDAvc3ZnIj4KPHBhdGggZD0iTTYuOTU5OTYgNi4xMjAwM0wxMS43NiA5LjAwMDAzTDYuOTU5OTYgMTEuODhWNi4xMjAwM1oiIGZpbGw9IndoaXRlIi8+CjxwYXRoIGZpbGwtcnVsZT0iZXZlbm9kZCIgY2xpcC1ydWxlPSJldmVub2RkIiBkPSJNOC41NiAwLjQ0MDAwMkMzLjgzMjQ0IDAuNDQwMDAyIDAgNC4yNzI0NSAwIDlDMCAxMy43Mjc2IDMuODMyNDQgMTcuNTYgOC41NiAxNy41NkMxMy4yODc2IDE3LjU2IDE3LjEyIDEzLjcyNzYgMTcuMTIgOUMxNy4xMiA0LjI3MjQ1IDEzLjI4NzYgMC40NDAwMDIgOC41NiAwLjQ0MDAwMlpNMS4xMiA5QzEuMTIgNC44OTEgNC40NTEgMS41NiA4LjU2IDEuNTZDMTIuNjY5IDEuNTYgMTYgNC44OTEgMTYgOUMxNiAxMy4xMDkgMTIuNjY5IDE2LjQ0IDguNTYgMTYuNDRDNC40NTEgMTYuNDQgMS4xMiAxMy4xMDkgMS4xMiA5WiIgZmlsbD0id2hpdGUiLz4KPC9zdmc+Cg==\" class=\"WatchLiveRightRail-logo\" alt=\"logo\" \/><\/a><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButtonMobile\">WATCH IN THE APP<\/a><\/div>\n<\/div>\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-12 PageBuilder-col PageBuilder-article\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Some firms will be forced to exit the mortgage industry as refinance activity dries up, according to Tim Wennes, CEO<\/p>\n","protected":false},"author":1,"featured_media":1612054,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1591727","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1591727","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1591727"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1591727\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1612054"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1591727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1591727"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1591727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}