Quicken Loans Just Had Its Biggest Month in History

Posted on April 15th, 2020
Quicken Loans Just Had Its Biggest Month in History

The nation’s top retail mortgage lender just knocked it out of the park, despite the ongoing coronavirus pandemic.

Quicken Loans CEO Jay Farner was on CNBC’s “Squawk Box” this morning to discuss the state of the industry, along with how his company is faring so far.

And it appears they’re doing just fine, based on the massive numbers he threw out.

March Was Quicken’s Best Month Ever

  • Company funded nearly $21B in mortgages in March
  • A new record for the direct-to-consumer mortgage lender
  • Funded close to $53B in the first quarter
  • Estimated near-$75B in mortgage applications for second quarter

Let me preface this with the fact that there is a time lag for mortgage fundings, since they typically take 30-45 days from application to close.

In other words, March’s numbers are based on mortgage applications that came in the door in late January or February, before our country shutdown due to COVID-19.

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That being said, Farner said Quicken Loans nearly funded a record $21 billion in home loans in March, its best month ever.

And for the first quarter, did close to $53 billion in mortgage volume, which puts it on pace for a record year.

It could also be enough to surpass Wells Fargo on total home loan volume, if you consider the San Francisco-based bank’s sizable correspondent lending business that is included in the overall numbers.

The fact that Wells is pulling back on correspondent business while Quicken seems to be growing could be very good news for the Detroit-based direct-to-consumer lender.

For the second quarter, he expects nearly $75 billion in mortgage applications – it’s unclear if he meant to say fundings or just isn’t sure yet on when it’ll all close.

Either way, he expects record closings in May based on April applications, adding that they’re “having record days from an application perspective.”

Mortgage Refinances Are Driving Demand

  • Farner said mortgage refi applications highest ever at company
  • Have seen purchase applications dip lately, but pre-quals still happening
  • Expects purchase demand to pick up where it left off once country opens up again
  • Activity coming in pockets depending on individual state’s shelter in place directives

In case you’re curious about product mix, it’s all about the mortgage refinances right now.

Farner said refinance “applications strongest we’ve ever seen,” a testament to the still very low mortgage rates available at the moment, possibly coupled with the fact that a lot of Americans have free time on their hands to apply for mortgages.

He did note that it “comes in pockets” depending on the state involved because of shelter in place orders that vary from region to region.

The company has seen a dip in home purchase applications, which is to be expected given the current uncertain environment, but mortgage pre-qualifications are still apparently happening.

That means prospective home buyers are readying themselves once the country does get back to some kind of normal, which could be soon depending on where you live.

It’s definitely a good idea to be ready, because my assumption is people will be in full fight mode to snag a good house once the dust settles.

Quicken’s Forbearance Rate Lower Than Industry

  • Company is also one of the largest loan servicers in the nation
  • Farner said he believes forbearance rate lower than industry average thus far
  • Focusing on consumer education to avoid forbearance and explain options
  • How forbearance paid back will be based on guidance from Fannie/Freddie/Ginnie Mae

Lastly, Farner talked about mortgage forbearance, which is a hot issue at the moment with the many mortgage assistance programs available.

Aside from being the top retail mortgage lender, Quicken Loans is also a major loan servicer, partially because they want to retain you as a customer for life.

He said he thinks Quicken’s forbearance rate is lower than industry average, though no hard numbers there, and it’s unclear what that’s based on other than the forbearance data released yesterday by the MBA.

The company has grown its loan servicing call center by “hundreds and hundreds of people” who are all working from home at the moment.

Quicken is focusing on homeowner education and other options to avoid forbearance, though again, it’s not clear what those alternatives are.

Perhaps telling people they’ll have to pay it back, so to just keep making payments if they can.

Regarding paying back mortgage forbearance, he said they’re “waiting on guidance” from Fannie Mae, Freddie Mac, and Ginnie Mae, at least with regard to agency loans.

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