Fiercer competition in the wholesale channel spurred United Wholesale Mortgage (UWM) to improve the ceiling on conforming loans on Wednesday, prior to the Federal Housing Finance Agencys (FHFA) decision in November.
UWMs move follows an announcement on Tuesday from competitor Rocket Pro TPO, that was first from the gate this season in raising loan limits on agency-eligible properties to $715,000.
On Wednesday, UWM increased the conforming loan limit from $647,200 to $715,000 for a one-unit property, forecasting that the FHFA increase the limit by at the very least 10% in 2023.
In Alaska and Hawaii, the ceiling on loans originated by UWM and purchased by Fannie Mae and Freddie Mac rose from $970,800 to $1.073 million.
UWM said it really is centered on giving home loans a competitive advantage.
This past year, lenders didnt raise conventional loan limits until Sept. 30, when rates were still in the reduced 3% range. However, this season, companies are under great pressure to launch new initiatives to attract brokers and land more purchase businesses amid high mortgage rates.
HousingWire recently spoke with Jon Irvine, Chief Production Officer at Change Lending, about how exactly brokers can gain a fresh competitive advantage in today’s tight market.
Presented by: Change Wholesale
UWM, for instance, launched theGame On pricing initiative in June and entered the HELOC space in August. Meanwhile, Rocket Pro TPO also plans to diversify its product portfolio by offeringhome equity loansin mid-September.
The expectation is that other mortgage brokers increase loan limits prior to the FHFAs November announcement.
The Housing and Economic Recovery Act established a formula in 2008 that mandated that the ceiling could only rise after home prices returned to pre-recession levels. That condition was finally met in 2016 once the FHFA increased the conforming limits for the very first time in ten years.