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Higher mortgage rates are expected to pressure nonbank origination margins
BTIG forecasts Q2 2026 origination volume for its nonbank coverage list at $154.5 billion, about 3% higher quarter over quarter but below consensus.
HousingWire reports that BTIG expects higher mortgage rates to weigh on Q2 2026 profitability for nonbank mortgage originators, even as slower prepayments may support servicing income.
BTIG said the main near term driver remains the impact of rates on origination activity, pointing to timing differences where loan lock volumes, which drive revenue, are running below funded loan volumes, which drive expenses. It also expects lock volume for its coverage list to be down 1% in the second quarter.
For Q2, BTIG forecasts second-quarter origination volume to rise about 3% from the prior quarter across its coverage universe, reaching $154.5 billion, compared with consensus expectations of $159 billion. For Q3 2026, BTIG expects a 3% decline versus consensus for a 1% increase, adding that risks for guidance are skewed to the downside given the current rate environment.
The firm projects modestly higher gain-on-sale margins in Q2, driven by a mix shift away from refinances toward second liens, which typically carry higher margins. BTIG estimates coverage wide gain-on-sale dollars as a percentage of locks at 1.70% in Q2, with the highest expected gain-on-sale from loanDepot at 3.45% and the lowest from PennyMac at 0.79%.