Nonbanks poised to grab bigger mortgage share; eBay to offer loans in U.K.

Wall Street Journal

More pie

Amid shrinking margins for mortgage lenders, “originators like Rocket Cos. and UWM may emerge with bigger slices of the pie in what could still be a solid market,” the Journal says. “Both firms say they are expecting the purchase market to be far stronger and are suggesting they could see big numbers there. Rocket said it is projecting record quarterly purchase volume for itself in the second quarter, and UWM said it could hit its own all-time purchase highs in the second or third quarter.”

“Rocket noted that tight constraints on supply lately mean that it has many borrowers with approvals to buy homes but who haven’t done so yet. UWM is expanding its loan categories to its broker partners, such as jumbo mortgages, as a way to capture even more of their volume and help them capture more of the purchase market overall.”

Whistle blown

The Commodity Futures Trading Commission’s whistleblower program “is in turmoil over a potential payout exceeding $100 million to a former Deutsche Bank executive—one so large it would deplete the agency’s whistleblower funds and has led it to seek congressional action. The executive had provided information that helped CFTC and Justice Department investigations that led to roughly $2.5 billion in settlements with Deutsche Bank in 2015, including $800 million with the CFTC. They alleged that the bank manipulated the London interbank offered rate.”

“Some CFTC officials who have reviewed the case internally have recommended the whistleblower payout, calculated as a percentage of the agencies’ legal settlements. But the application is under investigation by others. Agency leaders have contended there is no mechanism to pay the bank executive and other applicants and keep funding the whistleblower program.”

Financial Times

Lending landmark

eBay plans to announce Wednesday the launch of a new small-business lending program “which it described as a ‘landmark’ move marking its most significant step yet into financial services, pitting the ecommerce group against both high street banks and its former subsidiary PayPal. The program will be closely watched by executives at mainstream banks, who have long worried about the potential impact large tech companies could have on the sector.”

The “Capital for eBay Business Sellers” program, or CEBS, “will initially offer loans of between £500 and £1 million to the 300,000 small and medium-sized businesses that sell on its U.K. marketplace, through a partnership with online lender YouLend. eBay is also working on further lending options targeted at larger companies that will be announced in the coming months.”

Total disclosure

JPMorgan Chase must “disclose more documents ahead of a trial in which it stands accused of enabling the misappropriation of almost $900 million in Nigerian state funds. The U.K. High Court on Tuesday granted the African nation’s application to secure records from top U.S. executives and compliance officers involved in signing off $875 million in payments between 2011 and 2013 relating to a controversial oil license deal. The trial is due to start next February after the bank failed in a 2019 attempt to have the lawsuit dismissed.”

Bitcoin-bullish billionaires

“Billionaires Peter Thiel, Louis Bacon and Alan Howard are among the backers of a new cryptocurrency asset exchange that will bet heavily on decentralized finance radically reshaping trading and investment in digital assets. The venture, run by blockchain software company Block.one, will be called Bullish Global and has been capitalized with more than $10 billion in cash and digital assets ahead of its launch later this year.”

“Block.one has said it will offer automated market making on a decentralized exchange, a development that could potentially offer a radically different way for investors to trade on markets. Instead of using a traditional market maker to persuade buyers and sellers to trade on exchanges, investors will be able to deposit their own assets into a smart contract and let automated computer code handle buying and selling with interested parties. The smart contract will hold funds and take in data, as well as performing settlement and clearing.”

Get serious

“After years of talk, central bank digital currency has suddenly become serious business,” an FT guest editorial says. “CBDCs could boost government coffers, displace costlier taxation and improve the efficiency of payments.”

Elsewhere

Opening moves

Want to know the plans of the world’s biggest banks to reopen their offices? Reuters offers a scoresheet.