There’s a splendid joke about the definition of an economist being someone who “will know tomorrow why the things they predicted yesterday didn't happen today.” Everyone’s warning everyone about everything these days: Recessions, plagues, housing collapses, overnight rates near 5 percent. The bigger the prediction, the bigger the headlines. No one has a crystal ball, but one thing for sure is that with the increase in both short and long-term rates, independent mortgage banks are seeing even less revenue. For example, their warehouse line costs have gone up. Optifunder’s Mike McFadden noted, “Rob, although every contract is different, with different covenants, with the migration from LIBOR, most warehouse lenders have resorted to some sort of SOFR as the reference rate. Each warehouse lender, however, has resorted to different terms or sources of SOFR (which is something Optfunder helps sort through). In general, many warehouse lines are based on a spread to Overnight SOFR, which is a short-term rate closely impacted by the Fed’s actions, and this spread varies materially based on lender. But the base rate has gone from ~5bps 6 months ago to over 300bps as of last week, meaning that for many IMBs the effective cost of borrowing has increased by 295bps in six months.” (Today’s podcast is available here and this week’s is sponsored by EarnUp, reinventing payment and data flows in real estate ecosystems, origination, mortgage, and fintech. We feature an interview with Mark Walser, President of Incenter Appraisal Management, on the latest in the appraisal space.)