“The human brain is the most amazing organ in the human body. It works 24 hours a day, 365 days a year, from birth up until the moment that you buy your first NFT.” Money, some say, makes the world go ‘round. Last week we all learned that net production income for independent mortgage bankers fell to a $301 loss (13 basis points) for all of 2022, according to the MBA, a series low for the index which began in 2008. Marina Walsh, CMB, MBA’s VP of Industry Analysis, sagely observed, “The stellar profits of the previous two years dissipated because of declining volume, lower revenues, and higher costs per loan (which hit $10,624 per loan).” True: 1.5 closed loans a month per production employee stinks. LD knows a thing or two about rough times, and the industry took note of loanDepot’s settlement and cooperation agreement with Anthony Hsieh, its founder, chairman, former CEO, and largest shareholder. (LD is now trading around $1.52/share af
“Where can you always find money? In the dictionary.” Plenty of lenders and finding the money to buy other companies while smaller ones are looking for the right buyer. Eat or be eaten seems to be the name of the game as lenders hungry for production are courting other lenders. Some just get out of the game entirely. (See lender and investor section below.) Cutting costs and being efficient continue to be of paramount importance regardless of plans for the future. Is the credit process cost effective and efficient? Yesterday I mentioned changes in the credit world and received, “Rob, when will companies learn that there are ‘too many snouts in the credit trough’? There’s Fair Isaac, the Bureaus, and the credit resellers. It is not a level playing field, and now, like the old days of having different gfees for different lenders, lenders are slotted into ‘tiers’. In the next few years, we’ll be moving from a tri-merge environ
“Do you know that humans eat more bananas than monkeys? Think about it, when was the last time you ate a monkey?” Words and terms are important. At this point, any company not having layoffs, reductions in force, or “right-sizing” (such a PC term) makes news, not the organizations actually making cuts and changes. (In K-pop news, even BTS announced a “hiatus” to focus on solo careers after nearly 10 years together.) And lenders aren’t the only ones cutting back. Real estate firms Compass and Redfin (owner of Bay Equity Home Loans) are laying 6-10 percent of their staff off. Meanwhile, originators are working with potential borrowers still on the fence about buying a home grappling with affordability issues. The current STRATMOR blog is titled, “Owning a Home: The Dream is Alive and Well.” Speaking of owning a home, did you know that New York homeowners are required to comply with a “Ghostbusters Ruling” when l
Besides a reminder that it is Teacher Appreciation Week, how about some loan officer humor to lead off Monday? “We’re closing on our house next week. Sorry we didn’t use you.” “Oh, that’s okay. You should really go buy a new car this week to celebrate.” LOs have a lot going on, including dusting off their adjustable rate mortgage playbooks: ARMs are making a comeback. Rate talk dominates. Unfortunately, the pricing isn’t quite there yet to their complete liking. And despite the uptick we’ve seen in ARM locks (around 8 percent industry-wide), the yield curve is extremely flat, so there is limited incentive to move into a 15-year loan or an ARM at this point. And regarding the yield curve, the two-day Federal Reserve meeting will conclude with a rate announcement this week on May 4. The market has fully priced in a 50 basis points hike for May and at least another five to six 25-point hikes are expected before the end of year
Sure, Fannie had $5.2 billion of net income in the fourth quarter of 2021, but money can’t buy you love. Love is more of a chemical reaction than a statistical study, but computers don’t deal so well with that. But stats will tell you that apparently the best place to find love is Buffalo, New York. Lending Tree released a report considering seven variables, including median single-person household income as well as the percentage of the population that isn’t married, or lives alone, to help determine which of the nation’s 50 largest metros are the best for single people. Rounding out the top five were Cleveland, Louisville, Detroit, and a tie between St. Louis and New Orleans. MLOs know that because single people often can’t rely on a “significant other” to bring in extra income, they need to take extra care that they’ve got enough money to make ends meet… or make a mortgage payment so areas with low costs of living can b