“Once you lick the frosting off of a cupcake, it becomes a muffin. And muffins are healthy. You’re welcome.” Adding another expense to a transaction is certainly not welcome, yet that’s exactly what was voted into effect by residents of Los Angeles County in November. When you sell a house, paying a 5-6 percent commission to the real estate agent is typical. In LA there’s another 5 percent tax on top of that for high-priced houses to help fund affordable housing. Apparently home sellers in Los Angeles are slashing prices and sweetening deals before a new “mansion tax” goes into effect on April 1. The effect on supply and demand and pricing will be interesting, especially how it impacts the volume of sales. Along those lines, don’t pad your volume numbers, especially if you’re about to go public, otherwise the Department of Justice may come knocking like it did with Sterling Bancorp. (And don’t discriminate. In this e
Few base their company or family’s savings on the inherent risk in a prediction. But… On a big scale, and we’ve been hearing forecasts of a recession for a year now, JPMorgan Chase’s economists opine that the economy will slip into a mild recession in 2023 as a result of the Federal Reserve's monetary tightening. Of course, recessions usually mean lower rates (one of the topics in today’s Rich and Rob show with MGIC). "We also expect slowing aggregate demand eventually leading to labor market weakness that builds on itself, and we anticipate that we could lose over a million jobs by the middle of '24." Smaller mortgage banks may not be able to wait it out. STRATMOR’s M&A practice is “en fuego” with large and small deals. Mortgage servicing rights continue to hit the open market in varying sizes and shapes. Informally chatting with a couple servicing specialists indicates that the small
Water is a powerful force: just check out this time lapse storm surge video from Ft. Meyers in Florida. Turning to metaphors, Sun Tzu said, “If you wait by the river long enough, the bodies of your enemies will float by.” Some investors and lenders may have adopted that phrase. We’re staring at the autumn and winter, and its ugly out there. Cutting costs fast enough? Best Capital, Finance of America’s retail division going to G-Rate (as reported earlier this week in this commentary) and perhaps closing its wholesale channel (with its low margins and high perceived risk warrantying all the broker business). AnnieMac (American Neighborhood Mortgage Acceptance Company LLC) “as a result of worsening market conditions, has made the difficult decision to cease Wholesale Operations effective October 31, 2022…” (Those impacted by mortgage companies downsizing can post their resume for free here and employers can view them for the nominal fee of