“Why did New Jersey get all the toxic waste and California get all the lawyers? New Jersey got to pick first.” (Hey, I don’t write ‘em.) Quips aside, California accounts for 20 or 25 percent of the nation’s residential lending, depending on who you ask. The Golden State’s economy has been growing steadily while the global economy has at times faltered, and as a result it’s poised to surpass Germany to become the fourth-largest economy on the planet! It jumped seventh-place Brazil and sixth-place France in 2015, and in 2017 it passed the United Kingdom, and has been in fifth place since. The current figures won’t be published until next year, but both Germany and California have a GDP of $3.5 trillion, and one forecast puts California up $72 billion over Germany. And, of course, right in the thick of advocacy and education is the California MBA. If you have questions about the issues that lenders are grappling with out West, contac
The financial press seems enthralled with the business cycle. Expansion, contraction, rates and stocks up, rates and stocks down. Right now they’re all stumbling over themselves looking for signs of a recession. Recessions, of course, tend to lower rates since the demand for credit drops. European growth projections are poor. No one really knows what is going on in China. In the United States, the Federal Reserve has pushed the Fed Funds rate (the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight) from near 0 percent to what could be 4.75 percent by year end. There are some signs of softening in the U.S. job market (like job openings declining), but household debt service levels have dropped and savings levels are doing okay. The team at the Mortgage Bankers Association is forecasting appreciation levels near 0 percent for 2023 and 2024. There’s your snapshot! (Today’s podcast is available here. This wee
Camping: “where you spend a small fortune to live like a homeless person.” Lenders have done a remarkable job in the last few years trying to reduce homelessness in an indirect way, namely putting credit-worthy borrowers in well-collateralized properties in a compliant manner despite COVID. But let me get right to the point. It’s not good out there now for residential lenders, or their counterparties. After a remarkable, record-setting 2020 and 2021, the industry is now suffering, and companies are adjusting. (The current STRATMOR blog is, “Mergers and Acquisitions Continue On.”) We all knew the good times wouldn’t last forever, but the degree to which things have plummeted has been surprising. First the corporations were hit, then branches, and now mortgage loan officers (MLOs) are feeling the pain of a) very little business, and b) higher rates. Do IMB originators think that their 100 or 150 basis point commissions are untouchable, especially
While investors who “jumped the gun” on establishing their own conforming conventional loan limits ahead of the official proclamation at the end of November by the FHFA are wondering if they “spoke too soon” as values drop, time is rushing by. Kids are back in school, learning about Cuba and having pizza. We’re losing about 3 minutes of daylight a day. Children are picking out Halloween costumes. There are fake Christmas trees in Costco. We don’t turn back the clocks (daylight savings time in all the states except Arizona and Hawaii) for another month, November 6. Things are happening behind the scenes, and today’s Rich and Rob Rundown has Nadia Evangelou, the National Association of Realtor’s Senior Economist and Director of Forecasting, and Jim Parrott, a nonresident fellow at the Urban Institute and owner of Parrott Ryan Advisors. Topics will include FHA pricing moves, FHFA pricing moves, the FHFA on credit scoring models, fore