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A general discussion topic of those here at the MMLA conference in Michigan is the ups and downs we’re all facing. While mortgage applications drift down, and industry headcounts go down, and towns on Maui like Lahaina burn down, here’s something that isn’t going down: credit card debt. Talk to any underwriter or loan officer and they will tell you that loans have become more difficult, in part because of borrower debt loads, and sure enough credit card balances hit $1.03 trillion in the second quarter. And it ain’t going down. The number is up 4.6 percent from $986 billion in the preceding three-month period. For some good economist’s perspectives and interest rates in general, and one capital markets guy’s, tune in to “Unparalleled Insights into Trends and Bold Predictions” with Selma Hepp (CoreLogic’s Chief Economist), Michael Fratantoni (MBA’s chief economist), and Rob Chrisman” on Wednesday August 16th at ....
“If they raise the interest rates one more time, you're going to hear Janet Yellen.” Much of the talk in the hallways here at the California Association of Mortgage Professionals event near San Francisco revolves around the Federal Reserve likely raising short term rates on July 26th due to the need to raise interest rates further to bring down inflation that is still too high. But the end to its current monetary policy tightening cycle is close. Compliance may be the new focus. “Tawny Johnson gave me the best mortgage I’ve ever had!” We’ve all seen reviews like that and wondered about them. Anyone who repeats reviews should know that the FTC announced its Endorsement Guides, which provide guidance to businesses to ensure that advertising using reviews or endorsements is truthful and complies with the FTC Act, have been revised. In other Federal Trade Commission news, it has opened an investigation into ChatGPT, released by Open AI whic ....
My notes from the MBA’s conference this week continue, including talk about new home sales being +4.1 percent for the month (+11 percent year over year, bringing a smile to builders everywhere). Although most of the focus of the conference was on the secondary markets (although let’s face it, there isn’t a plethora of new investors or products), the primary markets continue to be a discussion topic. Some lenders have seen LOs move into the broker world, some have seen them come back. The transition to being a broker is not always “rainbows and unicorns.” It appears to have better “top line” revenue but what about the “bottom line” when a shop has to pay for their own benefits, marketing, IT support, etc. (STRATMOR has a fine write up on the subject below.) Lenders continue to examine the branch model, whether it is traditional or P&L (revenue) based. The MBA defines an “expense management” ....
Born in Ukraine, Golda Meir said, “Old age is like a plane flying through a storm. Once you are aboard there is nothing you can do about it." (Doubtful anyone called her Goldy.) Her time as the Prime Minister of Israel ended in 1974, and since that time oldsters in our biz have seen the yield curve invert ten times, give or take. Bond traders are no longer fully convinced that the Federal Reserve will do one more quarter-point interest-rate hike, given the nervousness about First Republic and fear of an economic downturn; recessions have tended to lag yield curve inversions by 6 to 18 months. (STRATMOR’s current blog is “The Yield Curve Is Inverted: Should Lenders Care?”) Politics are also on trader’s radar screens: A failure by Congress to raise the debt ceiling and prevent a default on US government debt would result in an "economic catastrophe" that will push interest rates higher for even longer, per Treasury Secretary J ....
Fun with numbers! 1: the number of Chinese surveillance balloons over Montana. (That we know of.) Did you know that the last day of 2023 is 123123? (You heard it here first!) While we’re on random numbers, Atlanta has almost 25 thousand surveillance cameras, grabbing the honors as the most heavily surveilled city in the U.S. with 50 CCTV cameras for every 1,000 inhabitants. (“The research also suggests that there is little correlation between higher camera figures and lower crime indexes.”) Shifting to mortgage-related numbers, given the Fed news this week, overnight interest rates aren’t the same as 30-year mortgage rates, of course, but moves in interest rates impact a potential borrower’s ability to buy a home in a given price range. Here’s a handy-dandy chart for LOs to help borrowers to see how rates impact affordability. With generic rates in the 6’s for home loans, LOs are keenly interested in how that compares to, say, student lo ....