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Whether it is independent mortgage banks or companies with the largest market caps in the world, new products are being developed and rolled out to help drive growth. Apple unveiled new iPhone models, versions of the AirPods Pro, and several smartwatches yesterday. Closer to home, lenders are also exploring new products to drive volume. Newrez announced a 40-Year IO option, designed to increase purchasing power for homebuyers by offering a 40-year loan term with interest-only payments for the first 10 years. The longer loan term does lower monthly payments, though I received a couple reader comments saying the CFPB will certainly be keeping its eye out for any predatory lending practices. Government is omnipresent in the financial industry, and often for the better. New guidance from the Federal Deposit Insurance Corporation (FDIC) regarding multiple re-presentment nonsufficient funds fees suggests that banks eliminate the fees altogether. (Today’s podcast is available here and ....
Happy 420 Day. (Tomorrow, by the way, is Happy Surprise Drug Test Day.) Another day, another layoff story from Better.com. The human tragedy in Ukraine continues, but the world financial markets seem to be concentrated on the mounting inflation numbers. Our Federal Reserve is viewed as playing catch up, and we are reminded of its mandate of “maximum employment, stable prices, and moderate long-term interest rates.” Here in Atlanta, in the MBA and STRATMOR Peer Group Roundtable meetings, much of the conversation revolves around bank and non-bank lending. Banks and credit unions are interested in shifting to HELOCs, construction lending issues, and more portfolio lending due to excess cash and deposits, all the while trying to keep trained staff on board. For independent mortgage bankers, the attention is on reducing costs, adjusting staff levels, and how to work preapprovals and enable cash buyers. Indeed, IMBs need to hunker down to outlast their competitors. The human el ....
Today’s commentary: 100 percent the truth except for the stuff I make up randomly. I am not making up the Federal Reserve’s meeting this week with traders nearly certain that a 25-basis point rate hike will be announced. And I am not making up today’s nickname: Pi Day has come around once again, which is also, coincidentally, Albert Einstein’s birthday. (Albert had his share of quirkiness, including marrying a woman who was his cousin on his mother’s and father’s side.) Although pizza promotions have taken over this date, every year March 14 (3.14) celebrates the irrational number that we use to explain the relationship between a circle’s circumference and diameter, bringing joy to nerds everywhere. Pi is an irrational and transcendental number meaning it will continue infinitely without repeating. Wells Fargo sure hopes that its mortgage scandals won’t continue indefinitely. Wells, which represented the “gold standard ....
Do you smoke weed? Have you been vaccinated against COVID? Too early in the workweek for those questions? (Is it okay to ask if someone’s been vaccinated against polio?) Some questions aren’t, can’t be, shouldn’t be, are too politically charged to be, asked. We don’t want to need a lawyer to have a conversation with a co-worker or underling. This one is a little easier: What percent of outstanding MBS (mortgage-backed securities) is owned by the Federal Reserve? The answer is 30 percent . That’s a lot. Smarter minds than mine opined that the $1.5 billion cap fear (remember that when it came to window sales?) was exaggerated. Fifteen years ago securitizing was normal, even if you were doing $50 million a month. The $1.5 billion cap per Agency window sale cap ....
Today I head to San Diego for a California MBA board meeting, the home base of the Pacific Fleet. It’s been 80 years since Pearl Harbor, a “date that will live in infamy.” That was a terrible day. We all have bad days, but nothing in comparison to that and it is important to keep those days in perspective. The United States and our allies faced off against Japan, Germany, and Italy for the following four years. The residential lending industry is wondering if Amazon and Apple will face off against the Consumer Finance Protection Bureau. Rohit Chopra, age 39 and Director of the CFPB, faces limits in policing individual tech companies , which haven't been subject to supervision the way banks are. People continue to write, asking about the CFPB’s reach. The CFPB’s ....