Loan Think

How many of you out there have been thinking that America is a little bit like a consumer who's considering a 'strategic default' on his home mortgage? Think about it for a moment: a strategic default candidate is employed but looks at his mortgage debt and says, "The house is underwater by $200k, so why just not walk and pay rent across town?" (Only crazy people don't pay the mortgage, right?)

By now, all the pundits and most of the analysts on Wall Street believe a debt deal will get done by Monday morning, so the next question is the most obvious: where do we go economically from here? Politically, blood is in the water and voters from both parties (and independents) will pull the lever accordingly in November 2012.

I’ve just finished my third (yes, No. 3) midlife crisis! I spent 30 days in Europe last month—10 days in Italy and 20 days in Greece! It has always been a dream of mine to not to be just another typical tourist—I wanted to spend three or four days in one location, getting to know each city, its people, how they lived and worked from day to day.

Yes, I know most of the housing market looks ugly, but consider the latest news out of Denver where our Evan Nemeroff reports that apartment vacancies reached a 10-year low last quarter: 4.8%. Anyone who’s ever sought a decent apartment rental in the greater New York metro area knows how tight that market is as well (has been for several decades.)

I have said this before and I will probably say it again. The return on one's investment in a social media marketing campaign needs to be measured, just as one would measure the ROI on a traditional marketing campaign.

On June 4, a San Francisco judge (U.S. District Court Judge William Alsup) told Securities and Exchange Commission attorneys that the Dodd-Frank Wall Street Reform and Consumer Protection Act will not be applied retroactively and thereupon dismissed a couple of Securities and Exchange Commission claims against former financial executives.

It appears that a mini land rush into correspondent lending is occurring. But not all mortgage bankers are enamored with the idea. Dave Zitting, CEO of Primary Residential Mortgage Inc., tells us that some lenders are rushing into correspondent “without properly building out their channel operations.”

I want you to remember this number: 778. Got it? That’s how many points the Dow Jones Industrial Average fell in late September 2008 when the GOP defied a Republican president (George W. Bush) and killed the TARP bill which was designed to save our nation’s financial system.

Is MetLife’s decision to exit the banking sector but remain in residential mortgages a trend or just an aberration? Time will tell, but with all the new rules and regulations (Dodd-Frank, Basel III capital rules and MSRs) for the past year we’ve been hearing from industry officials who believe nonbanks may be the net winners here, at least when it comes to mortgage banking.

Thursday morning House Speaker John Boehner basically told President Obama to stuff it, which means the chances of Congress averting a default just went up. The yield on the benchmark 10-year Treasury rose to just shy of 3%, which means mortgage money will get more expensive too.