Loan Think

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.

By now you’ve heard the stories and seen the evidence yourself: mortgage credit standards are much too tight. Over the past year a handful of jumbo lenders and brokers have told me about applicants who could not verify all their income, but had plenty of money in the bank to cover the payments. What happened to these applicants?

One major belief of ultra right (Tea Party) politicians is that the federal government is too big and that rules and regs need to be cut to spur private sector job growth. On paper that sounds nice, but mortgage servicers from coast to coast surely are nervous about layoffs in both the private and public sectors because almost every mortgagor without a job is potentially a customer who might default in the months ahead.

I recently came across a press release that said what I have been saying for years—the only way small businesses are able to compete against the big guys is by their emphasis on customer service.