With this issue, National Mortgage News is completing its 35th year of independent coverage of the mortgage industry, and is getting ready to tackle its 36th.
While it's bad to generalize about most things it is possible to say that there has never been a dull moment in all that time as the industry has cycled back and forth from plush times to broke on many occasions.
When NMN started in September 1976, as National Thrift News, the mortgage business was dominated by thrifts, dull but sound financial institutions that followed the 3-6-3 rule: pay 3% for deposits, charge 6% for mortgages and be on the golf course by 3 p.m. But that was all about to change.
Thrifts got caught in a vicious riptide where their cost of funds climbed over their returns from loans, and many of them went bust at the end of the 1970s and beginning of the 1980s. A few years later there was another enormous winnowing as deregulation prompted some very unsafe bets by a new generation of thrift owners.
By then mortgage banks and commercial banks had drawn even with thrifts as mortgage lenders, and in the 1990s mortgage brokers would take up the slack. Brokers invented the subprime mortgage market as we know it, for good and bad, prompting a hellacious housing bubble.
Meanwhile, an Internet boom in the general economy made some ripples into the mortgage business, starting with the powerful automated underwriting engines devised by the GSEs, which became the most powerful companies in the industry before they started to take on water and now are wards of the federal government.
The Internet bubble popped at the turn of the century. By 2007, another bubble was about to pop. The recession that had begun in the real estate business spread to the mortgage business, well in advance of the 2008 general economic collapse. So, 2011 is the fifth straight year of the latest down cycle.
Does that mean there are two more bad years to go to make up the biblical feast-and-famine cycle of seven years? From here, the business looks tepid at best, so it may be so.
National Mortgage News has covered the industry through good times and bad, not just the good, and stands ready to continue to do so.
