Brian Chappelle Nails It

At the MBA convention in Chicago today consultant Brian Chappelle of Potomac Partners said it best when he noted that Congress, regulators (and the White House) are "going after the whole mortgage system for problems that no longer exist, and that has a suffocating effect on the marketplace." In short, no one could have said it better. Anyone who works in mortgage banking today knows that the products of the past (subprime, alt-A, payment option ARMs) and the like no longer exist -- at least not in any great numbers. Somewhere some hard money or private lender is funding these loan types, but the volumes are small and the risk is being held by doctors and dentists looking for a 9% yield on their money. How do the 'docs and dens' sleep at night? Answer: the LTVs on these loans are probably at 60% or better. Will Wall Street ever securitize these loans? Answer: Not in a million years. But try explaining all this to Joe Sixpack and all those 'Wall Street' protesters.