What We're Hearing

So, things are looking up in the economy, huh? Let’s look at the events of the past 24 hours or so: Chipmaker Intel reported strong earnings and gave a somewhat positive spin on its business going forward; Goldman Sachs knocked the ball out of the park with its earnings (thanks to stock and bond trading profits); and, yikes, a newspaper company (Gannett) reported an unexpected profit of $70 million. That’s right folks, a newspaper company. Meanwhile we keep hearing stories about how the nation’s big five residential lenders – Wells Fargo, Bank of America, Chase, and Citigroup – have a monopoly on the home mortgage business and are making money hand-over-fist. True or not? Who knows for sure but we also keep hearing stories that many lenders continue to tighten underwriting guidelines. This bit of intelligence comes from a reader in the greater New York Metro area. He told me that one savings bank in the New York City area is telling correspondents that it will only fund mortgages on homes where the price is no greater than $700 a square foot. (There are, apparently, exceptions to the rule.) This lender is telling loan officers that it may reduce the loan size and/or add to the interest rate. Reportedly, a few New Jersey lenders won’t even fund mortgages in Manhattan anymore if the LTVs are north of 80%. And I would guess the once red hot Hoboken condo market is suffering too. I used to live there many moons ago. Stay tuned...