When it comes to the Mortgage Industry, I focus on the positive and try to make it fun. So much so, that I take to very unprofessional step of posting something ridiculously silly on most Fridays (let me just sneak this one in, Happy Friday). I’ve gotten a few emails telling me I have my head in the sand. Not true, it’s just that their are plenty of other bloggers that cover the trials and tribulations of our industry, they can have it.
Just because I don’t write about fraud, foreclosures, and the whole sub prime fiasco doesn’t mean I am not concerned. From time to time, I check in on one of the responsible bloggers covering that side of our industry, Morgan
Brown’s Blown Mortgage. Yesterday, Morgan posted a very disturbing story, not so much about the industry, but about another web site that has been covering it.
The Mortgage Lender Implode-O-Meter has sensationalized the failings of lenders across the country. It has it’s fair share of general population readers, but I know it has also become a site that many lender’s employees visit with great anxiety.
Apparently, Credit Suisse and Washington Mutual are reading it as well, and pulled funding from one lender after news of it’s demise appeared on the Implode-O-Meter site. At least, that’s what the lender is alleging in a lawsuit against the site.
While I’m no big fan of the ‘Meter, this just seems wrong. If Credit Suisse and Washington Mutual really did pull funding based on this one report, then they are the the bad guys here. I doubt that anyway. It seems far more conceivable to me that there’s a lot more to the story of why that funding was pulled, and that the lender is simply trying to shut down this site out of spite.
Anyway, I just wanted to bring some extra attention to this case. Do with it what you wish.
I agree about the sensationalism. It’s overdone. My biggest concern about the subprime industry is the constant changes in programs. Many lenders are making their requirements so strict that they look life A or Alt-A lenders (except for their rates). Based on these new program requirements, along with significant rate increases I can’t see how they can be doing any business at all. In addition the effect on the already depressed housing market is very troubling. Ron Check out the tons of Real Estate and Mortgage info at
Alabama Mortgages
I think it is going to get worse before it gets better – I recently left the Wholesale Marketplace where I have made a very good living for the last 11 years in favor of the Retail Market where I recently hung my own shingle. It is a very competitive market place which is good for the consumer and obviously bad for those of us in the business. Those of us with a good understanding of the business and the marketplace will survive. I heard the other day that 48,000 mortgage professionals (some yes some no) have been laid off since late 2006. It is interesting that while the secondary market has currently lost its appetite for Asset and Mortgage backed securities, that treasuries have not benefited more. One would think that the institutional investors that would normally use this paper to boost yields in pension funds, money market funds and the like would flock to govies – that money needs to go somewhere, right?. Last week the economic news was very bond friendly and we did not see commensurate rate improvements in treasuries and therefore conforming products. Now, more than ever, it is important to have a good understanding of Agency Product to be able to offer our client base options that FNMA / FHMLC offers with doc waivers and so forth. The disappearance of the 80/20 has made it necessary to rely on MCM and Home Possible product – even down to the EA1 which offer great terms relative to the Alt A and Sub-Prime options. Recent tax advantages regarding MI and Reduced MI rates for the above products also make these conforming options attractive to those who are down payment challenged (not to mention expanded / generous ratios). At some point the decrease in housing demand and therefore slump in housing prices coupled with a relatively attractive interest rate climate will stabilize at a level where prices are affordable for traditional doc level consumers. In other words, things will return to the way they used to be. People will buy homes that they can afford. The advent of the high LTV stated products with little or no asset requirements has helped fuel artificial demand in the housing market, raising home prices. I say artificial meaning that this is a market segment that was previously unable to participate in the market place due to income and asset requirements. In the meantime, the mortgage industry will shrink to a level that can service the reduced demand. So tighten your belts – This may last a while.
I could not agree more with your opinion on ml-implode. Initially, I found it interesting, but now I see it as being little more than a Mortgage TMZ or Perez Hilton site. Fixation on bad press only makes things worse.
Some friends and I started a new site: brokerwho.com. The idea is to showcase and provide solutions for brokers/bankers who are still in business. The site is still in its’ infancy, but we hope this will help shift peoples focus from problems within the industry to solutions for those who haven’t “imploded”.
Great! I just wonder if you can recommend some blogs or forums about credits or loans. By the way, nice article.