WHAT THE HECK IS GOING HERE?
It's got to be a friggin conspiracy of gargantuan proprtions. Who released the hounds on this industry anyways? This is bigger than that vast right wing conspiracy Hillary was whining about years back. Okay, maybe that's a bad analagy but even still, what the heck is going on here?
It appears some of the major players in the arena of the secondary market decided to change the rules they agreed to at the beginning of the game. So now that we've lost two of our major investors, who is going to be willing to do those loans that are a little on the wild side? Aparently the answer is almost no one. Not if they're going to have to buy back all of those the loans that the major players said they would buy, then decided not to buy them anymore.
But here is where the conspiracy comes in. Those players that were buying those loans from the wherehousers, decided they weren't going to buy them anymore. In fact, they decided they wanted the wherehousers to buy back the ones they had already bought. This will make a company go broke overnight, which is exactly what happene. Unfortunalely for the borrowing public, this is going to put the squeeze on them as well.
Now we are going to have to put some money down or pay mortgage insurance to get that home. We may not need to worry about a flat yield curve any longer as it's not going to matter. Those adjustable loans may just go away for a while. It seems that when things are in lline for a correction, and we have been in for one for a while now, that we tend to go too far. And we may not be done going too far yet. Now we're going to see companies narrow their lending practices for fear of not being able to get the loan sold on the secondary market. We are also going to see those companies that were famous for the wild loans, come back towards the normal conforming loan programs.
The past few years were basically driven by greed. Now it's being driven by fear. Funny thing though...............I ain't a scared. I work for a company that's on solid ground, the number of greedy, unethical loan officers has gone down significantly, and I got the sweet love of my lovely bride cheering me on. Other than that, my career basically sucks!
Having said all that, don't start to worry yet. It's going to work itself like it always does. It may get a bit tighter than it has been, but it's going to be okay in the end. We're still going to be lending money to buy homes or refinance them. We're still going to make friends with our clients, and we're going to watch our industry explode with true professionals, which is always good.
So, hang on boys and girls. This ride ain't over yet.
Love ya
Ed
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