Mortgage Market Craziness

The feds are trying to provide some liquidity to the mortgage market (maybe even accepting those pesky mortgage backed securities as collateral) while the market has priced a 55% change of a rate cut into it. Meanwhile, Homebanc files for bankruptcy, Washington Mutual and Countrywide are on the ropes, and all bank stocks are dropping on fears of everything from mortgage market illiquidity to dwindling investment banking fees.

It's an interesting time to be a loan officer out there looking to build his book of business. I think this is an excellent time to establish myself and someone who is still in the game, who works for a lender who can close and fund (very important) the loan. It's a time to gear up and make those calls to possible referral sources that I've been putting off. To work with developers whose preferred mortgage broker may not be able to close the jumbo loan.

I think I'll be able to increase my book of business during this shake out.

Decade High On Default Rate

One thing that is a blessing about focusing on the Manhattan coop market is that the board approval process and the down payment requirements don't create a market for subprime mortgages. I've avoided the subprime market for this simple reason, and I'm glad when I read that the default rate has risen to 10% of the mortgages sold to investors. That's up from 6.62% according to a report by investment bank Friedman Billings Ramsey & Co. I saw this report in REALTOR Magazine's Daily News.