I should know

More on HELOCs, Second Liens and Rose Colored Glasses

Your data is informative and interesting; very well done. However, your charts are so full of your logos and self promotion that they are nearly impossible to read. The last two charts with line graphs use similar colors and pencil thin lines. Increase the color contrast and line size. Also, please stop twisting them sideways, it doesn't change the outcome, it just makes it harder to read, once again.

Ten Comments on Housing

Danish Dude wrote: “If you live in Paris, do you want to own a vacation place 6 time zones and 8 hours of flight-time away in Miami - or take the TGV to southern France? The food is better there, too.”

While I am not agreeing or disagreeing with most of your comments, I would ask you this; would you call it unlikely and a bad investment for somebody on the Eastern seaboard of America to have purchased real estate (second home or rental property) in Hawaii 5 or 10 years ago; we are 6 timezones away? I would neither call that possibility unlikely or imprudent. Also, food in Hawaii is not nearly as good as food in New York City, Washington DC, or Miami Florida.

Mortgage Brokers, RIP

I’ve been in the retail mortgage origination business for 38 years. Over that past 14 years I’ve worked for one of the most successful lenders in the country. During that time I’ve directly oversaw an average of more than $100 million per month in fundings. To say that a broker who is brokering a loan though me or another national lender can close a loan faster than we can close the same loan ourselves is irrational and ludicrous. While there certainly are a few honest brokers out there, the VAST majority are unethical scumbags with one goal in mind on every loan they do; make as much money for themselves on each loan as possible. Their entire calculation and strategy for the loan was how many points over market and how big of a YSP they could get to build their commission. Whenever I would try to recruit a mortgage broker, they would say “why should I work for you and make 50 to 70 basis points commission per loan when I am making 250 to 600 bps brokering loans?”

I’ve always operated on a theory that my father taught me: You can scalp a man once or cut his hair a thousand times. I’ve made plenty of money in this business over that past 38 years treating customers right and making a little on every loan. There will be a huge fallout of brokers, it’s already happening. Most of the dropouts are and have been brokers over the past 16 months. However, brokers are like cockroaches (no offense to cockroaches meant) a number of them will survive, there’s no way around it.