The pace of lenders failing quickens

They are running out of cash to pay bills. unemployment in this space has been frantic for several months now. I was president of a mortgage bank in 2008. It was a slow, painful death. I kept laying off people but could never get costs skinny enough to survive. I was also president of a publicly traded financial services company in 1998. Layoffs saved the company (and got my car keyed ) and got us in great shape for the run up in 2001-2005. Two different companies and two different crashes. Same but different. Same strategy ( reduce headcount) saved us once, doomed us the 2nd time. Now, I watch the chaos and try To figure out how to profit from it. Much more fun and less stressful. Definition: NON QM. Non Qualified Mortgage. Meaning it’s not qualified or “ covered “ by the CFPB’s rules guarding against risky loans. Think Sub Prime loans with a new name.

With new mortgages down 55%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?

8 comments

8 Comments

RWC

Nov 03, 2022

Some good info thanks. The last part is scary the Sub Prime loans with a new name. Please don’t tell me the troubled banks will start selling mortgages to securities firms again and Wall Street comes up with yet another version of CMO’s?

BigBallss

Nov 05, 2022

Replying to

We kept patting ourselves on the back about all of the thousands of consumers we were helping achieve homeownership. Families that otherwise would have never been able to buy a house without our financing. Banks turned them away and we said yes and put up the money for them to buy a house. and hopefully some stayed in their house and still have a home for their kids to inherit. But the reality is that not everyone knows how to handle homeownership or should own a home. We didn’t invent the word it’s the way the world is. In the end some of those same consumers sued us because they said we took advantage of them. We were criticized and burned at the stake because our rates were too high. We were like, “ ok you lend them the money at 2%“, they said,” we can’t they are risky consumers”, to which we said, “ then shut the fuck up”.