The Mortgage Business Is So Bad... How Bad Is It?

[Elliott]

(WSJ 10/29/23) "The Mortgage Market Is So Bad Lenders Want Ex-Employees to Give Back Their Bonuses​

The mortgage industry is notoriously feast or famine, but there’s no obvious way out of this bust​

David Siegel went to work for an affiliate of Guaranteed Rate in 2021 and got a signing bonus of more than $100,000. Interest rates were super low, and mortgage bankers were raking in cash.

Now that business has dried up, the mortgage company wants its money back. He said it fired him one month shy of the date when it could no longer ask for the bonus back, then demanded the money. Guaranteed Rate and its affiliates are also telling hundreds of other former employees that they have to return their signing bonuses, people familiar with the matter said."





And why is Fannie still hiring and not cutting their staff?

 

[J Grant]

The mortgage business is suffering a long, slow period of retraction after having enjoyed a mega boom period where they made money hand over fist. I do feel bad for many of them of course. They have it even worse than Appraiser since at least we can do some private work or pick up the odd lending job that still is seen. One day, rates will come down again and they will get busier but some will suffer some permanent harm. Like the stock market or RE sales people...when people are in a sales position and make a good deal of their income from commissions or bonuses, this is what happens. A boatload of people refinanced at the low rates so why would they refinance any time soon???

The support staff never go to enjoy the high rolling $ during the boom and are being let go. I hope they can find jobs and recover.

fannie ....if the new house speaker slashes spending ?? Idk if there is any connection. I suppose they manage to stay busy fiddling with data banks and reviewing appraisals to send in for complaints and coming up with more ways to put us out of business.

 

[Tom4value]

As you folks may know, I have been an appraiser since 1991. I then became an LO from 2001 until 2016. I kept appraising as a “side hustle “ until 2016. Anyway, my only, “signing bonus “ was a “no proof” income for 3 months, meaning they gave me an “ unsupported income“ for that time. Never had to pay anything back.

 

[glenn walker]

Maybe there are just too many appraisers LOL

 

[Charles West]

Having never received a bonus this seems odd to me. They give you a bonus subject to a clawback clause in the employment contract? I'd be afraid to do anything with it other than plopped in a savings account.

 

[Terrel L. Shields]

Maybe there are just too many appraisers LOL

for the current volume...but how long will that last? I think we will see a spurt in the stock market in November but then how long will it last. I cannot see how Powell will not add another couple of quarter point increases in the fed rates. 2024 is going to be market chaos but I don't see how volume will change unless home prices fall dramatically and as long as the government spends like drunken sailors on leave I don't see a solution to the inflation issue. How can builders cut prices if materials are going up daily? And if new construction costs are high, there is no incentive to cut used home prices. And no one wants to pay these kinds of payments so sales are slow and slower.

 

[George Hatch]

It's hard to imagine than 8% rates will be the new normal from here on out.

 

[Charles West]

It's hard to imagine than 8% rates will be the new normal from here on out.

I think they come down a notch or two if and when there is a corporate bond issue with commercial property or maybe pressures from financing government debt in or around mid 2024. Of course the bond market may have other ideas.

 

[Fernando]

If it's in the contract and company can get back the sign in bonus, company has right to do that.

 

[Dale Floyd]

It's hard to imagine than 8% rates will be the new normal from here on out.

I’m having difficulties seeing anything less for a long while. Treasuries went over 5% last week.