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Great post. It is quite interesting to see how NMLS focuses massively on compliance with ethics (TILA ECOA etc) but then the mortgage companies are actually offering products loaded with discount points and at the very end pyramiding fees from underwriting (and clients take them because they must close) in short it is still an horrendous environment and not getting any better. Scams are all over. Many refin were done to pay down higher cost debt (credit cards etc). Also note the relaxing of definition of qualified mortgages… because memory is short.
$7,000 - $9,000 to originate a loan? Must be very high fees. Reminds me of the scene in The Big Short where Mark Baum was talking to the mortgage brokers in Florida and goes to the strip club. You see why there is a lot of fraud when no one has any skin in the game.
I guess let them compete away. I didn’t buy any of their IPOs.
I really enjoy Marc’s notes and I hope he continues to be a contributor here.
Enjoyed the article as well having been a resi warehouse lender heading into 2007. We are seeing many of the same themes around unchecked growth in non-regulated commercial lenders as well. It accelerates the loosening of credit standards and creates a race to the bottom in pricing.
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