“In February 2002, Ken Posner, at that time a highly respected mortgage industry equity analyst at Morgan Stanley, published a widely read and admired research report entitled US Mortgage Finance, The American Dream Industry: 2002 – 2020 in which he wrote: “We project 7-8% annually compounded growth from 2002 through 2020, driven by consumer preference for higher mortgage leverage, as well as lower processing costs and more flexible underwriting.”…

…Posner went on to say that, “Our work suggests that banks and thrifts can’t compete with the GSE’s cost leadership in the investment function, and they are generally less efficient originators than independent brokers and [mortgage] bankers.”


But today, just thirteen years after Posner’s report, the mortgage industry is decidedly not a growth industry; the GSE’s may soon be replaced by private sector guarantors; flexible underwriting and higher leverage are generally out the window; increased compliance costs have more than offset what otherwise would be more efficient and lower cost processing; and the competitive strength of banks and thrifts relative to independent brokers and mortgage bankers has never been stronger. This from Dr. Matt Lind of STRATMOR.”, Excerpt from June 2015 Mortgage Industry Newsletter

Posted on June 10, 2015, in Postings. Bookmark the permalink. Leave a comment.

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