“Thanks to overbearing post-crisis government mortgage regulation, not only can’t many get the mortgage they want and deserve (costing 2 million jobs per JPMorgan’s Jamie Dimon), but as I pointed out recently, it costs roughly double ($4,000 pre-crisis vs. $8,000 today) for a lender to make a home loan. And now, on top of that, because of reduced competition caused by the crisis and government regulation (which acts as a barrier to entry), mortgage lenders today make almost 2.75 (60.5 bps divided by 16.2 bps) times the profit margin they did pre-crisis…

…This is Elizabeth Warren’s record…great for the surviving lenders and not so great for the American home borrower and prospective homebuyer.”, Mike Perry, former Chairman and CEO, IndyMac Bank

Excerpt from mortgage industry newsletter:

June 4, 2017

To Our Clients, Colleagues, and Friends:

• In the five years ending in 2016, the average profit per loan for mortgage bankers was 60.5 bps. Now go back to the five years ending in 2008, before the financial crisis led to the Fed lowering rates, and the average profit per loan was 16.2 bps. Would you be willing to go five years earning just 16.5 bps per loan?

Posted on June 9, 2017, in Postings. Bookmark the permalink. Leave a comment.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: