Skyrocketing prices and rising interest rates…
Pool of buyers shrinking… every percentage point increase shrinks the pool of potential buyers for any given property exponentially.
Appears to be many smaller startups that entered the market during a boon. They were over leveraged and lacked the leadership and experience to survive a downturn. What’s shocking how quickly they have folded operations.
Yeah, a fellow teacher quit to become a mortgage agent last year. I told him to enjoy his year of employment and he looked at me like I was insane.
Commercial, however, is ripe for a gigantic implosion. The big players are going to do whatever they can to turn it into a long, slow grind down rather than a crash, but it cannot be avoided.
The reason is bank savings interest rates. Most stand around 1%. Savers are splitting the difference between their low bank savings rate and the going 6% mortgage rate and loaning it to relatives for mortgages. Meanwhile banks are losing investment money, and they don’t seem to care.
My girlfriend is a mortgage underwriter and typically has between 25-30 files in her pipeline. For the past couple of months it has slowed to 4-5 files.
30 years ago, when I bought my current home here in central Illinois and a local bank financed it. The very day we moved in there was a letter in our mail box from that local bank telling us that they had sold our mortgage to a company in Iowa.
Exactly same terms, interest rate, payments etc. 15 year mortgage, paid off in 7 years.
Can anyone explain to me how either the original lender or the new one profited by the sale of my mortgage?