{"id":37541,"date":"2018-09-09T10:59:08","date_gmt":"2018-09-09T15:59:08","guid":{"rendered":"http:\/\/olduvai.ca\/?p=37541"},"modified":"2018-09-09T10:59:29","modified_gmt":"2018-09-09T15:59:29","slug":"even-mortgage-lenders-are-repeating-their-2006-mistakes","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=37541","title":{"rendered":"Even Mortgage Lenders Are Repeating Their 2006 Mistakes"},"content":{"rendered":"
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Even Mortgage Lenders Are Repeating Their 2006 Mistakes<\/a><\/h3>\n

You\u2019d think the previous decade\u2019s housing bust would still be fresh in the minds of mortgage lenders, if no one else. But apparently not.<\/span><\/p>\n<\/header>\n

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One of the drivers of that bubble was the emergence of private label mortgage \u201coriginators\u201d who, as the name implies, simply created mortgages and then sold them off to securitizers, who bundled them into the toxic bonds that nearly brought down the global financial system.<\/p>\n

The originators weren\u2019t banks in the commonly understood sense. That is, they didn\u2019t build long-term relationships with customers and so didn\u2019t need to care whether a borrower could actually pay back a loan. With zero skin in the game, they were willing to write mortgages for anyone with a paycheck and a heartbeat. And frequently the paycheck was optional.<\/p>\n

In retrospect, that was both stupid and reckless. But here we are a scant decade later, and the industry is headed back towards those same practices. Today\u2019s Wall Street Journal, for instance, profiles a formerly-miniscule private label mortgage originator that now has a bigger market share than Bank of America or Citigroup:<\/p>\n

The New Mortgage Kings: They\u2019re Not Banks<\/a><\/strong><\/p>\n

One afternoon this spring, a dozen or so employees lined up in front of Freedom Mortgage\u2019s office in Mount Laurel, N.J., to get their picture taken. Clutching helium balloons shaped like dollar signs, they were being honored for the number of mortgages they had sold.<\/p>\n

Freedom is nowhere near the size of behemoths like Citigroup or Bank of America; yet last year it originated more mortgages than either of them, some $51.1 billion, according to industry research group Inside Mortgage Finance. It is now the 11th-largest mortgage lender in the U.S., up from No. 78 in 2012.<\/p>\n

\"private<\/a><\/p><\/blockquote>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Even Mortgage Lenders Are Repeating Their 2006 Mistakes You\u2019d think the previous decade\u2019s housing bust would still be fresh in the minds of mortgage lenders, if no one else. But apparently not. One of the drivers of that bubble was the emergence of private label mortgage \u201coriginators\u201d who, as the name implies, simply created mortgages […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[63,9021,406,7544,21578,2339,6876],"class_list":["post-37541","post","type-post","status-publish","format-standard","hentry","category-economics","tag-banks","tag-dollarcollapse-com","tag-housing-bubble","tag-john-rubino","tag-mortgage-lenders","tag-mortgages","tag-shadow-banking"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37541","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37541"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37541\/revisions"}],"predecessor-version":[{"id":37542,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/37541\/revisions\/37542"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37541"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37541"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37541"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}