Rocket Mortgage to trim 8% of workforce as home-loan market shrinks • Hacker News Board

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#241

Post by chad_c » Thu, Apr 28, 2022, 1:30 PM UTC

redshirtrob wrote: post #237

Has anyone actually used Rocket? Every time I (or a friend) have looked at them they have higher closing costs and wanted multiple points to close the mortgage. I was able to do way, way better by going with a local bank, as did my friends. The only thing I can figure is they are better for folks with "good" (not "excellent") credit and can maybe close the loan faster.

I refinanced with them 2 years ago; they beat my local credit union and several banks at the time. Closing costs were competitive and extremely easy to schedule -- they sent an attorney to my home.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#242

Post by JohnWhigham » Thu, Apr 28, 2022, 1:31 PM UTC

streblo wrote: post #134

JetAlone wrote: post #90

Buying a home mortgage is signing yourself over to a lifetime of servitude and uncertainty if you lose your income stream. Buy a property out of pocket to live in and make the most of a DIY life at a fraction of the cost and an odd stress differential, or just keep renting and be agile enough to roll with the punches.

Most people don't do the math and realize that over a long enough time horizon a 30 year fixed mortgage will cost you less than purchasing the home outright. This assumes you take the money you would have sunk into the home and instead invest it at a higher rate of return, which is an option available to most home owners.

Don't forget to factor in all the maintenance costs that one doesn't have to worry about when renting.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#243

Post by chasd00 » Thu, Apr 28, 2022, 1:32 PM UTC

misja111 wrote: post #98

hans1729 wrote: post #19

Earlier quoted context omitted.

I mean, it's not really a burst, we're just hearing the hissing noise of the obvious leak. The true demand from people with the intend to actually live in the estates has been constantly decreasing since around 2000; the real salarys dropped since then, so did the buying power. The only reasons people found buyers at x3-x10 (!) prices were a) that there is a class of people wealthy enough to still afford the purchase…

> When 90 (?) percent of people simply lack the buying power to participate in the real estate market, but the other 10% happily sell each other estates, that's not a bubble, the real estate market just stopped interfacing with the vast majority of the population. This. And it was not only happening in the housing market, but also in a few other markets such as arts and certain jewelry. What happened during the last…

I think the bulk of the inflation we’re seeing is from the pandemic where we shut off production by making everyone stay home but then dramatically increased demand by writing everyone checks.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#244

Post by wil421 » Thu, Apr 28, 2022, 1:33 PM UTC

oliwarner wrote: post #55

cammikebrown wrote: post #2

Seems like the bubble burst is going to be more sudden than we thought. 30 year mortgages are suddenly at nearly 5.5-6%, listings are sitting on the market for longer, and multiple cities are cracking down on Airbnb.

Whole-term-fixed rates are pretty uncommon in Europe. Fixes of 2, 5 sometimes 10 years are products most providers offer, but as the term increases, the rate shoots up, to offset rate uncertainty. My question is: why would you fix for 30yr when you know you're paying multiple points to offset market uncertainty? Remortgaging every couple of years takes a bit of time, and shopping around, but is much cheaper.

So I don’t get screwed when the rates go up. My current rate is 2.75% if I had to renew this year it could almost double. That could easily be $400-500+ a month. When the rates are low nothing can stop me from refinancing like I did a year+ ago from nearly 4%.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#245

Post by JohnWhigham » Thu, Apr 28, 2022, 1:35 PM UTC

_v7gu wrote: post #53

nikanj wrote: post #32

Earlier quoted context omitted.

If you plot Canadian housing supply vs Canadian city population growth, you get another perspective. Houses are incredibly expensive, because there aren't enough of them

No, no. It's the foreigners' fault. Hypocrisy and xenophobia will fix everything without having to create actually livable cities where people aren't slaves to cars.

You're living a very naive reality if you don't think foreign investors buying properties that sit vacant 11 months out of the year contributes to the housing problem.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#246

Post by tannedNerd » Thu, Apr 28, 2022, 1:38 PM UTC

afavour wrote: post #223

gadflyinyoureye wrote: post #206

I use to be a shareholder of Rocket. Then I tried to get a mortgage with them. I'm self-employed. I make about 200k/year. I had 0 debt (I paid off my house the prior year). I had 20% for up to 350k. I had an 812 credit score. When I applied they asked for my P&R statements for 2 years. The current year showed a $400 deficit (which was due to charitable giving). They said that I was losing money.Therefore I was too gr…

It’s not rare for large volume companies like this to fail on edge cases. I’m sure they have an algorithm to calculate rates and risk and there was little anyone could do to change the output. I imagine it wasn’t designed with the self employed as a high priority. I’m not convinced any of that means they are destined to fail.

Eh I would agree with OC. If they got flagged up on something as small as that they are going to take a massive hit when the applications really dry up later this year. That means 1 of 2 things will happen. They will decide to massively swing towards the other direction panicking and taking on loans they never should have aka 2008. 2) They keep losing out activity and market share decreasing their stock price to a point well below where she/he bought making it a bad investment currently. Neither looks great from an investors stand point.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#247

Post by smugma » Thu, Apr 28, 2022, 1:38 PM UTC

Beldin wrote: post #129

hans1729 wrote: post #118

Earlier quoted context omitted.

> Going into debt at the lowest interest rate you'll ever be offered to buy a leveraged asset that's likely to increase in price and reduce the overhead you pay on your largest expense, housing, and hedge against the risk of rent increases and security against the whims of landlords? Look, if I had enough money around, I'd maybe consider the gamble. But I don't want to buy property to sell it later, I just want to li…

Around here, monthly rent is as high as or higher than mortgage payments. With mortgage payments, you accrue ownership (for the "standard" mortgages around here). If you expect house prices to remain stable or increase during your residency in a property, ownership financially makes more sense.

Most places in the US, a mortgage from 5-10+ years ago will be less than renting an equivalent place, but a recent mortgage will be higher because prices have gone up so much.

This is generally true because prices generally go up. My brother almost bought a $200K condo in SF 30 years ago but it was slightly out of reach on his $60K Sun micro income, and his $500 room for rent was cheaper. The condo has gone up about 8X and rent (assuming market rate, it was under rent control) 5X. So as expensive as it is to rent in SF, it’s relatively more expensive to buy. It’s unknown if that trend will continue. It doesn’t seem rational but the city seems intent on continuing to severely restrict supply.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#248

Post by [deleted] » Thu, Apr 28, 2022, 1:38 PM UTC

chad_c wrote: post #241

redshirtrob wrote: post #237

Has anyone actually used Rocket? Every time I (or a friend) have looked at them they have higher closing costs and wanted multiple points to close the mortgage. I was able to do way, way better by going with a local bank, as did my friends. The only thing I can figure is they are better for folks with "good" (not "excellent") credit and can maybe close the loan faster.

I refinanced with them 2 years ago; they beat my local credit union and several banks at the time. Closing costs were competitive and extremely easy to schedule -- they sent an attorney to my home.

[deleted]

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#249

Post by tannedNerd » Thu, Apr 28, 2022, 1:39 PM UTC

sokoloff wrote: post #240

afavour wrote: post #223

Earlier quoted context omitted.

It’s not rare for large volume companies like this to fail on edge cases. I’m sure they have an algorithm to calculate rates and risk and there was little anyone could do to change the output. I imagine it wasn’t designed with the self employed as a high priority. I’m not convinced any of that means they are destined to fail.

Exactly. If I had a choice to invest at arms-length at a company who had good underwriting standards but loaned only based on liquid assets and W-2 income or in a company who very carefully underwrote loans by looking in careful detail at every applicants’ unique situation, I’m more inclined to invest in the former.

And now your company you invested is worth half because they were too strict on loaning and have entered the death spiral where they aren’t bringing enough new loans in and fold or get bought out for much less then your original stock price.

Re: Rocket Mortgage to trim 8% of workforce as home-loan market shrinks

#250

Post by _fat_santa » Thu, Apr 28, 2022, 1:39 PM UTC

geoduck14 wrote: post #169

tzs wrote: post #148

Earlier quoted context omitted.

> that people were given loans they should either never have gotten (2008) or that they shouldn't have asked for I bought my house in early 2007 and mortgages were indeed crazy back then. My analysis said that at the mortgage rates for a 30 year fixed mortgage back then (a tad over 6%) said that my ideal home financially would be around $H or less, that I could go up to 1.25 $H without house payments being high enoug…

I'd like to provide some context around the approved amount. Countrywide (and other originators) get their rates from Fannie Mae and Freddie Mac. These two have guidelines set to approve X monthly payment based on your income (for instance, you can spend 28% of your income on your primary house). These guidelines are set for BROAD populations - specifically very poor and "normal" people have the same guidelines. For…

> But we don't want a big fat house, we try and buy a normal house, but we really want it so we pay "just a little more than it is actually worth" and drive the price up "just a little".

The problem here is really with the supply of homes. If there was a good supply, issues like this would never arise, or would rarely arise, because there is always a house just as good down the street that you don't have to overpay for.

Part of the problem is the supply chain but I bet alot can be done by the govt to get out of the way. Of course the other side of the coin is activists that scream both: "We need more housing" and "how dare you build more housing" in the same sentence.