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

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

#461

Post by kelnos »

ak217 wrote: post #458
kelnos wrote: post #446

Earlier quoted context omitted.

Seems like most folks can barely avoid the monthly payment on a 30Y fixed; wouldn't 10Y being the norm just cause a lot of people to be unable to buy at all?

I don't know. The question is whether subsidizing 30Y mortgages (fannie mae/freddie mac/FHA/QE/standard terms enforced by law to enable refinancing, etc.) is the right policy in an open system where it has many major side effects, compared to other ways to adjust housing policy. For reference, Canada has no 30Y fixed mortgages - instead they have 5-10Y fixed terms and distinguish between prepayment for refinancing (e…

Rolling the mortgage into the new property seems interesting. From what I understand, this is very rare in US mortgages, right?

I do wonder, if we just had 10Y mortgages, would home prices just crash? People won't buy what they can't afford (I mean, sure, they do to some extent, but not if their monthly payment would double), so sellers might just be forced to sell for less. The first "generation" of 10Y-only mortgages would be disastrous for current owners, as their existing 30Y mortgages would be underwater. Or maybe people just would stop moving...

I just glanced at the article you linked, and realized I'd read it back when it was posted, and agreed with its conclusions. I just don't know what the solution is.

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

#462

Post by stevenhuang »

techsupporter wrote: post #455
stevenhuang wrote: post #441

Earlier quoted context omitted.

I didn't read it that way. Is HN a professional context? In this casual retelling I read it as a neutral noun describing gender. Substitute the equivalent here with 'guy' and we wouldn't be having this discussion. Thinking harder, I guess 'gal' would have been more appropriate. But in any case I feel this reveals more about the reader and their proclivity to engage in 'culture-war topics' than anything substantial.

> But in any case I feel this reveals more about the reader and their proclivity to engage in 'culture-war topics' than anything substantial. You are, of course, free to assign any motivation to me that you like. However I am on the older side and the only times I ever heard "girl" used were as a pronoun for a younger person or as a diminutive for a person seen as lesser than the speaker. For example, my older family…

Apologies.

Taking the poster's statement in isolation, interpreting it as a younger/diminutive person is a fair reading as well.

In this case, the full context is of a casual/informal retelling here on HN so it changes how it should be interpreted (or at least, put in consideration).

Plus he was complimenting her; makes the diminutive interpretation less likely.

All nitpicks in the end as result of lossy text comms over light, no big deal :)

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

#463

Post by IG_Semmelweiss »

celticninja wrote: post #137
lmt55 wrote: post #109

Earlier quoted context omitted.

I own a house in London. Its total value increase since I bought it 5 years ago is much less than my salary.

You bought near the peak of the market then. Definitely been some downward pressure on prices since covid as people sold up in London, took that premium price and moved to larger properties elsewhere. Not saying it was a bad investment, just that the return will take longer than it has in the past.

Isnt that exactly the scenario that op is describing?

Lack of flexibility at precisely the right time?

Owning in any large city + servicing debt during the pandemic when you must move elsewhwre that is sane (and less risky to your health) would seem to have a premium attached to it

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

#464

Post by ak217 »

kelnos wrote: post #461
ak217 wrote: post #458

Earlier quoted context omitted.

I don't know. The question is whether subsidizing 30Y mortgages (fannie mae/freddie mac/FHA/QE/standard terms enforced by law to enable refinancing, etc.) is the right policy in an open system where it has many major side effects, compared to other ways to adjust housing policy. For reference, Canada has no 30Y fixed mortgages - instead they have 5-10Y fixed terms and distinguish between prepayment for refinancing (e…

Rolling the mortgage into the new property seems interesting. From what I understand, this is very rare in US mortgages, right? I do wonder, if we just had 10Y mortgages, would home prices just crash? People won't buy what they can't afford (I mean, sure, they do to some extent, but not if their monthly payment would double), so sellers might just be forced to sell for less. The first "generation" of 10Y-only mortgag…

Right, US mortgages are not portable.

Going back to the Canadian mortgages, they have terms of 5-10 years but they can be amortized over up to 25 years. So their standard practice is effectively a balloon payment of up to 80% that is expected to be refinanced at rates in effect at the end of the term. This still financializes housing over up to 25 years (similar to the US) but without subsidizing the interest rate optionality.

In the US, balloon payments are heavily discouraged by federal regulation on what kinds of mortgages can be financially supported by the government.

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

#465

Post by lkxijlewlf »

They're not needed, right? Investors buying a larger share of homes, so you wouldn't need as many mortgage brokers, right? Also, some developers are simply building homes to go straight to rental property. They wouldn't need Rocket mortgage to be involved.

I don't think this is a sign of a bubble bursting but more of a sign that unless you currently own and can hang onto it, you'll be a renter soon no matter your status.

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

#466

Post by acjohnson55 »

MarketingJason wrote: post #317

Just closed financing on a home. Rocket had a comparable rate but the real no-go for us was their very-limited rate-lock option. With interest rate trends what they are right now, we really needed a 200 day + rate lock with a float-down in case things changed. Other lenders (builder, ownup options, local banks) offered those and the option to buy points and apply them if we were able to float down. Rocket seemed very…

Yeah, non-bank lenders are generally not going to offer locks nearly that long. It's very costly for the lender or the mortgage investor to hedge against interest rate volatility for that long.

Banks often consider mortgages to be a loss leader to acquire customers for other services. They often don't have the best rates when rates are low, but they might have other perks like custom loan programs and longer locks.

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

#467

Post by mbesto »

bilbo0s wrote: post #360
halfmatthalfcat wrote: post #345

Earlier quoted context omitted.

I thought it was IL that had a net loss but afaik Chicago had a net gain.

Yeah, commenter definitely conflated Illinois with Chicago. I would not classify Chicago as anything close to an "affordable" housing market. Probably a toss up whether the least affordable area in the midwest to median income earners is Chicago or Minneapolis? Either area, you will be paying through the nose compared to, say, here in Wisconsin.

Depends on how you scope it:

Overall, the city’s population grew nearly 2% from 2010 to 2020 — from 2.6 million residents to 2.7 million, according to data released from the 2020 census. That’s a change from the population decline the city had experienced from 2000 to 2010, when the city lost nearly 7% of its population.

https://chicago.suntimes.com/2021/8/12/22622062/chicago-cens...

But I think its fair to say that growth is generally pretty stagnant especially when you consider there are places across the country that aren't name NY or LA, that are absolutely booming (Denver, Dallas, Houston, Austin, Portland, Miami, Seattle, etc.)

> Probably a toss up whether the least affordable area in the midwest to median income earners is Chicago or Minneapolis? Either area, you will be paying through the nose compared to, say, here in Wisconsin.

This is true, but purchasing property in Chicago is relatively affordable if you compare against other major metros.

The point is this - housing prices in Chicago are somewhat stagnant by simple supply and demand laws, where the demand is not nearly what other major metros are experiencing in the country. This is good for buyers and bad for sellers. If chi/IL gov't stays the same, I don't expect anyone buying now will be in a sellers market anytime soon.

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

#468

Post by rurp »

MikePlacid wrote: post #388
jetti wrote: post #83

I imagine that Rocket increased their workforce by more than 8% between spring of 2020 and now. I work for a mortgage company and layoffs have happened multiple times this year. With rates so low for almost two years the volume increased significantly. In order to deal with that volume the company most certainly had to hire many people and quick. The market conditions can't support keeping those individuals (or at le…

How this downsizing looks from a client's point of view: I have almost finished a 4 months long process of buying a summer house (including one failed deal), and my first financial agent - a very bright and fast girl - was fired right in the middle of my first transaction... and nobody told me a word about it - neither the manager, not the new agent, so I was sitting in the dark for a week or so. The agent that I got…

I tried using Rocket last year for a mortgage and had a similar experience, aside from starting with a helpful employee. The folks I tried to work with were unresponsive and extremely unhelpful.

One thing that blew my mind was how terrible most mortgage companies I contacted are. I lost count of how many places I contacted that were slow and unhelpful about everything, and it kind of blew my mind. I was reaching out to companies offering them thousands of dollars in business and the usual response was "meh". There must be some pretty large moats in this industry because most shops are clearly not competing on competence or customer service.

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

#469

Post by kelnos »

ak217 wrote: post #464
kelnos wrote: post #461

Earlier quoted context omitted.

Rolling the mortgage into the new property seems interesting. From what I understand, this is very rare in US mortgages, right? I do wonder, if we just had 10Y mortgages, would home prices just crash? People won't buy what they can't afford (I mean, sure, they do to some extent, but not if their monthly payment would double), so sellers might just be forced to sell for less. The first "generation" of 10Y-only mortgag…

Right, US mortgages are not portable. Going back to the Canadian mortgages, they have terms of 5-10 years but they can be amortized over up to 25 years. So their standard practice is effectively a balloon payment of up to 80% that is expected to be refinanced at rates in effect at the end of the term. This still financializes housing over up to 25 years (similar to the US) but without subsidizing the interest rate op…

Ah, that makes a lot of sense. So the monthly payments are still affordable, and people mostly avoid the balloon-like payments by refinancing.

The downside (for the borrower, anyway), of course, is that if you do live in the same house long-term, you'll have more-frequent forced refinancing events that might result in an unfavorable interest rate. But that otherwise seems pretty reasonable, and arguably (as the article you linked points out), the ability to "lock" your interest rate for such a long time isn't great for the market.

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

#470

Post by acjohnson55 »

dodgerdan wrote: post #100

Rocket Mortgage has a pretty modern stack, and they make good use of third party API’s to aid their processing. There’s an entire fintech ecosystem that are providers for mortgage providers like Rocket Mortgage that could be impacted if this turns into a trend.

That ecosystem is already being impacted. Blend is one of the more cutting edge service providers and their stock has been in freefall since IPO in July last year. I believe they bill on a per-loan basis, so they rise and fall with the mortgage industry.

https://finance.yahoo.com/quote/BLND/

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