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

#471

Post by acjohnson55 » Thu, Apr 28, 2022, 9:26 PM UTC

hnuser847 wrote: post #312

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…

Rocket mortgage is a Fannie/Freddie mortgage mill. If the mortgage doesn't tick all the conventional mortgage boxes and can't be instantly sold the government, they won't write it. You're much better off working with local banks or credit unions, who may be willing to keep the loan on their books.

^ This.

They should have been honest with OP about what the limitations are. Conforming loans (i.e. Fannie & Freddie) are notoriously tricky for self-employed borrowers. Salespeople gonna salesperson, though.

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

#472

Post by wombatpm » Thu, Apr 28, 2022, 9:29 PM UTC

kelnos wrote: post #431

DamnYuppie wrote: post #425

Earlier quoted context omitted.

I have seen AirBnB referenced many times in these comments as having something to do with the increase in home prices. From what I can find there are 660,000 AirBnB hosts in the US; this was found under the Airbnb Statistics by Region section from here https://www.stratosjets.com/blog/airbnb-statistics/ seems to also be found here https://ipropertymanagement.com/research/airbnb-statistics . Most likely both of those…

Just wanted to point out that the article you reference says 660k listings in the US, not hosts . I was initially concerned by your wording that the number of properties for rent on Airbnb was much higher (since often hosts have multiple properties, or the host is listed as a management company), but it does seem that 660k is the number of listings. And I agree with you that number is much lower than I would have exp…

Did that actually work or did foreign buyers create local LLC’s to purchase property instead and now you just sell the LLC and avoid the property changing ownership

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

#473

Post by acjohnson55 » Thu, Apr 28, 2022, 9:35 PM UTC

I'm kinda surprised to see so much commentary on this. A lot of folks on here deeply misunderstand this industry, which is understandable, but there's a lot of very strident and incorrect opinion.

Simply put, one of the biggest mortgage booms in history just came to an end. Rates were at all-time lows. That meant an unbelievable boom in demand for mortgage refis.

Then when the Fed started taking inflation seriously, mortgage rates (which tend to track 2-3% above 10-year treasury yields) skyrocketed to 10-year highs. This means that very few people are in a position to benefit from a refi, and that business is pretty much dried up. The refi business is the specialty of Rocket Mortgage and other online lenders.

There is tremendous demand for housing right now, due to millenials being homebuying age and housing preferences changing with the pandemic. However, supply is tightly constrained. Boomers are aging in-place, home builders aren't completing homes due to building supply and labor disruption, investors are buying properties (smaller effect than people claim), and sellers don't want to sell without a home to buy. So for-sale inventory is at all time lows. This means less demand for purchase money mortgages, the main other product of a mortgage bank.

Mortgage lending is notoriously labor intensive. Nearly every lender, like Rocket, staffed up huge to meet the demand of the refi boom. Now, nearly every lender finds itself overstaffed for a mortgage market bust. Hence, layoffs. Every lender from the largest (Rocket) to the smallest is impacted.

This is just how the mortgage industry works, though. It is both seasonal and dependent on the economic cycle.

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

#474

Post by ak217 » Thu, Apr 28, 2022, 9:37 PM UTC

throw8383833jj wrote: post #415

ClumsyPilot wrote: post #382

Earlier quoted context omitted.

> house ownership is just a legal construct Stange argument, all rights are legal contructs - how do I know my employer will pay me for work done, or my neighbour won't rob be in my sleep and slit my neck? If we don't trust legal constructs, we can't have a civilisation.

You can trust them, that's not the point. the point is, you can keep your pen or your calculator without having to pay rent on them. You can't keep your land/house unless you pay rent on it to the govt. Considering that all humans require shelter to continue living (surprising: the homeless in the US die 30 yrs younger than the average), a case can be made that property taxes for a minimum amount of land necessary to…

That case doesn't work because the property taxes mostly fund essential local services that are also necessary to live and have a functioning society - there are many locales in the US where the property taxes are zero but there are no improvements or people around you.

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

#475

Post by kelnos » Thu, Apr 28, 2022, 9:47 PM UTC

wombatpm wrote: post #472

kelnos wrote: post #431

Earlier quoted context omitted.

Just wanted to point out that the article you reference says 660k listings in the US, not hosts . I was initially concerned by your wording that the number of properties for rent on Airbnb was much higher (since often hosts have multiple properties, or the host is listed as a management company), but it does seem that 660k is the number of listings. And I agree with you that number is much lower than I would have exp…

Did that actually work or did foreign buyers create local LLC’s to purchase property instead and now you just sell the LLC and avoid the property changing ownership

Not sure, but I would hope the local governments thought of this and protect against it. But they're governments, so who knows.

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

#476

Post by kelnos » Thu, Apr 28, 2022, 9:49 PM UTC

whimsicalism wrote: post #451

kelnos wrote: post #427

Earlier quoted context omitted.

It's somewhat fashionable for well-off people/families to have a vacation home somewhere vacation-y. Before Airbnb, most of those homes just sat vacant for most of the year[0]. Clearly, that's not a great use of that land. Often these sorts of properties would be in pretty desirable locations, and doing it this way would deprive most people the use of that space. Certainly there are still some people who are wealthy…

> Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. You are missing a critical issue. Airbnb makes it way more affordable to have this second home,…

I'm not missing it so much as I'm ignoring it, I guess.

While this phenomenon is bad for people looking for long-term primary homes, it is nice to be able to afford a vacation home when you couldn't before. Certainly I would prioritize locals over non-locals looking for a second home, but can't we have both? Build more.

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

#477

Post by throwaheyy » Thu, Apr 28, 2022, 9:55 PM UTC

darrenf wrote: post #445

throwaheyy wrote: post #418

Earlier quoted context omitted.

Do you pay council rates? That’s what are called property taxes in the USA.

Ah yes, there’s council tax - but tenants pay that too, so it’s not a difference between the scenarios. Also I wouldn’t want or expect to stop contributing to local services just because I don’t have a mortgage!

Tenants in the USA do not pay it directly but do so effectively by proxy, because they pay rent to the landlord and the landlord pays property taxes to local government.

Property taxes in the USA go towards local government services like garbage collection and street maintenance, just like council rates. So I believe property tax and council rates are still analogous.

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

#478

Post by cascom » Thu, Apr 28, 2022, 10:04 PM UTC

SilasX wrote: post #190

cascom wrote: post #122

Earlier quoted context omitted.

Except no bank (at least in the us) will cut that deal, because they don’t mark those loans to market.

Yeah, that was my reaction too. But ... why not? It still seems possible. I mean, between banks they definitely have to mark it to market in order to sell the mortgage, so they would take a big hit to sell when interest rates go up. So, why can't you put on a funny hat and glasses, get a new mortgage at the higher rate, and then go buy your existing one at a discount?

If you’re “trading” the mortgage, you mark to market, but if you hold it for investment then you don’t (this is driven by bank capital requirements - if I need to go raise capital every time interest rates went up that would create huge problems (despite the credit staying the same (if not improving))

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

#479

Post by syntheticcorp » Thu, Apr 28, 2022, 10:08 PM UTC

onlyrealcuzzo wrote: post #255

llampx wrote: post #152

Earlier quoted context omitted.

No Income, No Job anything?

I would hope if you have no income you don't have a job!

I suppose you could have income from interest on capital or stock dividends

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

#480

Post by whimsicalism » Thu, Apr 28, 2022, 10:10 PM UTC

kelnos wrote: post #476

whimsicalism wrote: post #451

Earlier quoted context omitted.

> Certainly there are still some people who are wealthy enough to keep their vacation homes vacant most of the time (and prefer it that way, since doing short-term rentals tends to involve quite a bit of wear-and-tear on a house and its furnishings). But many list on Airbnb now. I consider this a net positive for society. You are missing a critical issue. Airbnb makes it way more affordable to have this second home,…

I'm not missing it so much as I'm ignoring it, I guess. While this phenomenon is bad for people looking for long-term primary homes, it is nice to be able to afford a vacation home when you couldn't before. Certainly I would prioritize locals over non-locals looking for a second home, but can't we have both? Build more.

I agree, build more - but given that we are not currently doing it, AirBnB is only making this situation worse.

The market doesn't care whether someone is buying a vacation home or buying the only home that lets them stay in the region. It is the responsibility of the state to put its thumb on the scale in favor of positive externalities that the market is agnostic between.