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Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

cnbc.com

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Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#61

Post by Supermancho »

blacksqr wrote: post #36
jmyeet wrote: post #16

It's unsurprising mortgage volume is down given economic uncertainty and the spiking interest rates. As such, layoffs at mortgage originators seem inevitable. But here's the lesson I want people to take from this: both Demorats and Republicans are cut from the same neoliberal cloth in that they both serve corporate interests. What do I mean by this? Neither pushes back on the idea that interest rates are the only way…

A corporate tax increase was just passed in August.

> The Inflation Reduction Act imposes a corporate alternative minimum tax equal to the excess of 15% of a corporation's adjusted financial statement income (AFSI) over its corporate alternative minimum tax foreign tax credit.

This is not an impactful tax for any of the affected corporations. They will simply choose the method under which they pay the least and continue their tax avoidance through declared max depreciation et al, as normal. This is the USA and billionaires aren't to be inconvenienced by public policy.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#62

Post by majormajor »

It's not clear to me from the article if that 90% down number includes refinances.

It says that the effects are "particularly [pressuring] firms like Rocket Mortgage that thrived on loan refinancings" but I don't know if it's reading in too much to assume that the WF pipeline it's talking about is including both.

(If it includes refis that's still bad news for the mortgage interest but way less indicative of soon-to-fall prices since rates have generally been below the current point for about 20 years, so no small wonder nobody would refi now.)

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#63

Post by lotsofpulp »

tinnou wrote: post #59
andromeda-brain wrote: post #54

Earlier quoted context omitted.

Would you be willing to share a specific property as an example?

Zillow: https://www.zillow.com/homedetails/1488-Sunland-Ct-San-Jose-... Redfin: https://www.redfin.com/CA/San-Jose/1488-Sunland-Ct-95130/hom... The history between May and August was deleted on Redfin. Either there is a way to pay Redfin to delete history or @lotsofpulp is right, or maybe a convenient bug?

This one is missing the initial list price from July:

https://redf.in/sITdQm

https://www.zillow.com/homedetails/26-Pinewood-Ct-San-Mateo-...

This one has a listing from Jan 2022 that is missing in Redfin, but shown in Zillow:

https://redf.in/hX47mx

https://www.zillow.com/homedetails/4922-Leigh-Ave-San-Jose-C...

I cannot tell if this is intentional or not, but in all cases, Zillow has shown more data than Redfin.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#64

Post by type-r »

Test0129 wrote: post #49
bequanna wrote: post #43

Earlier quoted context omitted.

> House prices are set at the margins, just like any asset. Even if the folks with 3% mortgage rates sit tight and don’t sell, there will still be downward pressure on prices because prices are not determined by non-transactions. YES! There is a sort of delusion that has taken hold of people who became “house rich” in the past couple years. They seem to think that if they don’t sell, their house will still be worth w…

Similarly, the delusion of the "house poor" hoping for another 2008 is frankly hilarious. The difference is, if you picked up a house at 2.7% you will be winning for a long time. There are fewer ARMs, which means a small more protracted "collapse". Housing supply is still non-existent and will be into the near future. Wages will need to keep pace with housing costs in order to provide anyone a chance to succeed. Even…

Wages haven't kept up with housing costs for quite a while, not sure why they would start now.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#65

Post by dboreham »

rayiner wrote: post #41
ISL wrote: post #30

Earlier quoted context omitted.

This idea was entirely new to me. Here's the top Google result on the subject: https://abovethelaw.com/2021/05/will-we-soon-see-an-american...

Legal ethics rules in the US preclude a non-lawyer from controlling or supervising the legal judgment of a lawyer, which makes the notion of non-lawyer shareholders problematic.

Something similar pertains to organizations providing medical services. Must be run by an MD.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#66

Post by nostrademons »

vinyl7 wrote: post #26
jjcon wrote: post #24

Earlier quoted context omitted.

3 cherry picked cities in the USA? Here is a better source that is national (USA): https://fred.stlouisfed.org/series/ACTLISCOUUS Listings are still very low compared to pre-pandemic levels not to mention by many metrics there was already a shortage before the pandemic stemming all the way back to the great recession. Some interesting reading: https://usafacts.org/articles/population-growth-has-outpaced... https://ww…

We're really only a month into the new rates. People who locked in at the sub 6% interest rates were still closing in October. Either we see a dramatic drop in prices or inventory will surge. Housing affordability has been demolished with these higher interest rates, so sales will drop off a cliff as we're already seeing with mortgage companies doing mass layoffs.

Likely people will take their houses off the market and rent them out. With mortgage rates going up and liquidity drying up, a lot of prospective buyers are deciding they're going to sit tight in a rental. That puts upward pressure on rents and gives an incentive for sellers whose desired price can't be met with the new rates to just sit tight and collect rental income.

Same thing happened when buyers disappeared in 2020 - most of the more marginal homes just got taken off the market, and either rented for a year or given a fresh coat of paint and some renovations to sell for a few hundred K higher in 2021.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#67

Post by lotsofpulp »

dboreham wrote: post #65
rayiner wrote: post #41

Earlier quoted context omitted.

Legal ethics rules in the US preclude a non-lawyer from controlling or supervising the legal judgment of a lawyer, which makes the notion of non-lawyer shareholders problematic.

Something similar pertains to organizations providing medical services. Must be run by an MD.

In the US, it is the opposite, since doctors are generally prohibited from owning hospitals.

https://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfRe...

And buying healthcare provider groups has been very popular with private equity in the past decade, there is no requirement for owners to be doctors.

https://www.bloomberg.com/news/features/2020-05-20/private-e...

https://www.ineteconomics.org/perspectives/blog/er-doctor-pr...

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#68

Post by jmyeet »

Supermancho wrote: post #61
blacksqr wrote: post #36

Earlier quoted context omitted.

A corporate tax increase was just passed in August.

> The Inflation Reduction Act imposes a corporate alternative minimum tax equal to the excess of 15% of a corporation's adjusted financial statement income (AFSI) over its corporate alternative minimum tax foreign tax credit. This is not an impactful tax for any of the affected corporations. They will simply choose the method under which they pay the least and continue their tax avoidance through declared max depreci…

The IRA was a fairly tepid bill (eg the cheaper medicines were very limited in scope and don't come into effect for several years) but the 15% minimum corporate tax rate was one of the less talked about but more impactful measures.

How do I know this? Because of all the resistance that particular measure got from many lawmakers.

So why is that impactful with the corporate tax being lowered to 21% in the Trump administration? 15% is less than 21% so it shouldn't matter right? But it does because the 2017 tax cuts effectively (in a complicated fashion) mostly gave a permanent amnesty on offshored profits. Previously, any repatriated profits were subject to the (then) 35% corporate tax rate. That bill ended that treatment. The replacement was more complicated and a much lower effeective tax rate.

So the 15% minimum actually hits companies who are currently paying less than that on foreign income. It's a good measure.

My comment however was referring to far stronger and likely temporarly measures, such as a windfall corporate tax of, say, 60% (or even higher).

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#69

Post by forgingahead »

fratlas wrote: post #57
Test0129 wrote: post #49

Earlier quoted context omitted.

Similarly, the delusion of the "house poor" hoping for another 2008 is frankly hilarious. The difference is, if you picked up a house at 2.7% you will be winning for a long time. There are fewer ARMs, which means a small more protracted "collapse". Housing supply is still non-existent and will be into the near future. Wages will need to keep pace with housing costs in order to provide anyone a chance to succeed. Even…

> you lost out on a literal once in a lifetime opportunity I don't think anyone can make claims like this, lots of people made the right decision by not buying into an inflated market with job instability around the corner. I think the correction is needed, any people who didn't overextend will be fine if they intend to stay put for 5-15 years.

Yeah this the thing - somehow those of us who chose not to over-extend in times of exuberance are the ones who lost out? I've been renting for a long time, but my market still doesn't let me buy a home that I could live in with my family for an amount that won't make me lose sleep when rates go up (like everywhere outside the US, most mortgages are ARMs here). Like many of this board, I'm in the upper-echelon of earners in my location, but I refuse to over-extend on a housing loan like many folks in my location.

The only difference is that recently I've resigned myself to the fact that maybe I'll never own in my current location - which even though may be emotionally sad, at least I don't have a crazy monthly payment for a shoebox apartment.

Re: Wells Fargo mortgage staff brace for layoffs as U.S. loan volumes collapse

#70

Post by faangiq »

blindriver wrote: post #7

So far the mortgage rates skyrocketing corresponds to an equivalent mortgage that is about 35% lower. Meaning that if you could previously afford a $1 million mortgage, you can now only afford about a $650,000 mortgage with the same payment. If you don't see a corresponding price drop of 35% then it might be too early.

Of course, such a drop vaporizes every institutional investor in the world. So …
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