The Mortgage Market Is So Bad Lenders Want Ex-Employees to Give Back Their Bonuses (legal, poll)
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David Siegel went to work for an affiliate of Guaranteed Rate in 2021 and got a signing bonus of more than $100,000. Interest rates were super low, and mortgage bankers were raking in cash.
Now that business has dried up, the mortgage company wants its money back. He said it fired him one month shy of the date when it could no longer ask for the bonus back, then demanded the money. Guaranteed Rate and its affiliates are also telling hundreds of other former employees that they have to return their signing bonuses, people familiar with the matter said.
“It seems like they realize they aren’t making money in their mortgage business, so the way to get income is to claw back the payments,” said Siegel, who is based in New Jersey.
Guaranteed Rate wouldn’t comment on individual employees. But its general counsel, Anwar Shatat, said, “We are not going to be apologetic about exercising our legal rights to recover our money.”
... “I’ve been in this business 40 years and I don’t remember a correction like this,” said David Stevens, a former housing-finance regulator who now consults for the industry.
Mortgage application activity is now at its lowest level in nearly 30 years, according to the MBA.
Op-Eds are fun. But the thing about Op-Eds are they are merely the opinions of the author. And it's pretty darn easy to find something negative on the internet when the real world numbers don't match up with reality and one needs to try and validate their flawed beliefs.
For those of us that simply want to look at raw data and come to our own conclusions, we know that the current home ownership rate is just under 66%, so that would qualify as the vast majority of the country. Many of those home have fixed mortgage rates and were acquired at the historical low interest rates that were available over the last decade, so most aren't too worried about the current rate. In addition, home prices over the last few years have appreciated upwards of 60%, improving these home owners net worth (and certainly giving them more options than what was currently available previously). But I digress....carry on with the black cloud scenario.
For those of us that simply want to look at raw data and come to our own conclusions, we know that the current home ownership rate is just under 66%, so that would qualify as the vast majority of the country. Many of those home have fixed mortgage rates and were acquired at the historical low interest rates that were available over the last decade, so most aren't too worried about the current rate. In addition, home prices over the last few years have appreciated upwards of 60%, improving these home owners net worth (and certainly giving them more option than what was currently available previously). But I digress....carry on with the black cloud scenario.
I have to disagree with the bolded. While the high rates of today don't impact those with fixed rates of years back, but in the real world, there are life changes and the needs of homeowners change over time. Many are 'stuck', so to speak, because if they sell and they need to finance a their new home, it's basically become unattainable due to 30 year rates touching 8% today.
So this puts added pressure on the supply in many markets. People that are trapped with their low rate locked in, are very reluctant to even consider making a move.
“I’ve been in this business 40 years and I don’t remember a correction like this,” said David Stevens, a former housing-finance regulator who now consults for the industry.
Well - that's because we never had a government screw around in the mortgage business as they have for the last few decades.
“I’ve been in this business 40 years and I don’t remember a correction like this,” said David Stevens, a former housing-finance regulator who now consults for the industry.
Well - that's because we never had a government screw around in the mortgage business as they have for the last few decades.
From "free market" and "let the chips fall where they may" to this.
I have to disagree with the bolded. While the high rates of today don't impact those with fixed rates of years back, but in the real world, there are life changes and the needs of homeowners change over time. Many are 'stuck', so to speak, because if they sell and they need to finance a their new home, it's basically become unattainable due to 30 year rates touching 8% today.
So this puts added pressure on the supply in many markets. People that are trapped with their low rate locked in, are very reluctant to even consider making a move.
You're welcome to disagree all you want. But the numbers are the numbers.
I'd try not to. But a contract is a contract, so I may be forced to return it.
Bummer, for those involved. My stepdaughter is a well established mortgage broker in the Memphis area. She just sailed through the 08 crisis because her area was hot. But now.... She has never seen it like this. Prices on high-end property are falling. Recovery from loss may take many years for those who bought in the last two years.
All the fed is doing is postponing the pain. Probably until everyone involved retires.
From your link...
The goal of the program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets. Purchases of these securities began on January 5, 2009.
What is actually provided support for was the economy during the early days of Obama presidency.
Because otherwise, the economy would have been in the tank for a lot longer.
You disagree with what I posted? That homeowners locked in with low rates are reluctant to even consider a move due to high rates? This is happening.
No question about it. Unless I was moving out of state I would not even consider selling my house at this stage as it's long paid off, and both prices and mortgage rates are much higher than in the past.
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