Let's Talk Loans - Vol. 2

The response from week 1 has been outstanding. Thank you! Please subscribe and if you know of a peer that might enjoy this content, please recommend. Again, the goal being to summarize the weeks talking points on what's trading or trending in whole loans. Could be the residential mortgage market, commercial mortgage market, consumer lending market or other balance sheet / credit issues facing depositories (and consumers) today. I hope you find these discussions helpful to your day to day lending and trading practices. I certainly welcome any feedback or contributions!

1) The return of the MBA's Secondary & Capital Markets Conference! I will be presenting and attending the conference in NYC on May 15th - May 18th. A very timely discussion (3pm est Tuesday) on "What's New in Non-Agency Lending" and joined by Moody's, Oceanview Mortgage and Deephaven Mortgage - you'll have a great panel of industry leaders in their field. As lenders are struggling to shift to a purchase money residential market we will tackle various ARM products and Non QM lending products being originated and traded in the secondary market today. If you plan to attend the conference, please reach out at [email protected]. I would very much like to connect in person! Follow the link to the conference here.

2) It has been a brutal few weeks for layoffs in mortgage land. As forecasts are revised down, lenders focus more on purchase money lending and the refi business starts to dry up - the layoffs are coming fast and furious. Follow the link to the discussion here.

3) A surprise miss on this quarter on GDP. Economists were forecasting a 1% increase to annualized QoQ GDP but the results came in at a negative 1.4%. Thoughtful comments from the Economist "that is misleading because it is more a reflection of strong imports and shifting inventory levels than of a sudden slowdown. Underlying demand is strong—personal consumption rose by 2.7% in the first three months of 2022—and most analysts are predicting growth for the full year". However, certain states have been winners or losers in this recovery. Tourism and travel has been a foe (Hawaii) and a friend (Florida) to some states. Industry has been a foe (Wyoming / Louisiana - oil and gas / agriculture). Americans "could choose to move to places with lower taxes, warmer climes or more affordable housing - or all three!" Follow the link to join the discussion here.

4) Credit provisions for depositories in Q1 were a mixed bag. As we look back over the quarter, we no longer see the trend of significant and consistent releases of reserves. Inflation, Ukraine but also some calls for a recession are causing concerns and additions to growing provisions. "Out of 22 U.S. banks with more than $50 billion in total assets that reported first-quarter earnings through April 22, 16 logged positive provisioning, according to S&P. 15 out of 30 banks with total assets between $10 billion and $50 billion that reported earnings through April 22 reported positive provisions. Meanwhile, 13 booked negative provisions and two logged zero provisions". Follow the link to the discussion here. A reminder, we offer a solution for the coming CECL FASB for both loans and bonds.

5) Student lending. Candidate Biden promised on the campaign trail some sort of forgiveness to student debt. Would it be $50k? $10k? Some see the window closing and are indicating President Biden is moving closer to executive action to forgive student debt. There is some debate as to the legal authority of the President to do so and few believe he has the votes in congress to get it to pass. Follow the link to the discussion here.

#mortgage #banks #creditunions #studentlending #markets #economy #housing #mbasecondary22 4717822