re: It's Official - The Federal Reserve Raises Rate 1/4 Point (Discussion Thread)

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using the same underwriting standards

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When did I ever say this?

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When did I ever say this?

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You have repeatedly disputed my statement that mortgage loans are generally more difficult to get now than they were before the financial crisis because lenders have tightened their lending criteria.

You now say you work at a mortgage lender so putting your statements together I concluded your company has not changed its underwriting standards if it continues to make all of the same loans it made before the crisis.

If your company has made its underwriting standards more strict then you are reinforcing what I've been saying in this thread.

So, which is it?

Not true. While the fed funds rate has been lifted, the 10 year rate could effectively now fall if it sees an influx of foreign sovereign debt inflows. Which would flatten the yield curve. Those rates don't always correlate.

There is absolutely no doubt. There are TONS of regulations on mortgage lenders buried within the Dodd-Frank Act, which have been conveniently been put into the marketplace piece by piece and rule by rule.

A couple of good examples are the Qualified Mortgage provisions commonly referred to as 'Ability to Repay' rules by the CFPB which require strict underwriting standards on lenders who wish to sell their mortgages on the secondary market to Fannie or Freddie.

Then you combine that with the new settlement procedures held within TRID and the restrictions placed on both lenders and title companies who are all critical pieces in the mortgage lending process.

OH

and Dodd-Frank has also placed restrictions on the earnings and compensation of mortgage brokers which takes away the incentives of the mortgage broker to stick their neck out and offer riskier loans

AND FINALLY

the result is that the big banks are gaining more power every day and there are less and less options for the consumer to shop for a loan. therefore, the restriction in options (see: open markets) decreases competition and therefore mortgage applications are DOWN and mortgage rates will continue to trend UP

When there are less FDIC chartered banks now than in the late 1800s - that should really tell you something

The Fed Rates have a little to do with the overall rate structure, but the mortgage world has a ton of implicating factors these days which go far beyond the Central Bank and the Fed Funds Rate

Forward

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There is absolutely no doubt. There are TONS of regulations on mortgage lenders buried within the Dodd-Frank Act, which have been conveniently been put into the marketplace piece by piece and rule by rule.

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Oh, no, we are wrong. Wutang works for a mortgage lender and his company makes loans which the borrower has no chance of repaying.

I wonder if his bosses know he is publicly admitting his company is willfully violating Dodd-Frank and its ensuing regulations??

How does that not make sense??

Most of Europe is in negative rate territory, why would Germany or the likes invest its sovereign money in a negative yield where they could put it in a AAA rated us treasury with a positive yield? if we see that happening then basic economics tells you the yield will fall bc of demand, we saw this happen late last year when the 10 yr flirted going under 2%.

This will in turn strengthen the dollar even more so compared to the Euro. Yellen talked about this being a major concern the last few meetings.

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How does that not make sense??

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why would Germany or the likes invest its sovereign money in a negative yield where they could put it in a AAA rated us treasury with a positive yield?

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That's how....



Seriously, I have no idea what you're trying to say and I'm pretty sure you don't either.

Germany's government does not issue Bundesanleihen only to arbitrage the proceeds from them using another country's debt issues. ETA: Besides, Germany's sovereign debt issues, Bunds, are not denominated in U.S. dollars. They are denominated in euros.

If you're trying to say European banks might be buying U.S government bonds as an alternative to buying European issued securities, then okay, that's a possibility. But those are NOT sovereign entities buying U.S. bonds. Those entities are private, not sovereign.

What is your finance/economics background?

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When there are less FDIC chartered banks now than in the late 1800s - that should really tell you something

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Yet another field that I'm aware of that Federal "Consumer Protection" regulations have led to increased costs that have pushed out smaller operations and stymied competition.

Gotta love it.

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When there are less FDIC chartered banks now than in the late 1800s

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I'm pretty sure you mean "nationally chartered banks" not "FDIC chartered banks." The FDIC wasn't founded until 1933.

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So you're saying that a foreign nation can not own US debt?

And I'm in the field but that's all I prefer to say.

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Of course foreign governments can buy U.S government securities. The Chinese government (through its central bank) is the largest holder of U.S. debt outside the United States.

But that does not mean what you've been saying....that Germany will issue Bunds and use the proceeds to arbitrage into U.S. government debt.

The ECB would have strong objections against any of its members bypassing its issues thus short circuiting its monetary policy process. There may even be an ECB rule forebidding it.

Of course, since you're "in the field" I'm sure you already know that....