U.S. Mortgage Companies ARE GOING BROKE! WHY YOU Should Care W/
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- Опубликовано: 21 авг 2022
- In the U.S. many mortgage companies are going broke due to mortgage demand dropping through the floor, especially for lenders that do non qualified loans. Today I am talking with Travis Spencer from Real Estate Mindset to get his take on what is happening with U.S. mortgage lending and how this will affect the housing market.
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Remote Work Causes WORST Housing Market Ever! ruclips.net/video/be9UiVt-ZTQ/видео.html
I think it's totally fair to say "You didn't see the 08' bubble, why should I trust you this time"? That's how smart people make money, by listening to people who have a history of being correct.
I was 27 in 2008 when the big bubble burst, I owned a retail business and during the previous 5 years I had customers try to convince me all the time to buy a house. I would softly warn them that there's a missive price drop on the horizon. I then bought my house in 2012. My point is, I could see it then and I wasn't even in the business, and to me, this is nothing like 08' for so many obvious reason. The main being low supply and high quality loans.
My feeling is a lot of people who missed the 08' crash and didn't understand why it happened are over reacting to this correction, calling for another bubble crash. It's just not the case right now, most homeowners have high equity and low interest rates, they're in no hurry to sell.
Minus a total economic collapse, we will not see no greater than 5-20% correction this time imo.
^interesting
I started working in 2007 right after mid-school and barely had any savings when I lost my job in start of 2009 and was completely broke in 2012. I was a very angry robot._
@@simrdownmon6431 So are you suggesting it is okay to buy real estate now? Or better yet, have you recently or are you going to buy soon?
@@furbl4345 The only reason to buy something before it's about to drop 5-20% is necessity. If someone needs to buy right now, then do it, otherwise probably better to wait till the correction takes place.
What an absolute honor to be able to talk you Michael. Thank you for all the good you do 🤙
Likewise Travis! I am so glad we could work together and give some extra value to our subscribers 👌
Travis you are a True Survivor !....Thank you for telling your story and Honesty...Godspeed !
Bro, love the content but please fix the posture before your spine snaps during a video.
@@HubertGeorge 🤣 believe it our not my posture is intentional. Odvisouly I can't make everyone happy, but I always want to show a none aggressive posture. Especially when interviewing. It's a technique I learned from Joe Rogan.
Travis, as a fellow LO how can Amcap keep you on if you stopped producing?
Travis, like you we got hit too in the great recession. Lost our handyman business and home. Banks wouldn't work with us even though we had excellent credit. Years later had a credit card we defalted on for 9,000 dollars, a judge gave a creditor who bought it a 65,000 judgement against us and garnished our wages. We had to declare bankruptcy 7 years ago to get free from that. It was horrible and we recently had finally just bounced back, and saved our money, and were ready to buy again two years ago. However, the insanity hit and prices skyrocketed so we said NO THANKYOU and did not buy. I remember what it was like to be upside down on a mortgage. Everything was just going up way too fast. We are in one of the top crash zones for housing. Just sitting on the money now, adding to it, and waiting. We have no loans of any kind. We own outright all three of our cars. No credit card debt. We are very fortunate not to have greedy landlords. The other rental homes around us go for 2,500 a month, but our landlord never raised the rent and we are still at 1,500 a month, so we are just going to sit tight and wait for the crash (already been here 4 years). I'll check what is going on come spring and see where everything is at. There is NO WAY I am entering an inflated home value market again. Last time around I did not educate myself properly. This time around I am paying very close attention. Last time around, we bought at a time like right now. We thought we had gotten a deal with paying 20,000 under the estimated value. Several years later it tanked and we were upside down on that mortgage by a lot. Not going there again. NO WAY, NO HOW. I can patiently wait for such a big purchase.
I had 2 houses in 2008 and tried selling one of them. It didnt sell so i rented it. A year later the renters moved out and when the market was crashing i just stopped making my payments and walked away from both of them and saved my monthly house payments and bought a foreclosure 2 miles away for 11k cash. If you get upside down you can walk away. Credit score will take a hit but if you dont need to borrow who cares. My credit as back to 740 now.
Be careful when buying in South Florida. They raised taxes on some new condo owners by 150% this year.
Damn and I want to move there, it seems expensive to live there especially given the income ppl make there. It’s crazy
Downside of rising values is the rise in taxes and insurance. Can be burden. For homestead, Florida has Save Our Homes Act and tax exemption probability, but does not apply to other properties and not in the owners control. Since tax assessments are figured by mass appraisal algorithm once per year, the higher tax rate can persist even in rapidly falling market. The roll back rate used to insure that municipal budgets are met can result in stable tax bills even if assessments drop, which can take owners quote by surprise. These are some of the I'll feeling side affects springing from a big real estate run up.
@@renleoni1971 Home insurance, taxes, HOA fees, food, gas.vechicles, ammenity fees, real estate, etc....Florida unfortunatly has become a MONEY PIT.
@@MovingAlong531 wait if you can crazy florida now
Also this bogus HO6 crap they've push into effect recently
Michael.. love that you and Travis are doing these videos to educate consumers. ❤️ thank you!
Our pleasure! Its been great doing these and hearing the perspective of other professionals. The more we all get together and discuss these important housing issues, the smarter we all become 👍
@Cock Head I actually did a full video on that if you want to check it out a few months back. I explained in there why I bought at the top of the market. Even though the market is at the top I did not pay top prices. Check it out👌
It’s so refreshing to see people in the industry who are honest about what’s really going on in the market and aren’t out to swindle people into purchasing right before a crash
I love it when people go out of their way to help others.
You two are my faves along with Reventure Consulting! Good content guys keep it up! 💯
Awesome! Thank you!
in absolute awe with his Work Ethics!!!! Huge amount of respect for that! 💯
There are so many idiots out there that believe if they have equity in their house, that they cannot be foreclosed on. If you have equity and lose your income to make your payment, you'd better list your house immediately and hope you get it sold before you get foreclosed on.
Will the stupid Biden administration pay for mortgages like they are doing now with students loans?
Unless.... if you didn't miss the >3% refi and paying a three figure monthly on your primary residence and keeping a six figure monthly passive income on your multi family property.
Absolutely I keep hearing that argument all the time and it’s just not true. And doesn’t even take into consideration how many people borrow against their house and have less equity than you think
@@MichaelBordenaro you are correct buddy. I have seen so many people take out heloc or cash out refi's, to continue living it up, or buying everything they wanted, and yes most did it at the low rate, but when all this comes to a head and their emoloyer lays them off, they are going to lose it all.
@@pogiboy3571 I got in during 2008. I own 8 single family rentals & a farm. I paid pennies on the dollar for them. I am sitting on the side lines waiting for it to happen all over again. I hope to get 3 more rentals, or a vacation house or camper lot for my toyhauler in the keys I will rent out when I'm not there.
9:17 I agree with him, I think we won't see anything similar to 2008-09 in the residential marketplace. It will be a lot worse, including a collapse of the commercial real estate market.
Care to wager Prof .. MS?
@badinstinctsRUclips OK. I respect your opinion. But let's check back here in January 2023, after a Stock Market sell off in October, 11%+ inflation, and massive lay-offs. Followed by a very cold and snowy winter that will drive up energy cost.
@@rayo1371 We shall see. But in a year it will be Doctor Stovall.
@badinstinctsRUclips Oil and Energy futures?
Most can relate, I had shortsale in 2012, FHA covered difference with mortgage insurance 100k, but made it and are 10x better by working more, rented for 3 yrs, bought cheap home in 2016.
We all need to tell each other the truth and listen to those who lived it. Thanks dudes.
Great vid! Thank you.
Thanks for the lending lesson. Very inrormative.
Thanks for being here Jeff
Awesome video guys! This video was absoultely transitory
Thanks dudes. You're providing very important, and honest information.. I think Travis mentioned that banks weren't giving loans in 2011. True story, I bought homes in Florida in 2011, and no bank would give me a cash-out loan mortgage. (It spite of a 800 credit score, and paying cash for my houses!) I turned out well, but I didn't invest as much as I thought I could have. Listen to these guys...they are being honest!
Thanks for that!
Great content. I watch both of you. Thanks
Very much appreciated! The chemistry amongst the two of you were definitely on point. Thanks
Our pleasure!
Wow. This is enlightening. I was wondering why cancellations were so high - WOW!
Anyone who lost during the last crash... understands that it takes baby steps...
Absolutely
You guys are the best Dynamic duo out there. Love you guys Collaborations. 👍
Thank you very much!!
I was waiting for them to collab. Absolutely BONKERS! 💪🏼💪🏼
another great video. just subscribed because you are one of the few people out here giving your honest opinion. Good job Mike!
Thank you very much!!
As usual… Awesome. Thank you
Our pleasure!
Great insight from Travis's experience
Glad you enjoyed it!
I’ve recently added Travis to my list to watch
I really enjoyed listening to your guest and subscribed to his channel. Interesting and smart.
Awesome, thank you Joseph!
Housing Market will crash b/c of the absolute greed-real estate investors, banks, builders/developers buy land and build only single family homes not affordable or large occupancy housing. These greedy people cut trees, clear green/natural areas simply to make money-Bad Karma!
I feel like i'm gonna end up like travis. We made a construction deal with fixed price i 2021, it's almost done but payment will first be after house is done - therefore loan is first when house is done, and rates have in Denmark gone from 1% to almost 5% now, we just simply can only afford the mortgage. We had plans of kids, but we will barely be able to afford the house for the two of us. House is heated with ground heat which uses electricity and with Russian/Ukraine war, kWh prices have gone from 1 kWh in dk to 7/8 kWh is the evening now.
Love your guys’ insights. This may be off topic. In 08’ me and my 2 kids were way below poverty rate and never dreamed of opportunities but I hustled. Fast forward to present day. I make really good money, however, I stupidly got myself into massive debt. I only blame myself. I’m now working 2 nursing jobs to pay off that debt in huge chunks. I’m setting myself up for the upcoming opportunities. I don’t want to miss them.
Thank you guys! 👍😘
Our pleasure!
I just closed on a $275,000 Line of Credit Equity Line on a $500,000 free and clear rental property. Not sure what I will use for. Groceries, gas, or purchase distress deals. Meanwhile the parking lots and stores at Lowes and Home Depot are empty.
It's obvious Big Box Stores are in a fire sale to get rid of inventory, Big Box stores will start conducting massive lay-offs to close locations and liquidate over-inflated commercial real estate prices. Not to mention, a lack of available labor force.
Thanks!!
Welcome!
Great Interview, Michael !......Travis was a Terrific guest , who has experienced the highs and lows in the R/E Game...A True Reality Check...Thank you very much !....Take care..
Thank you Jim! Yes Travis has been through some pretty tough times in RE and it was great to get his perspective on things especially for people just entering the market
First time I see you without sunglasses and not walking on Florida!🤸🏽♀️🤸🏻🤸🏽♀️🤸🏽♀️🤸🏽♀️🤸🏽♀️🤸🏽♀️
Haha some people might not have recognized me 😂
Well well well, the tag team'ers are three super stars now, you guys do good work!
Thank you for this video, Michael. Just became a subscriber to Travis's RUclips channel.
You're welcome Jennifer, Travis is an excellent resource to have as well 👍
Nice to see you play both Strats AND Les Pauls!
So good, guys! 👍
Two of my favorite RUclipsrs. I can't ask for more. This is bonkers!
2 of the top 3 real estate vloggers in one place
Just found your channel today. So good!
Glad you enjoy it!!
I’m a subscriber to both channels n to see a collaboration is dope 💪🏽
Take a shot each time Travis mentioned MCap! Lol. Joking apart great content. Thank you for the honest, straight forward current and forward outlook on the real estate market.
😆 Yes!
You guys are awesome!!!
Thank you!
Thanks for explaining this. People do not understand all that happens when things go bad and you are underwater in your house. Exactly what happened to this guy. People think you just give the house back to the bank. No. I have seen it happen to people and it is awful. Maybe you can do a video specifically all about this and just what can happen. People are buying overpriced homes and for those who have paid premiums for homes can be underwater and they think they will just stay there with the low interest rates, but life happens and they will need to sell. The only option I know of is that they rent out the house. Not sure why this guy didn't do that but he may not have been able to get enough. And there are expenses to renting a house out too.
Thats right, I am glad Travis shared his story on this. I think it would be a good topic to cover more in a future video 👌
Wow 19:33 I love hearing this, thank you! Best wishes to you Travis, you are standing in your life purpose. Stay upright, God got you, brother. We we are not to worry about those critics.
Content with value. 👍🏿
This was actually very helpful content for me as a broker. I feel like lenders are often secretive about how they come up with rates and fees. This provided an amazing amount of clarity for me. Thank you!
That is great to hear Colleen, thats one of the reasons I wanted to have Travis cover more of the lending side of things in this one, so everyone can learn a little more 👍
Great stuff guys!! The bubble is popping!!
It sure is my man!
Keep up the great videos thank you.
You bet!!
Love your content Michael, my fiancé and I watch you Travis and Steve Daria religiously! Great insight and unbiased and honest information! Keep up the good work!
Thank you so much Marie! We are all happy to be a part of your RUclips family and glad to be giving you some solid info👍
Marie, I agree they have great content and information. Another guy to follow is Reventure Consulting he has done videos with Michael as well. Good data and insight.
Great colab! Thanks to people like both you and Travis, for always looking out for your customers! Makes you guys that much more trustworthy, and will ultimately increase your business, as people will want to come to you guys first!
Thanks Jeannie! I totally agree! I have lost deals in RE because my honesty but in the end my clients respect me more 👍
@@MichaelBordenaro That is the most important thing...your credibility and reputation.
@@Jeannified Absolutely. It takes years to build a reputation but it can be lost in minutes
This popped up on my RUclips after speaking with a lender so i really enjoyed listening to you both. Definitely appreciate all the information 👍
Great video. Very informative since we are looking for a second home in FL. Now if only I had patience.
Thank you Bob! Patience usually pays off, but sometimes you gotta do what you gotta do
Wait if you can crazy in Florida now
i appreciate you sharing your information with us. true investors share their hardships. i have a question what is the percentage that a person has to pay on taxes of the deficiency amount?
Finally, let them all go under. Thank you Michael for this informative video.
You're very welcome
Loving the tag team content this is BONKERS , let’s go TRAVIS!
Absolutely bonkers man !!😄
Keep up the good work Mike! Your videos are a joy and very accurate information.
Thank you very much! I will definitely keep them coming 👌
The plumbing of the agency mortgage market is still functioning well, albeit price volatility is back with a vengeance as Travis mentioned. A year ago, agency MBS would trade in a range of 10-20 bps , now it's common to see 60+ bps swings per day. This is putting pressure on trading desks at mortgage lenders with a big increase in hedging costs. Non-agency market (non-QM) is in trouble. Investors suddenly stopped bidding on these loans. Sprout mortgage, a leading non-QM lender, abruptly shut down as they were stuck with a big pool of loans they couldn't sell for a decent price.
The mortgage industry simply has too much capacity right now amidst collapsing demand (Which is the exact opposite of just 18 months ago) . There will be M&A and Bk's to balance the industry out. Just imagine the airlines having overbooked flights for 2 years along with fat profits and then suddenly having to fly half empty planes....
A real estate crash much worse than 2008 is just around the corner
What you're seeing isn't really demand falling off, it's people just giving up, who can't afford to buy at these over-inflated prices AND interest rates. Once pricing corrects, demand should skyrocket.
@Michael Bordinaro,
Hi Michael,
I'm wondering if there's a grid metric calculator which could work for the current housing phenomenon.
A transitional to show what those metrics mean in a stable leaning market.
What do you guys know about the “Trade In Mortgage, also known as-Claque?” What I think I know is: It enables the current homeowner to make a non contingent offer on the next home, close and move in before selling their current home. Would you recommend this and what are the pros and cons with company? Thanks BB
I feel like my lender at that time 2010 did same thing to me she let me go under water to benefit her company with 1/2 the price of what they sell the house to me sad really sad still hoping to find something at this moment...FAITH
It is so sad to hear those stories...
Mike! Please comment on what's happening on the appraisal side of sales.
Are the appraisers under pressure to come in low in current market conditions?
I bet nobody wants to look like they are being too generous...
Are banks pressuring appraisers to come in low?
Can you explain how this part of the industry works please?
My favorite real estate bros.
2 of my fave guys together nice!!!
Glad you enjoyed!
Michael and Travis together now you know you're in trouble.
😆
Michael thanks for having your great guest on . You both had so much information to share and being so honest and up front with everything. Keep up the good work.
Our pleasure!
Nice collab!
Glad you think so!
What is the white acoustic guitar hanging on the wall?
I do mortgage loans, similar to this guy. mainly 30 year fixed Fannie Mae or VA purchase only loans. definitely slower for us, but we have also other issues with our niche market. we are also on the peak of the roller coaster. prices are too high and when you raise interest rates you see the flip. prices need to drop and demand will trickle in. also, I don't think 3% is available because there is rules under a QM loan. think 3% total loan origination costs is the max, so cant do $20k.
I understand your point. I hope you understood mine, which was how pricing works. Technically the higher the loan amount the less the 3% is needed and vise versa. High cost loan protection/restrictions always have a play on things.
I did mortgages for 25 years! I got out during the pandemic because I woke up to the horror of mortgages! I couldn’t bring myself to sell death pledges anymore!
Cool episode
Thanks!
I have had a great experience with Rocket Mortgage and my best two friends are in the mortgage business
I am the oddball. Built my own house in 1990, never had a mortgage. I rent my home from the county.
Good for you!
Travis and think it’s very good conscience back to Travis’s point yeah I think investors will probably do that because I know that you’re your educating people do you know about finances in real estate and you know what a pain we’re not paying out all the pagan put yourself in a negative equity so mean that’s good
Absolutely Banker I love it
Nice collab
Thanks 🔥
The best guys
Cost Efficiency is crucial when running a business
This downturn has just begun and already mortgage companies are going out of business. To me that means this is far worse than people think. Put this in prospective, how does a company go bankrupt within only a few months of a down turn, a few months of bad news? So that probably means that either things have been worse in the industry for longer than we know, going back even into the "good times" or these companies were capitalized and run poorly. If either is true then of these companies then they are not alone and how many other companies were hiding problems or are over extended right now. What's going to happen in six months, a year, a year and a half when this downturn gets into full swing and people stop paying their mortgages en mass for a variety of reasons including the new that will thwart all monetary easing to get the economy going, inflation.
I'm really excited about this crash that's coming, should lower my property tax by quite a bit.
Helocs have been selling like hot cakes in SoCal since last year and even more now. I work for a SoCal lender community you would refer to in order to keep things down low. But people are nuts they push for as much as possible HELOC as they can get knowing it’s like an addictive ATM that’s giving you a lump sum and the liability if variable interest rate and high interest rates. There will be a hurt of pain and reality check for a lot of SoCal homeowners and lenders doing biz last few years like fat hogs
I have been talking about this too, and I think the day of reckoning is coming for heloc folks as rates rise and home values drop
Wow! Get interview. I will certainly check out his channel.
I'm a renter and debt free, also I am waiting to see what happens in the market before buying anything. Patience is a virtue, the wait won't hurt you.
Keep up the geat work.
Thanks David! Travis is doing the same as you and waiting for the right opportunity. Patience always pays off!
So when won’t we be at risk?
When the market starts stabilizing. We have healthy amounts of inventory, and it has given prices time to level out to where they should be. That might be still higher than before, but almost definitely will be lower than today
In Canada brokers didn't exist 25 years ago. As the banks and credit unions have to pay the Broker a commission and have to pay their employees to verify the Broker application it will be interesting to see if they get rid of the middle man that was created after the 1990s recession if the downturn is prolonged. This will allow Financial Institutions to have control of the customer again and cross sell them banking products. I don't know if America is different but our Brokers are basically Travel Agents surfing the internet for the best price as the Lenders have to verify the Brokers work anyways.
Bonkers! Great video! 🌸
Thank you! 😊
I am watching the crash in real time. I went through something similar. Not trying to time it just waiting for when the numbers work for my capital.
That is the smartest thing to do! Wait for when the numbers make sense for you
That is scary to hear his story sorry you went though that
Please check black stone 50 bil in single home Michael. Florida is renting market bro
Why don’t you go on the one rental at a time channel Travis?
My "freelance" mechanic said he might fix my car for $1489. Should it require more parts it will cost more. No guarantee any of it will work. Back over to Mr. Hyundai next.
There has to be a crash were i live in 2019 homes were 240 to300k now they are 580k to 1mil.
If it doesn't feel right it isn't right.
Thats right!
We choose truth over facts!
You had me at “absolutely BONKERS”
😆
brother,,,
I feel like the real estate market in NJ is still strong due to New Yorkers leaving the city still.
Who cares what the house is worth if you aren't planning on selling it but living in it? Once it is paid off, whatever you get for it is profit. If you are paying the same in rent, you might as well buy.
Exactly. All this only matters if you are buying an investment property. If you are going to live in the same place for 10+ years its better to own.
@@jessn5677 In a rental, if you have to leave before the lease is up, they can make you pay until the rest of the year even if you are broke. You might still owe the money. A least with a house, you do build some equity and it has equity for a debt.