Wishing HW readers a Happy New Year

By: PAUL JACKSON
December 31, 2008 1:39 PM CST

It’s hard to believe that 2008 has passed us by, as I sit to write this column. For me, at least, time really has sped up this year; reporting on a financial crisis that has moved seemingly at the speed of sound has meant that I have lost the ability to tell, and often, sense time.

If you think I’m kidding, just ask my wife. Or my two small children. All three have been wonderfully supportive of my decision to run HW full time this year — I quit my corporate job to run this site full time in January of this year, and it’s been non-stop go-go-go on a breakneck news pace since then.

That said, I wouldn’t have it any other way. I view our job at HW as one where we help market participants make sense of a mortgage market that is simply no longer content to move at a snail’s pace.

And if anything, for all of the turmoil we’ve witnessed, I’ll remember 2008 as the year that mortgage banking actually caught up with the pace of the rest of the world’s financial markets. Mortgage finance finally became big finance. That’s not without consequence, of course.

It means that covering mortgages is no longer something that can be done in a weekly newspaper — news is now already out of date when it’s printed — or using an online wire service that runs between 8am and 3pm and takes weekends off. Those days are gone, likely never to return. So, too, are the days where the mortgage market could segment itself into “broker news” and “servicer news.” News relevant to the mortgage market and news relevant to the financial market is more interwined than it ever has been, which means news breaks Friday after market close, and on weekends before Asian stock markets open. And everywhere in between. Even on lunch breaks.

In some small way, I’d like to think that the start of HW years ago was because I saw this sort of change coming. I’d be at least partly right, given that all along we’ve sought to bring together primary and secondary mortgage markets via our online — and now monthly print — media platform. But I’d be lying if I said I saw everything coming that came our way during the past year, least of all the dramatic pace of change our industry has witnessed in even just the past six months alone.

All of which leads me into looking ahead at 2009. More than a few pundits offer their projections every year, with the best usually picking predictions that inevitably come true (it’s a science, akin to writing for fortune cookies: i.e., open the door, and it will no longer be closed). So I’ll shy away from that for now, if only because the only certainty I can see in the market for the year ahead — mortgage or otherwise — is that volatility will rule the day.

In the short-term, I think the Fed and Treasury’s actions to buy securities and do whatever they can to prop up mortgages will push down primary mortgage rates, but only in the short-term and at the cost of future mortgage rates. Which means I think lenders will want to get while the getting is good: when rates head north of 7 percent later next year, as I suspect they will, something tells me borrowers will sit back from housing again, and in a big way.

That says nothing of the looming number of Alt-A defaults out there that we’re likely to see, regardless of rates. Low rates can’t solve for a loss of equity or a lack of job, and both are large problems that still must work their way through our economy next year as we deal with a housing market that is yet correcting itself, and a burgeoning recession as well. I’m particularly interested to see an expected update to a First American CoreLogic study that estimates the number of underwater homeowners, which I’ve been told is coming in January — comparing that to the first report, which was released in October, will go a long way in determining just exactly what the nation’s housing and mortgage markets will look like over the next 12 months.

And that doesn’t begin to discuss what mortgage banking will see next year, and trust me, there’s alot of change yet to come. Bankruptcy cram-downs, RESPA changes, appraisal changes, new banking regulations, a secondary market still on government life support, an Alt-A market in desperate need of a buck or two…..that’s for starters.

I’m not very sanguine on our prospects economically for next year, as a result; I think much of the Obama administration’s first year (and likely subsequent years, too) won’t be focused on growth, or even recovery, so much as limiting collateral damage wherever possible and (hopefully) prudent.

Nonetheless, I’m committed to making sure that we make sense of this brave new world of mortgage banking for our growing number of readers — a commitment that the entire staff at HW shares with me. And we’re looking to find new ways to engage our readers, as well, which you’ll see in a pending site redesign, as well as an expansion of our coverage, too. But I’ll tell you about that when the clock rolls over to 2009.

For now, I have some champagne and a wife and two kids to go spend some time with. Thanks so much for your support this past year!