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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Lending

This 1 chart shows mortgage “death valley”

Logan Mohtashami wins the Internet

August 6, 2014
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Earlier this morning on Twitter, national economics correspondent for The Wall Street Journal, Nick Timiraos, tweeted seemingly contradictory coverage on the recent Fed report concerning regulations on home loan approvals.

Timiraos tweeted that there is coverage of the Federal Reserve's recent finding on the impact of regulation on mortgage originations. HousingWire reporter Trey Garrison reported that the Fed found that the rules drive down originations.

Another news organization reported the opposite. Timiraos tweeted the two articles side-by-side for readers, so that they could draw their own conclusions.

But, naturally, I defended the veracity of HousingWire coverage. And, the competition, naturally, defended theirs. (Note, Timiraos wasn't taking sides.)

Furthermore, it is my opinion that regulations from the Consumer Financial Protection Bureau do more to harm mortgage originations than help them.

How someone could find otherwise is beyond me. After nearly ten years of covering financial markets on two continents, I can say one thing for certain: more regulation never equals easier business.

In fact, the whole point of regulation is certainly not to undermine growing business, but to keep poor business practices in check.  

This stands to reason, right?

Well, yes and no.

Ever-present social media guru, frequent blogger, and senior loan manager at AMC Lending, Logan Mohtashami, put the tweets in perspective.

He responded, and as it turns out, I was missing the big picture.

Regulation aside, the larger point is that the underlying economics are simply not there. Not even close.

Mohtashami even threw together a chart proving how mortgages are sitting in “death valley.” It’s both impressive and depressing at the same time.

So, bam, Logan. You win the Internet, today.

 

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