An Insider’s Look Into How Secondary Marketing Evaluates LOs

In this webinar we’ll explore the long-term financial impacts of renegotiations, extensions and fallouts, plus basic guidelines to be viewed as a professional by your secondary marketing department

HousingWire Annual Virtual Summit

Sessions from HousingWire Annual 2021 are going to be virtually streamed on October 25. Register now for FREE to tune into what housing industry leaders had to say this year!

How Freddie Mac is addressing affordable housing challenges

Freddie Mac is focused on addressing limited access to credit, housing inequalities, creation and preservation of affordable housing supply and advancement of homeownership education.

A NAR board member tells (almost) all

For this week’s Houses in Motion, a miniseries that is part of HousingWire Daily, we spoke with Lisa Dunn about the pressing issues in real estate, including disclosure of agent commission.

Mortgage

Danger ahead from lenders courting subprime borrowers?

One former lender says credit score not enough of a metric

With news that some lenders have ramped up loans to subprime borrowers, there may be some warning signs of a possible repeat of banking issues. 

Berkeley Research Group’s Neil Librock, a former executive vice president at Wells Fargo (WFC), notes the danger signs ahead.

“Lenders seem to lack ‘institutional memory’ – high-risk consumer lending was touted as ‘predictable,’ based on supposedly sophisticated analytic tools, only a decade ago. Subsequent events proved that wrong. I expect history will repeat itself,” Librock said.

However, he notes that “there were some serious lessons learned” in the mortgage market from the crash. It doesn’t look like the aggressive non-prime expansion of the early 2000’s is being repeated now.”

At Wells Fargo, Librock was responsible for a $400-billion consumer loan portfolio, and directed the due diligence review and integration of loans from Wells Fargo’s Wachovia Bank acquisition.

Librock said he expects a rash of inquiry and possible legislation or regulation when interest rates rise significantly, pointing to how the Consumer Financial Protection Bureau recently turned its sights to payday lenders.

“One of the big questions lenders must ask is that while using one metric, credit score, is a convenient way to describe borrowers, it is overly simplistic and does not fully address the real issue – can the customers afford the new debt with high interest rates?” he said. 

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