True Stories: Hybrid, eNote and RON Implementation

Join expert panelists that will discuss the status of federal legislation, trends in digital adoption and how best to prepare your organization for the next generation of lending processes.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

UWM has a plan to win a war of mortgage attrition

UWM's margins will fall all the way down to 75 to 110 bps. Mat Ishbia says it's the perfect environment to prove that his mortgage firm is truly elite.

Don’t sleep on non-QM products

Now is the perfect time for originators to consider expanding to non-QM products – to grow business, diversify their offerings and to ensure an opportunity to better serve their customers.

Analyst: Housing bubble not a question of if but when

As in, when is it going to implode?

Charles Hughes Smith at oftwominds.com warns that the industry may be just two years from an implosion of the bubble we’re in. Also, if you didn’t know, he argues we’re already in an echo bubble from the last bubble.

Read on.

The last housing bubble took about 3 years from peak to trough, and this provides a baseline projection for the decline of the current housing bubble, which is shaping up as a classic echo-bubble: very much like the previous bubble, but of slightly lower magnitude.

The projected decline over the next three years to the 110 level is the best-case scenario. Analyst Mark Hanson made a very persuasive case for a much sharper drop when the current housing bubble pops: Mark Hanson Is In "Full-Blown, Black-Swan Lookout Mode" For Housing Bubble 2.0.

In essence, Hanson suggests that the narrow base of the current bubble expansion–all cash buyers (speculators, private-equity funds, overseas oligarchs and corrupt officials, etc.) and marginal borrowers relying on highly leveraged FHA and VA mortgages–will collapse much quicker than the previous bubble, which was inflated by a much larger base of market participants.

Bubbles also have a habit of overshooting when they finally burst. the Federal Reserve acted quickly to re-inflate the housing bubble by lowering interest rates to near-zero and buying over $1 trillion of mortgage-backed securities. Given the narrow base of the current bubble, these tricks will not work should the Fed attempt to inflate Housing Bubble 3.0

In general, bubbles are followed by echo-bubbles, and the bursting of the second bubble ends the speculative cycle. There is no fundamental reason why housing could not round-trip to levels well below 100 on the Case-Shiller Index when the current bubble finally bursts.

If Mark Hanson's analysis is prescient, it may not require 3 years for the current housing bubble to implode; 2 years (2017) might be more than enough time for the speculative excesses to evaporate.

Read the full blog here.

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