Even if you work in the mortgage industry, you might be amazed at just how quickly market dynamics have shifted. As lenders like Countrywide Financial flock to the relative comfort of a thrift charter, Reuters reports that mortgage advances by the Federal Home Loan Bank system have literally skyrocketed:
Outstanding collateralized loans to the FHLB's 8,100 member financial institutions rose $110 billion to $769 billion as of Aug. 31, the office of finance said in a statement. Debt issued by the FHLBs in the $2.7 trillion "federal agency" market also rose by $110 billion, it said ... "An increase in Home Loan advances of $110 billion in one month appears to be unprecedented," said Nancy Vanden Houten, an agency analyst at Stone & McCarthy Research Associates. "In recent years, advances haven't increased by that much in any single year." ... "If you are getting your mortgage funded on the Street, it's hard to do that now," said John von Seggern, president of the Council of Federal Home Loan Banks, a trade group. "You're seeing banks and thrifts move to being the primary mortgage lender, at least in the short run."
Time will tell what the long-run picture will look like, but something tells me thrift charters are going to be much more popular in the next five years than they were in the previous decade. All of which, of course, adds up to more regulatory work for outfits like the OTS -- which may not be staffed properly to handle such a surge in membership and volume.