KP Talks Dollars and Sense

There are something like 300,000 part-time jobs, according to Dan and Barry of the MBS Highway. So it could be a little crack in the data that maybe not as good, but there are still jobs and there are still income. The report came out and that's the headline number and we're down to 3.5%. It's like a 52 year low since 1969 or something like that, with those 528,000 jobs created. So...

Forbearance data has decreased to 0.74% in July. A year ago, previous FHFA director Mark Calabria, hit the entire industry with a 50 basis point adverse market fee. A tax on the American homeowner of 50 basis points. Can we imagine what rates would be like right now when home affordability, according to the National Association of Realtors in June, hit like the lowest number in two decades or some...

70% of GDP is consumer demand. 75% of that consumer demand is spent on services. Maybe sentiment is negative, maybe credit card debt is increasing, but there's still tons of consumer spending on services, and a lot of our jobs are services. So are we seeing cracks in there? Has the Fed done its job yet? After contracting at an annualized rate of 1.6% in Q1, GDP shrunk in Q2 by 0.9%. The reaso...

There are more people working two full-time jobs now since the data was collected in 1994. This means, there are more people working two jobs of 70 hours a week or more. So the jobs have not been getting lost and they have not been shed at a mass scale yet. So it's hard to decide whether we're in a recession or not when job strength is so good. But wage growth has started to decline, but...

The European Central Bank announced that they are cutting 50 basis points, which was twice as high as people thought at 25 basis points. Next week, the Fed has their announcement. It's widely expected at least 75 basis points. But some people think it maybe 100 basis points. We're seeing home sales slowing still at an elevated pace, but it's slowing. So it's less good news. Tha...

Private-Label Securities or the PLS markets are less liquid and there are less buyers. When you securitize a loan of any type; you close, you fund, you kind of pool a bunch of them together. And then once you create your security, then you go out, and sell it on the market. Securities Industry and Financial Markets Association or SIFMA is a trade organization that kind of sets out regulations and...

FHFA made a 50 basis point fee inside universal mortgage-backed securities! This has threatened the fungibility of universal mortgage-backed security. We used to have different kinds of coupons depending on which GSE was buying the loan. So you had either Fannie coupons or Freddie coupons. You still have Ginnie coupons. I've said it before that the secondary market is cold, heartless, and unf...

Liquidity and credit are the next two big things to watch besides labor. If labor started to crack and the Fed is raising interest rates, maybe there's another 75 basis points for sure coming at the July meeting. And then there's another meeting by September. That is making credit more expensive. There's a difference between credit and cash. Cash on hand is cash. Credit is what bank...

Quad witching is different than triple witching. Options contracts and futures contracts are expiring on the third Friday of every month. That's called quad witching. Credit makes the world go round and credit depends on liquidity. Food and energy have continued to rise and putting a real damper on things. Will housing slow down as a result of it? Has the Fed gotten so far out in front of whe...

The markets have sold off. It's been a violent, volatile last couple of sessions and the reason is inflation. Inflation is an invisible tax on all of us. It will eat and erode the strength of the dollar. It will cut into your budget, it will tear everything that you do apart. Interest rates for mortgages have gone up. Home price sales have gone down. The Fed cannot control food and energy, wh...

We've seen data saying existing home sales are down. And you hear this nine months supply number. But our good friend Logan Mohtashami, the lead housing analyst at HousingWire basically broke that nine months down, six of those months are homes that started new construction but were not yet completed. We're seeing some of the sellers and listing agents change their strategy and wait for...

Cash supply and money supply are shrinking! That's what the Fed is doing. They are shrinking the money supply. We're in quantitative tightening. We've all experienced a lack of supply in housing. There is an opposite effect when you have less supply and overwhelming demand. The demand for U.S. dollars across the world. Don't think just about us and our economy. Think about the...

Congratulations to Sandra Thompson, the new FHFA Director! She's the first African-American female to be appointed to this position, which is quite an accomplishment. We're seeing wealth gap widening, and the divergence of haves and have nots. We’re also seeing some softening in maybe some of those 11.5 million job openings from the JOLTS reports. Some people may start to lose their jobs...

BlackRock is holding cash with two hands! 70% of the economy is based on consumer spending. Our consumers are still holding their cash. They're still in a good spot. But we have to continue to watch the haves and the have-nots. There's been a labor hoarding going on. Cathie Wood from Ark Invest says that a lot of people have been hiring kind of as fast as they can because the employers d...

Advanced GDP has a lot to do with inventory and trade. It was anticipated to be 1% growth and it came in at -1.4%. So no one is saying that the final Q1 GDP will be negative. That doesn't mean that it won't. Inflation is still high and persistent so the term stagflation is one where you've got stagnant growth. Not necessarily recessionary growth but just maybe flat. 1% growth is sti...

There's growth, slowing growth, and flat-out recession. Recession or the R-word is a very good thing for our business because there's a ton of refinances, low-interest rates, and we start booming. But right now, we're in that in-between zone, where the expansion of the economy is slowing. We're still expanding. We're still growing. Our economy is 19% larger now than in 201...

We may be entering the later innings of an expansion but we are still an economic expansion. Will the fed slamming on the brakes slow down our expansion? Will the debt cycles be shorter now? Typical debt cycles go from 5 to 7 years. It's been just over 2 years since we crashed .1% GDP or even half percent GDP is still growth. The credit markets are super important to the growth of our economy...

A non-qualified mortgage was defined as such by Dodd-Frank when that legislation was passed. Subprime loans absolutely wrecked Fannie, Freddie, and Ginnie and everything that was going on. And Fannie and Freddie used to buy loans that were considered subprime. So in part of Dodd-Frank, what they did is they define what is a qualified mortgage versus a non-qualified mortgage. A non-qualified mortga...

Will the 10-year go up? Will it matter what the Fed is doing? The Fed is now trying to fight inflation. We are at full employment as an economy. Our jobless claims, which is kind of like a vis-à-vis layoff indicator, is at its lowest since the 60s. We have over 10 to 11 million jobs open that people are not taking. That's what the Fed is going to do. The public is talking about the plan of at...

We are an interconnected global economy. And whether we like it or not, Russia is part of that society. They're part of the UN Security Council. They are a major global force, as it relates at least to oil and gas. And so there will be repercussions. But for now, the flight to safety has created lower interest rates. And for housing, that's a good thing. It helps with affordability. We s...

Russia invaded Ukraine. How will it impact us and housing and the broader economy? The interest rates actually improved, it got better, lower and the stock market rebounded on the same day when Vladimir Putin and the Russian army invaded Ukraine. Why? The secondary market, the equity markets, and anything having to do with money is cold, heartless and unforgiving. And it's a sad state of affa...

We are at a 3.8% unemployment rate. 12 of our 50 states in December have had the lowest unemployment rate ever. We have over 11 million job openings. The economy is strong. With the Russian invasion of Ukraine, there is a heightened sense of inflation. There's a sense that unexpected inflation may be worse than we think. Could the ripple effect of Russia affect us? Russia is the 11th largest...

What is the mortgage collaborative? It is a group of lenders that are here to talk about what's working, and what's not working. How are we going to face margin compression? Which vendors and partners are delivering great CRM? What are we all dealing with out here as professionals? That is the point of collaborating. Fed Chairman Jay Powell said that they assumed that the supply chain wo...

We have seen a meteoric rise in interest rates. It is one of the quickest rate rises we've seen in a long time, and that's because it's kind of run in parallel with inflation being hot and the economy running hot. And, Jerome Powell, the Fed chairman, would like you to keep the word inflation out of your mouth because he talked about it being transitory. The big headline was the bil...

We recently had our sales rally for both the retail and the TPO channels with correspondent wholesale at the Balboa Bay Resort. We rewarded all of our top originators, top branch managers, county executives, regional managers, divisions, and everybody who worked hard in 2021. It's a great event! We had a big CPI inflation read. What consumers are paying for like goods and services, rent, and...