2022 Mortgage Industry Implosion Tracker

by | Feb 4, 2022

In March 2020, the Fed cut rates to 0%. Mortgage rates do not track 1-to-1 with the Fed rate, but by August 2020 it was the case that the highest rates available for vanilla normal mortgages were lower than the lowest rates, for the same, that been available in 2019. This created an unprecedented “refi boom,” which the industry term for when 100% of one’s own past clients have become eligible for a refinance to lower their interest rate and payment. By some measures, demand for mortgages increased 500%. This quickly became the best year ever for the mortgage industry, causing a lot of big players to go public, or “IPO.” Many people with little understanding of the mortgage industry have lost vast sums of money because they purchased at that artificially inflated stock valuation.

The refi boom was not the ‘free market’ in action, it was the Fed printing money, as highlighted by this meme from the time:

“Money printer go BRRR” meme, showing a 4chan character in a suit printing vast sums of money.

Naturally, this was “to prevent a recurrence of 2008.”

Fed announces unlimited purchases of MBS and Treasuries, adds multifamily mortgages
“Quantitative easing” is aimed at greasing the wheels of the credit marketsMarch 23, 2020The Federal Reserve announced on Monday that it will buy unlimited amounts of Treasuries and agency mortgages, including multifamily, to grease the wheels of the credit markets.The purchases are attempts to avoid the type of credit crunch seen after the collapse of the financial system in 2008.

Fast forward, it’s the year 2022. The Fed has announced “tapering,” the turning off of the easy cheap money printing press.

Now that the printing presses are being turned off, how’s the mortgage industry doing?

This is going to be updated periodically with the latest and greatest in the 2022 mortgage industry contraction, which will include many “consolidations,” acquisitions, mass lay-offs, and so on.

Better CEO fires 900 employees (this CEO was the “dumb dolphin” character, the one who went viral on TikTok) 12/6/21 – https://nypost.com/2021/12/06/better-com-ceo-fires-900-employees-on-zoom-call/ 

Redfin is buying Bay Equity Home Loans 1/11/22 – https://investors.redfin.com/news-releases/news-release-details/redfin-acquire-bay-equity-home-loans 

Guaranteed Rate purchases, and then liquidates entirely, Stearns Wholesale (Stearns was founded in 1989, and was the largest wholesale lender in the country as recently as 2013) 1/12/22 – https://www.housingwire.com/articles/guaranteed-rate-closes-stearns-wholesale-channel/ 

Caliber CEO steps down 1/24/22 – https://www.housingwire.com/articles/caliber-home-loans-ceo-sanjiv-das-steps-down/ 

LoanDepot’s profit in q4 2021 sinks 91% (this company’s CEO is the one who was sued by a former executive for widespread mortgage fraud during the refi boom) 2/1/22 – https://www.housingwire.com/articles/loandepots-profits-in-q4-drop-91-from-prior-quarter/ 

Mortgage stocks are in free fall 2/3/22 – https://www.housingwire.com/articles/mortgage-stocks-are-in-free-fall-so-whats-next/ 

Santander Bank to stop originating mortgages in the United States entirely 2/3/22 – https://www.housingwire.com/articles/santander-bank-to-stop-originating-mortgages-in-the-united-states/ 

NewRez origination profits decline 43% in Q4 2/11/22 – https://www.housingwire.com/articles/newrez-origination-profits-decline-43-in-q4/ 

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