What's Wrong With This Picture?

Tyler Durden's picture

Remember when everyone said rising rates would not cripple mortgage origination and the lending pipeline? Well, tell that to the largest US mortgage lender, Wells Fargo...

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Dr. Engali's picture

Get to work Mr. Yellen.

JohnnyBriefcase's picture

Residential mortgage originations are only down because everyone in america already owns a nice big home.



El Viejo's picture

When the price of gas and electricity and oil skyrocket they will wish they had a smaller home.

TruthInSunshine's picture

Bloomturd Financial just reported that Wells profits increased on "cost cutting" - that's the old Wall Street shuffle.

Boris Alatovkrap's picture

Do the Wall Street shuffle

Hearing money rustle

Watching greenbacks tumble

Feeling Sterling crumble 

You are need yen to make mark

If you are want to make money

You are need luck to make buck

If you are want to be Getty, Rothschild

You are must be cool on Wall Street

Popular song by 10cc, circa 1977

SunRise's picture

Then their wish will come true.

Never One Roach's picture

Gee, people may need to actually start saving again for a larger cash down payment.

Oh the Horror!

Citxmech's picture

Give me a small house with a big barn (or two), and some acreage for a garden along with plenty of critters.

GolfHatesMe's picture

We just need to revise down Dec 12 through Sept 13 to under 50.  Fixed & a beat!

Cognitive Dissonance's picture

Ultimately it's not about low interest rates. It's about clearing the residential real estate market....or in this case not clearing the residential real estate market.

The shadow (real estate market) knows.

Spastica Rex's picture

There are still several abandoned houses in the about 1 square mile white trash neighborhood that I live in.

greatbeard's picture

I'm back in the market for a new ghetto estate.  It's amazing how many repo houses are out there but not on the market.  Then there are a bunch of houses that "investors" recently purchased and jacked the price up 50% to 100%.  I'm seeing a whole bunch of that action.  The real estate market, at least the one's I'm looking at, are a shark tank full of predators.  It doesn't give one a warm and fuzzy about jumping in.

El Viejo's picture

We live in a world full of predators of all shapes and sizes.  What happens in a world when there are too many predators and too little prey??

NotApplicable's picture

Back around 2006/7 I noticed that the local good ole boy bank had opened up a property management office in a building they owned next door.

That was my first clue that they weren't planning on flooding the market with all of the properties hitting their books. I'm wondering now if they've hooked up to the rental securitization pipeline, selling them in bulk, or just sitting on them (marked at par, of course)?

Maybe I'll have to wander into the office some day and find out what they're all about.

Glennd1's picture

Okay, "Mr. Yellen" made me giggle uncontrollably. The site of her makes my junk go turtle. 

Rentier's picture

sheesh rates haven't even really even begun to go up even.

CrimsonAvenger's picture

What, you don't like getting data a year ahead of everybody else? You can't arb that?

LawsofPhysics's picture

Ha, nice, yes I see a rise in mortgage applications...

nice catch guys..

TruthInSunshine's picture

I missed that, too.

My brain ASSumed that this was chronologically sequenced - and I thinking,s supposed to be, though I'll wait for the clarification since I'm not in Wells Fargo's number torture chamber at the moment.

Deo vindice's picture

First a double post, and then wrong dates on a graph; both of which have been revised.

Now even ZH is revising their postings and data retroactively. This is just simply too much.

NotApplicable's picture

The Singularity approaches!


TruthInSunshine's picture

It is the Polar Vortex's fault.

It was too cold to get a new or used home mortgage - or a refi - even online and/or over the phone.

Dennis Kneale said so.

MarsInScorpio's picture



You realize the so-called "Polar Vortex" was, until this year, popularly called "The Alberta Clipper." Eveyone has heard it by that label for years.


Notice you haven't heard the phrase used this year.


But when you are NOAA, and sitting in the first pew of The Church of Climate Change, and people are doubting your theology, you have to do something to change the perception of your preaching.


So you dump the old name, and start with a new name - from the public's viewpoint that is (It's always been scientifically the Polar Vortex, but it was dumbed down to Alberta Clipper.)


Bottom Line? The last one just happened to be an outlier on the Alberta Clipper curve; nothing new under the sun.


But by calling it the Polar Vortex instead, it resets the perception of what is happening - to pump and dump the theology of Climate Change.


Even the weather people are pathological liars for their religion . . .


LawsofPhysics's picture

Nothing is wrong with this picture.  Want to buy property? save some fucking money morons.  No more "no money down" bullshit loans,  after 2001 and 2008/2009 isn't it pretty clear that "free money" only enriches the fucking paper-pushers.

my god people, wake the fuck up.

Charles Nelson Reilly's picture

I agree with you.  2 Problems though... 1) small percentage of people have any money left to save after paying the bills thanks to Greenspan & the Bernank & 2) housing is still way overvalued imo.  My wife and I are in the 10% of combined household income.  We have about $50k worth of savings to put down on a home.  Since we're not stupid and refuse to pay the ridiculous prices of the DC suburbs, we are looking well north.  Problem is, 30-40 miles outside DC you still are looking at anywhere from $350k-$500k for "nice" homes".  It's a fucking charade what some of these realtors are asking for on some of these 40 year old houses that need $50k worth of work.

fuck it... I'm sitting this one out for the time being.

LawsofPhysics's picture

What can I say, life is and has always been hard, period.  The point is (as you say) housing is still overvalued, so why would you want to make it even more overvalued with easy money?  The sooner these paper-pushers are taken down, the sooner we get true price discovery (this applies to more than just housing IMO).

TeamDepends's picture

True price discovery..........(tears up)

Fish Gone Bad's picture

Now that the greatest ecological disaster has hit the west coast of the United States, it will take about 10 years for all the cancer to start showing up.  Cancer is very expensive to treat and it will bankrupt pretty much anyone not on welfare.  Want to see cheaper houses?  It will happen soon enough.

centerline's picture

Here in Florida, when homes go vacant and no one cares for them mother natures screws them up fast.  The humidity, bugs, etc. have at it in a nasty way.  Mold is one of the biggest killers.  Lots of houses are already lost (financially) and many more to come.  In some areas these lost houses are right in dense neighborhoods (typical cookie cutter home developments).  I have no clue how this plays out.  I suppose more affluent areas might fight and get homes torn down and lots scraped.  Other areas (most areas) will just start looking more and more like Detroit.  Detriotification.

Mr. Magoo's picture

I dont see a problem



Ben Shalom Bernanke

gruden's picture

True price discovery... hmmm, how quaint.  How can I get one?  How long do I have to wait?  1 year?  5 years?  50 years?

All the people buying PMs hasn't pushed up the price of PMs like it should.  It's a manipulated market, rules don't apply.  When the mark-to-market rules were revoked in 2009, the market became completely untethered from reality.  Housing inventory too high?  Don't lower prices, just keep them away from the public to make sure prices stay up artificially.  The only place you can get a truly cheap house is in downtown Detroit - good luck there.

If everyone stopped buying houses, we would still need places to live.  They would simply switch to apartment dwellings and jack us that way.  I have a mortgage, but I view it as rent.  Even when the note is paid off, I only live in my neighborhood by the graciousness of my local government.  The second I stop paying protection money - er, taxes - out I go. 

Homes about the size we have rent for about the same as our mortgage.  Pick your poison.  At least with a mortgage I can paint the walls of my home any color I want without having to ask anyone.  And when the rates went down I refinanced to lower my payment.  Try that with a landlord.

Things that go bump's picture

Meanwhile, that $50,000 you and your wife have managed to save, will buy less and less as inflation eats away at it. My parents were late bloomers and didn't buy a house until 1964 when they were in their mid thirties. All their friends had owned homes for years, but they had never qualified for a loan until I was 15. They paid $17,000 for a 3 bedroom, 1 bathroom, two story home on 3/4 of an acre, on a GI loan with an interest rate between 3 and 4%. You can hardly buy a decent car for that now. They borrowed the money for the closing costs from the guy my dad worked for. I don't know where my mother found the courage to take such a risk, because she didn't have any idea how they were going to manage the mortgage payments and my mother is a cautious soul. In the late 70s and early 80s my husband and I put in offers on homes twice, but both times between the offer and the closing the interest rates went up so high that it disqualified us before we had the rate locked in. I was paying about 5 times my parents mortgage payment in rent. By that time, the bank had offered them a deal to pay their mortgage off early, because it was costing them more to service the loan then they were making on it. We finally were able to assume a loan in 1989 and paid $89,000 at 9% interest for a dumpy little place with 2 bedrooms and 1 bath and a primitive, WWII era kitchen. It had a partially finished basement with an illegal bedroom and a toilet and shower stall in the unfinished laundry area. Our house payment was $900 a month, but was cheaper than the rent we were paying at the time. My parents' mortgage payment had been around $100 a month. I made some improvements to the bathroom in the basement and when I sold in 2007 it had more than doubled in value, but it was still a dumpy little WWII era 2-bedroom rambler with a 900 sq ft footprint and a primitive kitchen. I'm not suggesting you jump into real estate, but you really ought to consider doing something to protect your savings from the ravages of inflation and the grasping banks, because if they decide that they really need that money more than you do and the government backs them, as of course it will, you will have little recourse. Though its probably not up to your standards, you could always buy some land somewhere out of the way and stick a double wide on it for little more than what you have saved up. You can always sell the double wide later and have it hauled away.

Seasmoke's picture

No problem. Wells Fargo will just foreclosure on your house as the plaintiff , even though as nothing more than a debt collecting servicer, they have absolutely no skin or standing in the game. Free house ...for the banksters !!

LawsofPhysics's picture

Not if you are current on your mortgage.  I haven't heard squat from my banker since I started paying down the principal on our last outstanding mortgage and asked him to "show me the note motherfucker".

TruthInSunshine's picture

I know that you know this already, and that we are brothers merely of different mothers, but allow me to once again compliment you on the cut of your jib.

LawsofPhysics's picture

Personally, I see more local banks/credit unions picking up some of the slack here.  People have figured out that bankers and paper-pushers are less likely to screw you if you happen to also be their neighbor (and rather well-armed).  Funny how that works.

Dr. Engali's picture

This is very true. another reason the locals are benefiting is because there is actually a face to talk to when it comes to an individual's situation. There is more to a person's story than a credit score. Plus the regional banks don't want to deal with a loan unless it's size meets their parameters. It's not worth the hassle to them.

NotApplicable's picture

Given nearly ALL mortgages are gov backed these days, a person's story matters little anymore. As one who's only ever had a credit union account, I've watched them time and again be reduced to data entry clerks.

Long story short; they can only go as far as the computer screen lets them.

Emergency Ward's picture

"No job, No income, No down-payment, No SSN, No tax return?  Nooo problem -- let's run the numbers and find out how big of a mortgage you can qualify for."

Never One Roach's picture

"...and the numbers show you're limited to no more then a $876,000 loan."

centerline's picture

All part of the journey.  Economies are going to get more local in many ways.  If the S really hits the fan hard, they will get real local, real fast.  I don't think there is any way other way this plays out.  The beast will be starved one way or another - generally from it's own doing more than effort on part of average people.  Ironic huh?

Things that go bump's picture

Those of us with PMs can hire muscle and go into the loan shark business when that happens.

ghengis86's picture

+1 but haven't we been over this before? We keep paying and they keep pretending to hold the note? It only blows up when you stop paying the servicer and then go to court to try and convince a bought and paid for judge that because the bank doesn't hold the note, they have no claim.

LawsofPhysics's picture

When you pay off the property, they produce a note pretty damn fast.  For me, I have been videotaping all

interactions with my bankers, accountants, and financial advisors.  It's truly amazing how much more "forthcoming" they are about things.

It's doesn't hurt to have a trustworthy friend and local real estate attorney on retainer either.

Dr. Engali's picture

Fuck time goes fast once you passed 50. September 2014 has come and gone and I missed it. 

Zopper's picture

the fucked up dates?

Oldwood's picture

Remember, numbers are meaningless, numbers are meaningless, numbers are meaningless. Get it?