The "Housing Recovery" Is Complete: Major US Banks' Mortgage Originations Tumble To Record Low

Tyler Durden's picture


Not much to add here that we haven't already said before about the state of demand for housing by the ordinary American.

First it was Wells Fargo:


Then it was JPMorgan:


Then it was Citigroup:


And now, it is Bank of America.

Remember when bank success (and profitability) depended on them lending such trivial things as mortgages so they could arb the Net Interest Margin (which incidentally also tumbled to a record low for Bank of America)? Good times...

In other news, the "housing recovery" is now complete.

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Wed, 04/16/2014 - 10:14 | 4664860 Caveman93
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In case we forgot...

Definition of 'Green Shoots'

A term used to describe signs of economic recovery or positive data during an economic downturn. The term green shoots is a reference to plant growth and recovery, and has been used during down economies to describe signs of similar growth.

Wed, 04/16/2014 - 10:21 | 4664898 Battleaxe
Battleaxe's picture

Bad news is good news! For the QE sucking wall street banks that is. Keep it coming so they can game the markets and HFT circle jerk themselves to riches!

Wed, 04/16/2014 - 10:31 | 4664931 Pladizow
Pladizow's picture

Bortherly Chekoslovakia has been NORMALIZED!

Wed, 04/16/2014 - 10:35 | 4664949 I am more equal...
I am more equal than others's picture




Breaking the numbers down would enhance the understanding of how bad it really is.

How many loans are re-fis?

How many loans are purchases of new homes?

Home many loans are for existing homes?

Home many loans for for second homes?

KB Homes and DR Horton, et al - about to test lower bounds of their trading range?


Wed, 04/16/2014 - 10:46 | 4665001 SumTing Wong
SumTing Wong's picture

Can we fly the "Mission Accomplished" banner over Detroit??? GWB loved that banner!

Wed, 04/16/2014 - 10:58 | 4665060 SamAdams
SamAdams's picture

A home for everyone, and everyone in his home.  So get out of your parent's basement and enjoy the American dream!

Wed, 04/16/2014 - 11:18 | 4665144 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

What!? Artificially juicing the market may result in a later crash? Phhhh! Whatever!!!! 

-Bankster spokesman

Wed, 04/16/2014 - 12:34 | 4665471 Son of Loki
Son of Loki's picture

Price cuts galore !!! 10% discount on the house !!

[after builders and sellers quietly hiked listing prices 20% up in February]

Houses are still seriously overpriced to the tune of 40-50% [sadly] in many many locations. Reversion to the mean is going to be a Bitch.

Wed, 04/16/2014 - 14:40 | 4666111 NihilistZero
NihilistZero's picture

2015=2008.  Prices are the LAST indicator (hence confirmation) of a crash.  All this data on mortgage originations and sales volume is exactly what we saw in 2007 (if not worse).  The correction will be a bitch for specuvestors but great for the banks as they'll be quite profitable as the downturn leads to greater affordability and the high interest rates create greater profitability in the mortgage sector.

2012-2013 was the mother of all dead cat bounces.

Wed, 04/16/2014 - 11:35 | 4665208 toady
toady's picture

I glanced something about a new website for Detroit real estate that will try to move the thousands of $1 abandoned houses. Maybe this really is a bottom...

Wed, 04/16/2014 - 12:16 | 4665393 j.tennquist
j.tennquist's picture

Yes, the city of Detroit is trying to cash in on the folly of home ownership, even in a city where the natural cause of death is a bullet or a beating. 

Yes, you too can own a home for $1.00, title and all 

You have to pay all back taxes, liens, re-incorporation fees, inspections, upgrades, city municipal fees for water and sewage, any penalties for non-comforming pets (rats and roaches), and you are responsible for evicting squaters (read: close down the crack house)


Wed, 04/16/2014 - 14:56 | 4666209 toady
toady's picture

You have to pay all back taxes, liens, re-incorporation fees, inspections, upgrades, city municipal fees for water and sewage, any penalties for non-comforming pets (rats and roaches), and you are responsible for evicting squaters (read: close down the crack house)

Nothing that a decent real estate lawyer& property management couldn't handle.  I wouldn't actually live there!

Real estate lawyer nullifies the back taxes,  liens,  etc. 

Property management kills off the roaches, rats, & squatters. 


$300 for 300 houses, property management gets half,and takes care of the lawyers out of their end, leaving half for me.


Wed, 04/16/2014 - 11:36 | 4665214 corporatewhore
corporatewhore's picture

i wish i had that banner. or maybe on a t shirt

Wed, 04/16/2014 - 11:44 | 4665258 thamnosma
thamnosma's picture

DR Horton has just begun construction on more ugly cheap-ass condos (masquerading as high quality residences with all those flags) in my community, which is already overbuilt and for some reason seeing an explosion of new crap housing on marginal "next to freeway" lots that have sat for decades.  I have zero idea what business sense this makes, but I suppose they do.

Wed, 04/16/2014 - 12:00 | 4665350 seek
seek's picture

DR Horton gets paid to build shit. The bankers get paid when they finance shit.

Fed gives banks free money, bankers write loan to DR Horton, and pocket their fees for the loan.

DR Horton builds crappy condos, pockets fees for building, and profits if they actually sell one to a sucker.

DR Horton goes BK, it falls back on bank who gets bailout via taxpayer. Sucker goes BK, it falls back on Fannie/Freddie who gets bailout via taxpayer.

All of this makes great business sense if you're a banker or homebuilder. If you're a taxpayer it's insane.


Wed, 04/16/2014 - 11:52 | 4665319 Bunga Bunga
Bunga Bunga's picture

Get over it, in central planning economic fundamentals do not matter.

Wed, 04/16/2014 - 10:34 | 4664941 Groundhog Day
Groundhog Day's picture

Who needs NIM when you can simply borrow for free and win everyday in the casino......and if you lose in the can cry foul and get your money back.

Wed, 04/16/2014 - 10:41 | 4664974 johnconnor
johnconnor's picture

guys, the economy is so "green" that families don't even need to borrow money to buy houses.... FOWARD!

Wed, 04/16/2014 - 11:43 | 4665254 Stuck on Zero
Stuck on Zero's picture

I disagree.  I think everyone is happily living in a desired home now with a comfortable job and has no desire to relocate. 


Wed, 04/16/2014 - 10:55 | 4665045 Iam_Silverman
Iam_Silverman's picture

"The term green shoots is a reference to plant growth and recovery, and has been used during down economies to describe signs of similar growth."


"In the spring, there will be growth" Chancey Gardener.

Wed, 04/16/2014 - 11:24 | 4665165 therearetoomany...
therearetoomanyidiots's picture

+1 for Being There quote

Wed, 04/16/2014 - 14:02 | 4665957 Jumbotron
Jumbotron's picture

Yellin......where's my fucking QEternity back ??!!

Wed, 04/16/2014 - 10:14 | 4664868 LawsofPhysics
LawsofPhysics's picture

Please, BofA doesn't need to make loans or do any actual work with a gun to the taxpayers head and the ability to outright steal property.

hedge accordingly.

Wed, 04/16/2014 - 10:39 | 4664965 Okienomics
Okienomics's picture

At the risk of incurring the wrath of my fellow ZHers for admitting it, I do business with BofA (oh the shame of it!).  So I will write a bit of intel on them.  I own a rental prop in the heartland with 10years left on a mortgage originated with BofA at just over 5% API.  I receive at least weekly letters and even calls to refi it - a rediculous amount of glossly paper and lovely card stock is spent trying to get me to refi.  So I guess that qualifies as actual work, and in my case, at least, they're working hard but not so much smart.

Wed, 04/16/2014 - 10:50 | 4665012 LawsofPhysics
LawsofPhysics's picture

I have been recieving simlilar refi offers. These can all be boiled down to "please, let us collect more fees and interest from you in exchange for all our paper printing and paper-shuffling".

The bottom line is, what is the real value of all their "labor".

Surviving and surving well is all the people (and Nature) really give a shit about. Many waking up to what their "lying eyes" have been telling them all along.

Exponential equations are a bitch and mother Nature and the Laws of Physics bats last motherfuckers...

hedge accordingly.

Wed, 04/16/2014 - 11:46 | 4665275 thamnosma
thamnosma's picture

The laws of physics were repealed on 9/11/2001.

Wed, 04/16/2014 - 10:57 | 4665058 Ban KKiller
Ban KKiller's picture

So...who really owns the note? Not BofA, that is for sure. 

IF you are can ask them to validate the debt according to your state laws. 

Who has the right to enforce the note according to your states Uniform Commercial Code? 

IF you do write to them they will freak is kind of a sport to fuck with banks, at least for us sick folk. Ha-ha. 

Wed, 04/16/2014 - 11:03 | 4665080 NotApplicable
NotApplicable's picture

According to most state Attornies General that I see in the news, they don't give a fuck about the mess called MERS as long as they get their billion in loot from Linda Green's hide.

Wed, 04/16/2014 - 11:40 | 4665235 corporatewhore
corporatewhore's picture

as a mers victim, i can attest that judges eyes glaze over and they become transfixed on their retirement and payscale knowing full well the generous support of the housing industry and banks.

they don't understand it and if they don't understand it and can pooh pooh it away they'll do just that.


no one owns shit in this country due to mers.  violates 500 years of real estate law.  utter travesty of land rights.  and you're right no one cares til it happens to them

Wed, 04/16/2014 - 11:47 | 4665285 thamnosma
thamnosma's picture

For a second I thought you were talking about the Middle East Respiratory Syndrome.

Wed, 04/16/2014 - 12:00 | 4665349 waterhorse
waterhorse's picture

or the Michigan Employees Retirement System?

Wed, 04/16/2014 - 11:43 | 4665257 waterhorse
waterhorse's picture

They'll retaliate with forced-place insurance, putting your payments into "suspense" funds and declaring you late, billing for bogus late charges or putting you on the robo-dial to get a call every 10 minutes saying they haven't received your payment and send you harrassing letters.  How dare you question their standing!  Even if you do, 99% of the "just-us" system is rigged in favor of the fucking banksters.

Wed, 04/16/2014 - 14:43 | 4666104 daveO
daveO's picture

'The $6.3 billion settlement with the FHFA, and concurrent agreement to buy $3.2 billion in RMBS from Fannie Mae and Freddie Mac at fair market value, was the latest in a serious of huge settlements.' 

 'Bank of America in January 2013 agreed to pay Fannie Mae $3.6 billion in cash and pay another $6.75 billion to buy back 30,000 mortgage loans. Then, in December, the bank agreed to pay Freddie Mac $404 million to settle claims on all loans it sold to Freddie through 2009. 

Unresolved mortgage putback claims against the company totaled $20.3 billion as of March 31, increasing 19% from a year earlier. That figure represents the unpaid principal balance on loans the company may have to repurchase, and not the losses it would take. Mortgage repurchase reserves totaled $13.4 billion as of March 31, but that includes the $8.5 billion yet to be paid out to the private investors covered under the July 2011 settlement.' Marketwatch

Looks like they're fixing that problem. Once they buy those loans back CHEAP(fair market value), they'll crank up the foreclosure mill.
Wed, 04/16/2014 - 10:51 | 4665027 Ban KKiller
Ban KKiller's picture

Yes. People are basically honest. They know they have missed some mtg payments. So...the bank would not lie about their standing now would they? Yes, they do. EVERY SINGLE TIME. People project their honesty on the banks and attys. 

Once you realize ALL that they, the banksters, say is a lie, it is easy to destroy their claim.

Fight foreclosure with education. Banksters have no standing to foreclose. 

Wed, 04/16/2014 - 10:17 | 4664882 foodstampbarry
foodstampbarry's picture

How will the Obama cultists spin this? Tune into cnbs, should be fun!

Wed, 04/16/2014 - 10:31 | 4664883 Rainman
Rainman's picture

Just look at that, Larry ....this is what happens when mortgage rates rise 50 bps .

Wed, 04/16/2014 - 10:17 | 4664884 babylon15
babylon15's picture

Nobody needs a mortgage anymore, nowadays they just use all their profits from going levered long TSLA and NFLX to pay with an all cash transaction.

Wed, 04/16/2014 - 10:37 | 4664951 101 years and c...
101 years and counting's picture

correction:  you no longer need to PAY your mortgage.  the Fed is buying all delinquencies and taking the losses and passing them to the US Treasury.  Socialism fucking rocks.

Wed, 04/16/2014 - 11:40 | 4665240 Atticus Finch
Atticus Finch's picture

Actually, nobody really knows what socialism looks like. Just like nobody knows what communism looks like. In the Soviet Union, it was Lenin/Stalinism but Marxism? Not so much.

In the US, so much is spent on making war by invading countries that are absolutely no threat to the US, that we really don't know what the effect of allocating those trillions in war spending might have to the improved the life of evey American, We have never seen a socialism where the trillions that the Fed handed to both national and international banks and corporation might have been handed instead to American citizens. Or the socialism where HUD, VA, FHA, Fannie Mae, and Freddie Mac weren't narco money laundering operations.

My point is the Socialism is a smear by the Oligarchs as an agent of fear and loathing as they loot Social Security and smash other social programs for the benefits and entitlements of transnational banks and corporations, while the rest of us whither to nothingness and all the while cursing the threat of Socialism.

Wed, 04/16/2014 - 11:47 | 4665283 waterhorse
waterhorse's picture

The oligarchs seem to be the only ones enjoying "socialism".  For everyone else, it's on-your-own rugged individualism.  Now when is the next bankster bailout?  They're so deserving.  Fraud is such HARD work.  Doing "God's work" isn't easy, you know?  That's why Jamie Dimon is richer than YOU.

Wed, 04/16/2014 - 12:26 | 4665441 Ban KKiller
Ban KKiller's picture

"Corporate welfare" indeed. 

Wed, 04/16/2014 - 10:28 | 4664917 mayhem_korner
mayhem_korner's picture



Wake me when the number of living BofA executives tumbles to a record low.

Wed, 04/16/2014 - 10:29 | 4664919 Bay of Pigs
Bay of Pigs's picture

Plow them under already...and start the hangings.

Wed, 04/16/2014 - 11:48 | 4665288 waterhorse
waterhorse's picture

Can Angelo Mozilo go first?

Wed, 04/16/2014 - 10:31 | 4664929 youngman
youngman's picture

What is funny to me is that in the meetings of the Fed...they think they knew what to do to start the housing recovery by dropping lending rates.....that was their idea...and it seems to have failed....just having low rates will start the rush they thought....what do they talk about now???___  whats for lunch....what great new idea are they going to

Wed, 04/16/2014 - 10:50 | 4665020 Okienomics
Okienomics's picture

Respectfully disagree.  The Fed has achieved their goal.  RE values are up, which was the qualifier for a "housing recovery."  I heard a speech by a Fed economist (staff level) and she was touting the strength of real-estate value recovery in the mid west.  This was last year.  In the Q&A I asked her if she thought RE valuations would be sustainable once the Fed withdrew $65B/mo of QE from the real estate market and, I kid you not, she waggled her finger at me and spoke about something else, basically ignoring the question.  Housing Recovery aka Higher MTM on financial firm's balance sheets which is defined by accountants as Profit and the prerequite for avoiding bankruptcy.  Mission accomplished.

Wed, 04/16/2014 - 11:44 | 4665260 novictim
novictim's picture

I sort of agree that the Fed reached its goal.  

When you have a system where staff and elected office holders merely need to create a temporary facade of success in order to land that high paying private sector job ("Revolving Door"-a form of quid pro quo bribery) then even an UNSUSTAINABLE propping up of apparent home values is sufficient.

That 85% of homes are considered unaffordable by time honored income to mortgage ratios (and by the over-leveraged, house poor home buyer who is one pink slip away from ruin).

This whole system can come tumbling down a month from now and the former elected folks who authored this mess and who already cycled through the system to a high paying private-sector job will just say "Ya, but look at how good it was while I WAS in office!".  They will emphasize the past with nary a blush.


Wed, 04/16/2014 - 12:03 | 4665361 Dingleberry
Dingleberry's picture

we see what happens when rates creep near 5%.......the RE market freaks the fuck out.

the die has been cast. Prices are propped by easy/cheap money. 

no turning back now. 

And as long as prices are propped up, the all cash market will continue unabated as well, since fewer are qualifying for conventionals anyway.

Wed, 04/16/2014 - 10:31 | 4664932 The worst trader
The worst trader's picture

Bullish! back up the truck and BTFATH

Wed, 04/16/2014 - 10:32 | 4664935 max2205
max2205's picture

Trading desks still batting 99.99%

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