The Wall Street Journal Writes: Banks Cut as Mortgage Boom Ends
A sharp slowdown in mortgage refinancing is forcing banks to cut jobs, fight harder for a smaller pool of home-purchase loans and employ new tactics to drum up business.
The end of a three-decade period of falling mortgage rates has slammed the brakes on a huge wave of refinancing by U.S. households. The drop-off has deprived lenders of a key source of income at a time when the growth in loans for home purchases remains weak.
The Mortgage Bankers Association next week plans to cut its 2014 forecast for loan originations, which include loans for home purchases and refinancing. The current forecast of $1.2 trillion would represent the lowest level in 14 years. The trade group Wednesday reported that mortgage applications in the two weeks ending Jan. 3 touched a 13-year low.
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With the 10-Year Note being just a few clicks away from 3% (up over 100% over the last 1.5 years), this should come as no surprise to anyone.
As predicted in my earlier post “I AM CALLING FOR A REAL ESTATE TOP HERE” , the real estate market is in process of rolling over. Listen, as far as I am concerned this is incredibly easy to see and I am having an increasingly difficult time understanding how most people don’t see it. This is reminiscent of me predicting the 2007-2009 collapse in the credit markets starting in 2006.
Alex Dvorkin In Early 2006: Listen guys, this credit market is about to blow up and will take the housing market, the stock market and the entire economy down with it.
Everyone Else: “Alex, why don’t you just fuck off…… You don’t know what you are talking about….. Keep this up and everyone will know you as the “Boy Who Cried Wolf”…. and my personal favorite “My 88 year old broker who has seen the Great Depression is saying NOW is the buying opportunity of a lifetime”.
Right. If you are dumb enough to buy real estate in today’s market, you will get fleeced. Big time. Those who believe real estate always goes up need to go back to as recently as about 1994 to see how people felt about the housing market. Remember something very important. Today’s higher prices have nothing to do with the fundamentals and have everything to do with the massive speculative environment in the credit market. It’s fake….its not real….it is an illusion at best that is about to blow up.
As I have said many times before, stage 3 (upcoming stage) of any bear market is the most severe. Get ready. As I have predicted, the market is already rolling over.
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Warning: Real Estate Collapse Stage 3 Is Beginning To Accelerate