Video Closed Captioning:
good morning good afternoon good evening
folks michael zuber one red cellar time
back with his good friend and friend of
the channel matt the morgues guy how you
doing buddy doing great live from las
vegas yeah so you know what you and i
called something gosh six months ago we
said refi demand would eventually
collapse 75 it was down 78 this morning
according to mortgage bankers
association so i just wanted to kind of
pick your brain and kind of talk about
the future again
and as an outsider
i can just generally say hey i think
it’s going to be smaller right we’re
seeing layoffs and all of that so that’s
kind of a layup i think you have insight
that it’s really going to be changing
and evolving not only getting smaller
but getting leaner and meaner so what’s
going on you think in the mortgage
market over the next i don’t know six to
12 months yeah i mean we’ve already
started to see it and it makes sense if
you know when i say it out loud people
go okay that makes a lot of sense you
know as the market shrinks as competit
and you know competition gets fierce
the big boys are gonna win some of the
smaller fish are going to go out of
business or consolidate with other small
fish to create something that’s
sustainable through a tougher market
nobody’s should be lying and saying like
the next 12 or 24 months are going to be
easy in mortgage it’s going to be hard
when you go when you come off of back to
back championships
and you know
some of your star players lose you know
all the refinance is gone
and so um
we’re starting to see some interesting
stuff too um the the humda data on
on mortgage applications i didn’t know
they were collecting
cost data but apparently they’ve been
collecting cost data which shows
you do
a mortgage in the retail channel
it might cost eight thousand or eighty
five hundred dollars i don’t know the
exact figures but i’m gonna look it up
for a video that i’ll do on my channel
on the broker side it’s like two
thousand to twenty five hundred so it’s
cheaper to do a loan on the broker side
so the brokers
pass that savings loan to consumers
you know they’re doing it
faster and cheaper not only are
you know all these consolidations
happening but i’m seeing
more consumers more loan originators
moving over to the broker channel
because they can offer
the same product at a discounted price
right and so
besides the moving and shaking of
companies
as the broker channel has grown
you know from its low of eight to ten
percent of originations
i think we’re in the 20s now i see that
growing even more and then i read news
from
you know the ceo of wells fargo that
says hey we’re going to downscale our
mortgage operations we’re going to shut
down you know some of our
offices and different metros and whatnot
they have got so many other things they
make money off of they’ve realized
they’re no good at mortgage sorry wells
fargo but none of the big banks like old
antiquated bank systems are just not no
they’re not built for you know the new
environment and and so over the next few
years it’ll be interesting to see you
know smaller companies go out of
business or consolidate
low producing loan originators the same
they’re going to either go out of
business do something else join a team
as a junior lo or whatever the case may
be so all that stuff is going on and
then with
margin compression and competition and
other things going on i think the the
broker channel grows gets to 30 plus
probably yeah there there’s um you know
a little bit of shrinkage in retail and
then a large shrinkage on on the bank
side yeah partly because they just don’t
want that right they can do credit cards
and business loans and all the other
things that make them money and that
they’re known for right and you know
mortgage for banks
from what i’ve seen are just to retain
so they can get those other services
they don’t really want to ride them yeah
yeah the other thing i think it’s
interesting i i wish i remember the
company there there was another very um
popular youtube channel that talked
about and a mortgage originator who just
went out of business or bankruptcy i
forget the name
but basically there’s a lot or at least
that video was kind of pushing the idea
that oh my god look banks are going to
go out of business just like last time
you know you know washington mutual
countrywide indymac wamu all the it’s
it’s nothing like last time right we’re
not talking about banks we’re talking
about originators right these don’t have
loans or they don’t have savings
accounts and checking accounts and
things of that nature
but loan like companies that were built
to be loan originators some of them are
going to go out of business right you
were built for a model where you might
do 100 million in loans and now you’re
going to do 35 your cost structures all
out of whack you should go out of
business right
right right yeah that’s the thing too is
is a lot of folks have evolved and
they’ve changed business structures and
they’ve done the things that make the
cost to originate a loan thousand twenty
five hundred dollars the other ones you
know were
cost so much you can’t have all that
cost built in expect the consumer who
now has access to way more than they did
ten fifteen years ago as far as like
you know
data and being able to say oh i don’t
think six percent’s a good rate for this
five percent down conventional you know
yeah on the broker side for five and a
quarter um those folks are going to have
a hard time in the next 12 or 24 months
yeah i’m trying to remember the video i
watched it last week i think it was
another point in that video they were
talking about loan depot loan depot’s a
public company right
correct yeah yeah i think they were
trading at a dollar or something like uh
they’re really cheap
yeah now i mean and and that too lone
people is a big company yeah it was a
big strong company if uh
if if they ran into trouble um you know
that that would be scary but i was i i
wouldn’t be surprised right because like
i just hired somebody um
to help with with setting up files
like high quality yeah they’re a dollar
43 stock yeah um high quality people are
being let go every day from these from
these companies that just that they have
to do layoffs they have to get as thin
as possible just to be able to compete
and survive yeah but i want to talk
about loan depot because again the the
the
story in the video that i watched was
basically hey loan depot is just like
another big bank and lone deep was going
to go out and it’s going to be a
cascading of horrors
and you i don’t know loan depot’s
business other than what i researched in
20 minutes but basically they’re alone
originally they’re not they don’t have
savings accounts and check-ins accounts
they’re not having cds they’re not a
bank they’re not wells fargo they’re not
citigroup they’re not jp morgan right
right yeah they’re there’s a loan
originator i’m i’m almost certain they
have a retail side probably
yes but they’re not a traditional bank
right so when you’re when people are
popular folks are saying loan depots
just like wells fargo that is factually
incorrect and misleading
yeah i mean and you know what’s funny
you mentioned that mike because i i
can’t remember what i saw but it was
like this company consolidated with this
company this company filed for
bankstreet this company this like the
small players you know loan originators
are going to consolidate or go into
business and all that stuff um but to
your point people were trying to compare
that to the explodo meter yeah i
remember crash yeah where it’s like this
every day you get news with somebody
else uh going out of business blowing up
yeah not quite the same but no but but
you’re gonna have again so when i look
at the mortgage origination business we
talked about this months ago right you
did six trillion dollars or whatever it
was last year you’re gonna do three and
a half this year or something something
really and guess what the business will
be smaller right the overhead that was
built to run six trillion is not the
same overhead not the same companies
that you need at three and a half it’s
just not you’re the industry will be
smaller
right yeah i think i think it’s like 4.2
down to two and a half so yeah it’s a 40
reduction um
which
you know purchases
are going to be down slightly but not
much refi is down
and so like all this humongous expansion
where there there’s lenders mike that i
talked to i talked to the guy
um at home point they went from 250
million a month and they’re big they’re
like number two in the nation to 10
billion a month they’ve 40 x to their
production so
like average year and then 2020 2021
those years we’re like you shouldn’t
even we shouldn’t be comparing like
we’re gonna expect to have four trillion
in originations uh every year those were
outliers now we’re back to reality yeah
and two and a half trillion is a is a
pretty gosh darn big yeah if you remove
if you remove 20 and 21
you know two and a half two six that’s
that’s you know within 10 of kind of
normal range right
yeah exactly yeah yeah where i think
actually 2022 was projected to be bigger
than 19. wow so yeah okay larger than
average year even though everyone’s like
oh my gosh down 40 what’s what are we
what’s going to happen well all the
extra staff that you had to get to to do
all this refinance and that goes from
like every level from company you know
to to regions and branches even to the
original like the loan officers that had
three assistants
maybe you only need one yeah
yeah so at the end of the day i i just i
was really bothered by a video that was
trying to connect loner originators
with
washington mutual and
you know these other institutions that
were real banks a loan originator who
was built even if they’re public
it’s not it’s not a bank it’s just not a
bank and to have people say that it is
is
it’s not helpful but again i think the
industry’s smaller i think it’s really
insightful that wells fargo would make a
economic decision right charlie sharper
i think the ceo is like hey we’re not
good at it
you know he has enough problems
uh fixing the bank he’s like we’re just
gonna that’s a loss leader for us that
we just don’t need
let’s do something else so again i think
the mortgage industry has uh 12 to 18
months of pain it’ll come out leaner and
meater meaner on the other side of it
the good news for the consumer
everyone’s going to compete so you’re
going to get the best deal also all the
people that aren’t very good at it will
get out of the business because they
won’t be able to survive so you’re going
to have the best originators writing you
the best loans with the best terms with
the best companies
it’s good for consumers i agree and if
somebody wanted to reach out to you and
be see what’s going on how would they do
that go to greatmortgagebroker.com fill
out the form let us know where you’re at
how we can help and we will be in touch
and you also have a great youtube
channel which is oh yeah go to math
moore’s guy on youtube 650 plus videos
um it’s really cool when i hear somebody
go you know what i just stumbled across
your channel i watched 24 videos
yesterday i learned so much uh you know
from from other loan originators to
consumers
everybody in between um i want to i want
to get back to some of the the true
educational content that’s on there
which um so many people want what’s
going on the market and all that other
stuff that i’ve got to mix that into
yeah it’s it’s there’s so much changing
it’s hard to stay current and educated
right yeah
i throw in a video where it’s talking
about restricted stock unit income and
other stuff it’s just not as exciting
it’s it’s it’s good education so if if
there’s a question that you want
answered on the mortgage side and you
type in that question matt the mortgage
guy and i don’t have a video on it ping
me and i’ll make you one there you go
thanks buddy i appreciate you thanks
mike