John M.’s Post

I think the kids are OK. Using as much data from the market disclosures as I could, along with a few guesses, I had a look at the ROE on broker sourced loans at NAB. If the hurdle rate is around 6%, then broker sourced loans must have a discount that is on average more than 60bp worse than the rest of the book. Maybe this is true. Though given most new lending will come on at a discount to existing loans (their own disclosures show this), then I suspect the spread between branch and broker loans is closer than 60bp. Another swing factor is the average life of broker loans. But, given broker loans are just over 50% of the home loan book, the life of broker loans is probably not that different to the overall mean (of around 5 years). This means while the ROE for NAB was 11.7% as of March 2024, home loans have an ROE of at least 14%, with brokers a little less and branch loans a little more. The main difference will be broker commissions. But, branches come with a bigger fixed cost. And customers are going to brokers, so NAB (just like nearly everyone else) has to present where their customers are. Yeah, brokers aren't going away.

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HOLY S#!$! MMI recently released data that is mind-blowing for the loan industry. In 2023, there were approximately 550K loan officers, but close to 500K of the licensed loan officers didn't close 2 loans a month! This means that if you closed 30 loans last year, you are in the top 10% of the industry. This data supports my thesis that we could lose 30% of loan officers to start 2024 and then again to start 2025. However, this could lead to a healthy and sustainable number of around 275K loan officers in 2025. Loan officers need to embrace these changes quickly. #mortgage #loanofficer #market

New Account Originations Declined Across All Products Except Auto In February, new account originations declined across all products except Auto Loans, which rose modestly for the first time in nearly five months as high inventory levels drove incentives and promotions. Account Originations Insights: ✔️ Personal Loan originations declined the most month over month, down 0.31%. This was likely due to stricter lending requirements combined with higher interest rates. ✔️ Mortgage originations saw their fifth consecutive month of decline, while Credit Card originations fell across all generations except Silent (1928-1945), which saw a minor increase. To view the full CreditGauge report, visit the VantageScore website: https://lnkd.in/eVpUFtcy #VantageScore #CreditGauge #autoloan #credit #consumertrend #accountoriginations

📊Unlock Better Loan Options with a Strong Loan-to-Value Ratio (LTV)! Did you know your Loan-to-Value ratio (LTV) can significantly impact your ability to qualify for certain loan programs? Lower LTV ratios are often seen as less risky, which can open up more favorable lending options for you. Let's discuss how managing your LTV can improve your borrowing power! Why Understanding Your LTV Matters: 🌟 🌟 Better Loan Terms with lower interest rates 💼 Increased Approval Chances for various loan programs 📅 Enhanced Borrowing Power for future investments 📈 Lower Monthly Payments with more favorable terms Connect with Michael Larson at Accelerated Lending Group, Your Trusted Mortgage Advisor! 🌐 Explore your options with our secure online bilingual application 🤝 "Helping Families Accelerate their Homebuying Dreams" 📜 NMLS# 278522 | DRE# 01747928 P.S. I help people earn double-digit returns backed by real estate! Ask me how? #AcceleratedLendingGroup #MichaelLarson #RealEstate #MortgageSolutions #LoanToValue #HomeLoans #BorrowingPower

Banks restricting high-debt lending Lenders are continuing to put the squeeze on home loan customers with debt-to-income (DTI) ratios of 6x or higher, according to new data from APRA, the banking regulator. In the December 2021 quarter, a record 24.3% of all new mortgages had a DTI ratio of 6x or higher. Since then, the share of ‘high-debt’ mortgages has fallen in eight consecutive quarters: * Mar 2022 = 23.1% of all new home loans had a DTI of 6x or higher * Jun 2022 = 22.1% * Sep 2022 = 17.1% * Dec 2022 = 11.0% * Mar 2023 = 7.5% * Jun 2023 = 6.1% * Sep 2023 = 5.7% * Dec 2023 = 5.6% Nevertheless, the data make clear that some lenders are willing to fund some borrowers with a DTI of 6x or greater. If you want that kind of loan, speak to a broker, because they can potentially recommend a lender willing to finance someone with your scenario. #property #realestate #homeloans

Banks restricting high-debt lending Lenders are continuing to put the squeeze on home loan customers with debt-to-income (DTI) ratios of 6x or higher, according to new data from APRA, the banking regulator. In the December 2021 quarter, a record 24.3% of all new mortgages had a DTI ratio of 6x or higher. Since then, the share of ‘high-debt’ mortgages has fallen in eight consecutive quarters: * Mar 2022 = 23.1% of all new home loans had a DTI of 6x or higher * Jun 2022 = 22.1% * Sep 2022 = 17.1% * Dec 2022 = 11.0% * Mar 2023 = 7.5% * Jun 2023 = 6.1% * Sep 2023 = 5.7% * Dec 2023 = 5.6% Nevertheless, the data make clear that some lenders are willing to fund some borrowers with a DTI of 6x or greater. If you want that kind of loan, speak to a broker, because they can potentially recommend a lender willing to finance someone with your scenario. #property #realestate #homeloans

Did you know the Prime Rate is a key player in determining the interest rates for many types of loans and credit lines? From credit cards to HELOCs, variable- rate mortgages, and auto loans, changes in the Prime Rate can impact your monthly debt payments. The Prime Rate is the benchmark interest rate that banks and lenders use to set rates for loans and lines of credit. When the Prime Rate changes, so do the interest rates on these financial products. If you have loans linked to the Prime Rate, any changes will affect your debt payments. This can also influence your Gross Debt Service (GDS) and Total Debt Service (TDS) ratios—important metrics lenders use to assess your financial health and borrowing capacity. Understanding the Prime Rate and its impact can help you make smarter financial decisions. Whether you're planning to refinance, take out a new loan, or simply manage your current debts, knowing how the Prime Rate works is crucial. Reach out to us to learn how the current Prime Rate can impact your loans and discover ways to manage your GDS and TDS ratios effectively. . . #MortgageTips #PrimeRate #loans #Credit #CanadianMortgages #BrokerageWithAHeart #TCGLendingCentres Rinku Chatterjee ᴛᴄɢ ʟᴇɴᴅɪɴɢ ᴄᴇɴᴛʀᴇꜱ Mortgage Broker/ Team Lead ✅LIC# M17003036✅ ✅FSRA #13441✅ 📲PH - +1 647-994-5085 📩rinku@tcglendingcentres.com 🌐https://lnkd.in/gCbqteFJ

Banks restricting high-debt lending Lenders are continuing to put the squeeze on home loan customers with debt-to-income (DTI) ratios of 6x or higher, according to new data from APRA, the banking regulator. In the December 2021 quarter, a record 24.3% of all new mortgages had a DTI ratio of 6x or higher. Since then, the share of ‘high-debt’ mortgages has fallen in eight consecutive quarters: * Mar 2022 = 23.1% of all new home loans had a DTI of 6x or higher * Jun 2022 = 22.1% * Sep 2022 = 17.1% * Dec 2022 = 11.0% * Mar 2023 = 7.5% * Jun 2023 = 6.1% * Sep 2023 = 5.7% * Dec 2023 = 5.6% Nevertheless, the data make clear that some lenders are willing to fund some borrowers with a DTI of 6x or greater. If you want that kind of loan, speak to a broker, because they can potentially recommend a lender willing to finance someone with your scenario. #property #realestate #homeloans

Is Consumer Credit Health Trending Up? Originations Rose and Delinquencies Continued to Drop According to April 2024 CreditGauge™ New accounts in Credit Cards and Personal Loans saw a significant increase in April, following three months of decline. Credit Cards rose 0.24% to 3.2% and Personal Loans rose 0.41% to 2.50%, outpacing other products. Auto Loan originations climbed for a third straight month, signaling a possible shift toward easier borrower qualifications for car loans amid a tough consumer credit landscape. New mortgages rose by 0.03% compared to the previous month as the spring buying season began. Read the full April 2024 VantageScore CreditGauge here: https://lnkd.in/eVpUFtcy #VantageScore #CreditGauge #credit #personalloan #creditcard #autoloan #mortgage #finance #originations