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Industry trends: Expansion in a Contracting Market

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  • Adjustable mortgage rates at record lows « M | | 26 Nov 2011, 07:18 AM Agree 0
    [...] This is linked to #1 above.  Regulation is a tax.  It is an increase in the cost of doing business.  The more taxes rise, the more regulation there is, the more it costs to have the necessary people to perform the paperwork.  The more those costs rise, the harder it is for the small player to afford to continue, and the more small players will look for behemoths to ally themselves with.  Once I was a single-originator brokerage, with 30 broker channels for my mortgages.  That’s essentially impossible now.  So right along with increasing regulation you get increasing contraction in the industry.  Innovation is where you get small players taking on the big boys, but since product innovation is difficult in a regulated environment, and since this is a spectacularly regulated environment, expect the Bank of Americas to get bigger, and Joe’s Mortgage to join or die.  Of all my forecasts, this one hurts me the most.Source: thenichereport.com [...]
  • Mortgage Rates in the US Decline With 30 « M | | 26 Nov 2011, 08:15 AM Agree 0
    [...] This is linked to #1 above.  Regulation is a tax.  It is an increase in the cost of doing business.  The more taxes rise, the more regulation there is, the more it costs to have the necessary people to perform the paperwork.  The more those costs rise, the harder it is for the small player to afford to continue, and the more small players will look for behemoths to ally themselves with.  Once I was a single-originator brokerage, with 30 broker channels for my mortgages.  That’s essentially impossible now.  So right along with increasing regulation you get increasing contraction in the industry.  Innovation is where you get small players taking on the big boys, but since product innovation is difficult in a regulated environment, and since this is a spectacularly regulated environment, expect the Bank of Americas to get bigger, and Joe’s Mortgage to join or die.  Of all my forecasts, this one hurts me the most.Source: thenichereport.com [...]
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