WEBVTT
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Mr.
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Scott Olsen, here you are again.
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Good morning.
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Great to be back on.
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It's great to see you, sir.
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Executive director at the CHLA Community Homelanders of America, a very important dude in mortgage.
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Have you ever been called a dude before?
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No.
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Do I need a hat?
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I was in Big Sky, Montana, two weeks ago.
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I should have brought a cowboy hat.
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How was it?
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How was Big Sky?
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It's amazing.
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I recommend going there.
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Um had you had you been before?
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No, no.
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Uh friend, uh, we were in we've travel with my family every summer, my kids and their significant others, and we take a trip out west.
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Last year was Banff and had a friend out there, and they recommended Big Sky.
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So we said, okay, we'll give it a try.
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What was the best part about it?
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Just the well, I guess the yurt.
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We took a truck up to the top of a mountain and they did a little fancy dinner, and we had great views, and the food was amazing.
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But the hiking, I guess.
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Excellent.
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All right.
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Well, it's great to see you.
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It's been a while.
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It has.
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Too long.
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We have a lot to we have a lot to talk about.
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You you're uh you're a busy man at CHLA, of course.
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Uh CHLA.
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It's a busy time.
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There's a lot going on.
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Yeah.
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So you you all are one of the bigger trade groups in the mortgage industry.
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So we'll throw throw that qualifier in there.
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And um there's a lot to talk about here.
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You know, we're gonna get into um condos, uh, and we're gonna talk about Ginny May and liquidity because there's some concerns there and uh a bunch of other things, you know, breaking through the noise.
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And lastly, we are gonna talk about the CFPV, but I have my own little list.
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That that's your list.
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I have my list.
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Okay, all right.
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So I've got my own little list, and I, you know, of course, I go first because I'm the host.
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Exactly.
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You drive the agenda, you drive the agenda.
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I I'm driving the bus here.
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Um great disadministration so far on housing.
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Uh B plus, A minus.
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I think they've, I mean, the good news is we've been stuck, I think, for many, many years in this bipartisan quagmire where both sides had sort of uh created a standoff and and Congress was split a lot of the time.
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And so we weren't seeing action, even the low-hanging fruit.
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And you know, I'm not saying that I think everything the Trump administration has done has been good, but they've been very receptive on a bunch of things.
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They bought, they they instructed Fannie and Freddie to buy mortgages to help try bring down rates.
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We've been pushing for that.
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They made reforms to the CFPB, you know, regulatory process.
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Um you know, so they've they've I could go on, but they've been that seems like an aggressive grade.
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Why do you say that?
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I mean A minus, B plus.
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You know, look, I don't I never reached those grades in school, so I uh but I'm guessing that's in the 90% range.
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So I mean that leaves just a little bit of window that they could be better.
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And uh yeah, so well, I've never graded an administration less than a B anyway.
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So just you understand in my position, you know, we're always gonna look at things from a slightly rose-colored.
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I'm on the I'm on the air.
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I'm on the air, Greg.
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I'm on the I need a I need a comp, Scott.
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How do you grade the Biden administration, the one that's already done?
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Uh how would you grade that?
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I'd say uh B minus.
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Um still, I'm still in the B area.
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I I the problem, I you know, I think that the problem was that uh Joe, not not what Joe Biden did, per se, I don't want to get into that, but that he he didn't really have a housing background.
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He the the people he didn't bring a bunch of people with him that had been long-standing people in housing.
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And I think that was uh, you know, his his interests were elsewhere, like foreign affairs and things like that.
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So well, who in this administration knows housing?
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Because it's funny you should say that.
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This is one of the questions I had on my list.
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So you're you're you're scratching my you're scratching my itch here because uh I don't know, does does uh Director Poulty I mean he knows building, but does he know the mortgage business?
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Like the you know, one of my questions is just overall, is there enough mortgage acumen in Capitol Hill?
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And if so, who is it Elizabeth Warren?
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So I guess I would start off by saying that everyone wants to talk about the big showy picture stuff.
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And I would say there's an there's a lot of uh very competent people in in the agencies, like uh Joe Gormley at Ginny May is outstanding.
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Um Matt Jones is over at FHA.
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Um these these these matter.
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I think uh FHFA, it's a it's yes, uh Poulti is in charge, but it's a collaborative process where you have Fannie Mae, Freddie Mack, um senior staff that's been around for a while.
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It's a it's a continuation.
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So um, you know, I think the CFPB has been the most um difficult to follow because they were run by the head of OMB for a while, and now they're trying to get a permanent director.
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And so, you know, uh, but they but they clearly understand the issue.
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So yeah, I mean I I I think when it comes to the people in the trenches at the key agencies for our members, I think there's a lot of very qualified people.
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You talked about the CFPB.
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My understanding is no enforcement actions in 2026.
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Is that your understanding as well?
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Well, I don't know whether there's none.
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Uh there's clearly it's been a different perspective.
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I I think that the um, you know, that's one half of the equation, which is that um they they obviously, I mean, I think they're moving towards a lot of the things that we've been arguing for years, which is number one, it shouldn't be based on did you ticky tack violate some rule, but whether there's consumer harm.
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Number two, uh there shouldn't be regulation by enforcement.
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Number three, some of these rules that the Biden administration, one of the reasons I gave them a B minus, they were doing some rules that were absolutely redundant for IMVs.
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They took those out.
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So, but but obviously it doesn't mean that this goes away, it just shifts to the states.
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Yeah.
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I mean, I I I think when you compare Biden to uh this administration, the bar was pretty low.
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Having said that, there have been some significant things that have happened.
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Uh I look at uh how they attacked uh FICO and you know they insisted on, you know, Poulte insisted on competition there with vanta score, which is gaining adoption.
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Yeah, that's good.
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That's super positive.
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I guess where I get stuck, and maybe you can clear my head on this, is the levers that they could be pulling in terms of affordability that they're not.
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More specifically, uh G fees and really LLPAs.
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That's something that's something that they could do for they could just do a carve out for first-time home buyers and wave LLPAs, for instance.
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Do something with them, even even give a small little window where you do that for six months and then we measure like something like that.
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And I understand my opinion is that they didn't do that, um they didn't do that when Barry Habib was leaning in on it as a member of Fannie Mays on the board because they were really considering strongly taking the um agencies out of conservatorship.
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Well, now we're two years in, we're probably gonna have uh you know Democratic House.
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So it's uh it doesn't look like that's gonna happen.
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Um so if that's not gonna happen, if they're not coming out and they don't necessarily have to justify them coming out by ringing the rest register and showing this big number that brings in a nice uh attractive amount of money from the public markets, then why not do that?
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Like that this is where I wonder if they know what they're doing, because like if they really want housing to get behind them, that's something that they can do, Scott, right away that will make the president look like an absolute champion for those that are on the outside looking in.
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I well, totally agree.
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I've uh you must uh I think we someone handed you our hymnal.
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I mean, we were fighting early last year for cutting Gulling, cutting LLPAs on manufactured home loans, on condos, and on high cost loans.
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Um, and and we really made a big splash of that with our Gen Z report a couple months ago, which we featured in when we rolled it out.
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That, you know, for it's the high cost loans, it's uh, you know, they are not because they're risky.
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They're they're they're higher LLPAs because some people in Washington don't want to see uh loans in you know higher cost areas.
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Well, it's ridiculous.
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You know, we I pulled up a um a uh$720,000 home in like Kansas or Wisconsin, I think it was in rural Wisconsin, uh$750,000, uh 5,000 square feet, six bedrooms, whatever.
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So that's okay.
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But then I pulled one in, I think it was Calabasas, California, in the valley, uh, 1,300 square feet, not even a starter home, probably needed some work, and that was 850.
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And that's a starter home.
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And so there's just no reason in these high-cost areas that we should be discriminating against these loans.
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And so we'd like to see that fixed.
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And so yeah, they could do that, and maybe I think you you may be on to something that it factors into the taking them public, but you know, sometimes if you do this stuff, you can make a few more loans and you actually might make more money, you know.
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Well, I mean, the the the biggest issue facing both parties is affordability, things are just right out of control, right?
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And housing is front and center in that, in that.
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I mean, there's obviously gas and groceries and and and insurance, and there's a lot of things that are pushing the consumer.
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But when you look in, you know, I'm reading here that Fannie and Freddie Mack reported strong financial results for the second quarter of 2026.
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Fanny posted net income of 4 billion while Freddie reported net income of 3.8 billion.
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So these are cash cows.
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There's certainly a lot of room to move.
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I don't think they were put in place to to be these cash cows.
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They were put in place to serve first-time homebuyers and to be able to help, you know, facilitate a healthy housing market.
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And so this is why I come back to the initial question that I started with.
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Are there enough people in Washington that understand that doing something like this, even a small win, not permanent, not permanent, but the impact that would make in helping the Republicans in November?
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See, uh I you're you're spot on, Greg.
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I don't think it's a matter of lack of understanding.
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I think it's here, here's here's the, and I gotta be careful what I say here.
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Look, everyone in the mortgage industry, lenders, uh, title companies, everyone, all loans are equal, okay?
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In a sense that you make, you know, the profits actually you make more on old, you know, existing reef, you know, existing higher cost loans.
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But what we tried to do in May was to focus on the real issue, which is first-time homebuyers, Gen Z, the incredible challenges that now the what the realtor said, the average first-time home buyer is now like 40.
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Uh, that's unacceptable.
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Okay.
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And so the the focus shouldn't be that all loans are created equal.
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The focus should be, like you said, that there's a higher priority for getting first-time home buyers in the market, particularly people in their 20s and 30s.
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That's why we've been focused on condos.
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Those are entry-level homes in a lot of markets.
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You know, you live, you live locally.
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A lot of young people, what can they afford?
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They can't afford a freestanding home in the DC area.
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They can afford a condo.
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Number two, manufactured homes in rural areas.
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That's that's the most affordable product.
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And then in these high, you know, these high-cost areas, you know, getting Fannie and Freddie back in the game.
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So I think that's what's needed.
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That's what we try to do in May.
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We need more people talking like you're talking to say the focus can't just be on mortgages generically, it should be on our target audience of trying to turn this around and get this generation back into home ownership.
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Scott, one thing that I want to point out, which which I stumbled upon, and you might stumble upon it now here.
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The 40-year first-time buyer age was that came from uh NAR National Association of Realtors.
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I I wrote about this on my LinkedIn.
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I believe it was a mail-in survey of like a thousand people or 5,000 people.
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It was something negligible.
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It would and then and then the press picked it up and ran with it to say that the average age is 40.
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Now, ICE and other people have come out and said actually the average age of the first-time homebuyer is 3233.
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Greg, it doesn't matter.
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It's it's it's higher than it was a generation ago.
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No one disputes that, right?
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Yeah.
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So my other question is, because you've been how long have you been involved with in housing?
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How many years?
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30.
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Yeah.
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So how does this moment compare to other moments where housing had its fair share of challenges?
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Oh, I'd say it's it's average.
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I mean, we've been through some really difficult times.
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Obviously, 2008 was horrendous.
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Um, you know, going back, I wasn't around, but you know, we went through the SNL crisis in the 80s.
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You know, we don't have crises along those lines, which is good.
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Uh so I think we just have to, you know, blocking and tackling, you know, get down to basics and and you know, talk is cheap, but these programs and the things we do make an impact.
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I mean, the other thing that we did in our Gen Z report, there's trillions of dollars in assets out there, okay, that could be used for down payments.
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But because of IRA rules and capital gains rules, people can't access them.
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You know, if you start working at 21 and build up a$100,000 IRA nest egg by the time you're 30, then you turn around and say, Oh, I just figured out I want to buy a home, you pay a huge penalty to um to uh to access those funds.
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We're we're we have a proposal to make the the rules better for getting loans from your IRA, and then you pay it back and you move on and reinvest it in stocks.
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So you know, you have to do the the heavy lifting, you have to do the hard work to do a double here, a single there, a triple there.
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And all of a sudden, whatever the age is, if it's 32, well, we can get it down to 30 or something.
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So, yeah, so we mentioned the 40 uh year old benchmark, and I and I agree and appreciate you're saying it doesn't really matter because it's it's so hard to get into a home right now because of so many crosswinds.
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Um, that's for sure.
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Uh Scott, I want to ask you about the administration one more time because you said we need more people like me, you just said, to speak out.
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The question is if we could get a symphony of people, are they listening?
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Yeah.
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Yeah.
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I think so.
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I think that uh everyone, every administration responds to number one, what are people talking about?
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Why, why work on stuff that no one's saying is important?
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So just setting the agenda, and then two, setting priorities.
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I mean, that's what that's what that's what we're at, CHLA.
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We don't believe in writing every last letter and weighing in on every last issue.
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We sit down every week with our members, have a call, and and they talk about what's bothering them the most, and we filter that in and set our priorities to focus on trying to move the dial in the areas that are that are that are going to make the biggest impact for our members.
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And you also bring your members right into the hallways where decision and policy is made.
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I am a member of CHLA Community Homelanders of America, and very much appreciated being walked right into uh Ginny May.
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I think we talked to Greg Keith, who's you know very high up in the food chain at Ginny May.
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This was uh last year.
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Um also had a meeting with FHFA.
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So I appreciate that.
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And you know, at a fraction of what you know it costs at some other um trade associations.
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So you guys are doing great work.
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You're making a tremendous impact.
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What are you working on right now?
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What's what's high on the the docket at CHLA?
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Funny you should ask, because in early September we're looking at unveiling uh a report, a white paper on Ginny May.
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Um you may remember in 2000, uh the world went to hell in a handbasket with COVID.
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And so, you know, issuers and Congress said to borrowers, oh, you don't have to pay your mortgage, which was an interesting perspective.
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Um, and so issuers were under stress from having to advance funds.
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I mean, remember, we asked issuers to be a banker, even though they're a non-bank to these borrowers.
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And so fortunately it was a strong environment for IMBs because rates were low and there was a lot of refi business.
00:18:16.880 --> 00:18:29.680
But what happens the next time that you know we have a spike in in um in um defaults, and uh issuers have to you know go back to their lenders and get more get more liquidity for that.
00:18:29.839 --> 00:18:34.480
So we're we're working on an expanded proposal for a standby liquidity facility.
00:18:34.640 --> 00:18:39.359
In other words, don't wait until the next crisis, set it ahead of time, build confidence in the system.
00:18:39.440 --> 00:18:48.160
It's a it reduces risk to Ginny, it reduces risk to bankers, it reduces risk to I to uh IMB Ginny May issuers.
00:18:48.240 --> 00:18:49.599
So we're we're coming out with that.
00:18:49.759 --> 00:19:02.640
Again, not not something that people, you know, and we're also gonna have a lot in there about what Ginny Mae is and how they operate, because I think most people in Washington, in the policy world, that's one of the areas of least understanding.
00:19:02.960 --> 00:19:24.880
Yeah, so let me just throw a broad blanket on this from the lens of my of anyone out there, probably I would say the majority of people probably think, all right, Fanny, Freddie, Ginny, government entities, they're probably all equally collateralized and uh you know all there.
00:19:26.160 --> 00:19:26.880
Getting choked up here.
00:19:26.960 --> 00:19:29.119
This I'm I'm maybe I'm about to get emotional.
00:19:29.359 --> 00:19:31.759
Uh I just have a little phlegm going on, Scott.
00:19:31.839 --> 00:19:32.559
So please forgive me.
00:19:32.640 --> 00:19:35.519
I'm gonna I'm gonna do a one throat clear here, you know?
00:19:35.599 --> 00:19:36.799
So I'm sorry, pause.
00:19:37.359 --> 00:19:39.119
We no, you know, no pause, no pause.
00:19:39.200 --> 00:19:41.839
I want to be as real as my audience wants me to be real, Scott.
00:19:41.920 --> 00:19:48.960
So I'm just gonna give it one because otherwise, you know, you get in these conversations with people like and then every 15 to 20 seconds they do that.
00:19:49.119 --> 00:19:50.799
Why not just one big clear?
00:19:50.960 --> 00:19:51.920
I'm gonna give it a clear.
00:19:52.000 --> 00:19:52.480
You ready?
00:19:52.640 --> 00:19:53.039
Yep.
00:19:55.599 --> 00:19:56.240
You see that?
00:19:56.640 --> 00:19:56.799
Okay.
00:19:56.960 --> 00:19:58.720
How much better does my voice sound now?
00:19:59.119 --> 00:20:01.119
You look you sound like an announcer.
00:20:01.440 --> 00:20:02.400
Oh, thank you very much.
00:20:02.640 --> 00:20:05.039
All right, so anyway, broad blanket.
00:20:05.440 --> 00:20:14.000
What why is Ginny so much different in terms of being insulated and and capitalized than um Fannie and Freddie?
00:20:14.480 --> 00:20:19.759
So it's like it's not even apples and oranges, it's like avocados and steak.
00:20:19.839 --> 00:20:20.319
I don't know.
00:20:20.480 --> 00:20:26.160
Um, the you know, Fannie and Freddie, they're in a lot of ways an insurance company.
00:20:26.240 --> 00:20:29.519
They buy huge slogs of mortgage loans and they have the risk.
00:20:29.599 --> 00:20:35.920
So in 2008, when when prices went down and mortgages went to a hell in a handbasket, they lost money.
00:20:36.160 --> 00:20:36.480
Okay.
00:20:37.039 --> 00:20:40.960
How much money do you think Ginny Mae lost in 2008 and 2009?
00:20:41.200 --> 00:20:50.240
The answer is they made money because they don't buy mortgages, they securitize FHA loans, which are already guarantees.
00:20:50.319 --> 00:20:54.640
They securitize VA loans, which are already guaranteed, they securitize RHS loans.
00:20:54.880 --> 00:20:58.480
So the risk is exceedingly low for them.
00:20:58.640 --> 00:21:05.039
They make money, they've made money every year for the last 20 years, except one year when they lost$30 million or something like that.
00:21:05.279 --> 00:21:13.519
So the issue is they're there for a purpose, they're there to facilitate a broad market of competitors.
00:21:13.680 --> 00:21:16.559
In other words, that's why we exist as an organization.
00:21:16.720 --> 00:21:20.079
We represent primarily small and mid-sized IMBs.
00:21:20.160 --> 00:21:23.680
And we think that consumers benefit by having a lot of us.
00:21:23.920 --> 00:21:36.960
And one of the ways, like in 2000, honestly, a lot of the aggregators, because of forbearance and other things, they, you know, they some of them dropped out for a while, some of them had really poor pricing.
00:21:37.119 --> 00:21:45.920
But it was the your like your firm and others that were in the market, you know, doing directly through Jimmy May that kept a competitive market.
00:21:46.000 --> 00:21:49.680
And that's what we that's why we're focusing on this issue.
00:21:51.920 --> 00:21:54.480
I don't know that I fully understand that answer.
00:21:55.039 --> 00:22:01.680
Well, I mean, if it worked, you in other words, you're saying there's a need to Set up a backstop just in case.
00:22:01.759 --> 00:22:03.519
So you don't have to panic and get that.
00:22:03.680 --> 00:22:04.640
That makes great sense.
00:22:04.720 --> 00:22:09.920
But then in the other breath, you say that they've only lost money once over the last 30 years or so.
00:22:10.000 --> 00:22:11.039
So what's broken?
00:22:11.119 --> 00:22:14.559
If I mean that's a pretty good track record, 29 out of 30 is pretty good.
00:22:14.880 --> 00:22:19.119
Because their making money is not the same as having a broad base of issuers.
00:22:19.279 --> 00:22:31.759
And if they decide to be uh, you know, excessively conservative and crack down on issuers when you get to that market, then you're gonna have uh, you know, people out of the market.
00:22:32.160 --> 00:22:33.279
All right, that's a great answer.
00:22:33.440 --> 00:22:40.000
I the the uh the other side of this coin is are you why now are are you fearful?
00:22:40.160 --> 00:22:53.839
Do you think, based on the history of you knowing the market and the trajectory and energy prices and recessions and all that stuff, that we could be heading to a moment where we're gonna need to make sure that's in place?
00:22:54.799 --> 00:22:59.279
I think it's I think it's an it's important enough to try to push for that.
00:22:59.359 --> 00:23:03.599
I mean, we're just we're not asking them to put it in place, we're asking them to to do some real work.
00:23:03.680 --> 00:23:05.279
In other words, figure out who should fund it.
00:23:05.359 --> 00:23:09.759
Should it be the Federal Home Loan Bank lending the banks or should it be the Federal Reserve?
00:23:10.319 --> 00:23:12.079
But do you think we're heading towards another crisis?
00:23:12.160 --> 00:23:13.839
Do you think I have no idea?
00:23:14.079 --> 00:23:14.559
Well, I do.
00:23:15.279 --> 00:23:15.920
I do, I do.
00:23:16.480 --> 00:23:17.119
Maybe you think.
00:23:17.200 --> 00:23:18.400
But here's the point.
00:23:18.640 --> 00:23:33.440
I was there, I worked on the Financial Services Committee during 2008, and the the the mortgage business went to hell in a handbasket, and we we came up with huge programs like HAMP and HARP in 20 days, okay?
00:23:33.680 --> 00:23:35.119
And could we have done better?
00:23:35.279 --> 00:23:41.920
Of course we could have, because we waited until there was a crisis to figure out how to deal with what a crisis would look like.
00:23:42.079 --> 00:23:44.400
So let's do some thinking ahead of time.
00:23:44.640 --> 00:23:50.319
So the next crisis, which might not be for 20 years, or it might be next year, who knows?
00:23:50.559 --> 00:23:55.359
So we're ready, and and that we, you know, that that's our that's our point.
00:23:55.440 --> 00:23:58.079
It's well something something has to give.
00:23:58.720 --> 00:23:59.759
Something has to give.
00:24:00.640 --> 00:24:15.839
Meaning you've got hot inflation, uh consumer sentiments terrible, uh debt is awful, delinquencies are going up, uh, gas prices are up, like if something has got to break.
00:24:16.480 --> 00:24:17.039
It will break.
00:24:17.119 --> 00:24:17.920
Something will break, right?
00:24:18.000 --> 00:24:19.119
It just is factual.
00:24:19.440 --> 00:24:22.160
Never in the history of mankind has something not broken.
00:24:22.559 --> 00:24:23.920
So what is it gonna be?
00:24:24.000 --> 00:24:34.319
And for me, I think it's gonna be uh the consumer is just gonna absolutely capitulate uh and and it's gonna make it harder to make mortgage payments.
00:24:35.039 --> 00:24:42.720
And when you don't make mortgage payments, defaults go up and eventually you you know typically head into a recession, rates go down.
00:24:43.119 --> 00:24:45.759
So I mean, you know that you know, you know this, right?
00:24:46.079 --> 00:24:50.240
And that's so I so I think that you know, I appreciate the work that you're doing.
00:24:50.319 --> 00:24:52.160
I'm just one opinion, obviously.
00:24:52.400 --> 00:25:03.759
Um I appreciate the work you're doing because I I don't know how it's gonna manifest itself, but it will be good if we get into a mode where that next crisis is closer than we think, and we have we have a facility in place.
00:25:03.920 --> 00:25:06.079
So thank you for the work that you're doing to that end.
00:25:06.400 --> 00:25:14.640
Um even though you don't necessarily agree with my thesis, although I'll ask you what do you think what do you think will break?
00:25:14.799 --> 00:25:20.160
I mean, is it gonna be um is it gonna be infl inflation?
00:25:20.240 --> 00:25:21.839
Is it gonna be wages?
00:25:22.000 --> 00:25:23.440
Is it gonna be house prices?
00:25:23.599 --> 00:25:26.400
Like what what of the options there are?
00:25:26.799 --> 00:25:29.039
Did you have any kind of a gut feel?
00:25:30.240 --> 00:25:33.519
Well, I think that I mean, I don't know, I'm just drawing on experience.
00:25:33.599 --> 00:25:48.559
I I remember in the in the 90s, you know, in the 80s and 90s, I mean going through the cycle, you know, prices went up and up and up, and and like in here, and then all of a sudden in '88, here in Washington, they stopped.
00:25:48.640 --> 00:25:53.680
In other words, and then 10 years later, prices were the same or lower, and that's how they adjusted.
00:25:53.759 --> 00:25:55.279
So that's kind of my best guess.
00:25:55.359 --> 00:26:00.559
I don't really understand that things are gonna be soft for an extended period of time.
00:26:00.799 --> 00:26:01.440
Yeah.
00:26:02.640 --> 00:26:05.519
What's it costing to fill up your tank these days?
00:26:06.319 --> 00:26:08.880
Uh four uh four dollars.
00:26:09.759 --> 00:26:10.559
Oh, I see.
00:26:11.359 --> 00:26:12.480
Oh, four dollars a gallon.
00:26:12.559 --> 00:26:12.880
Sorry.
00:26:13.119 --> 00:26:14.400
I was gonna say four dollars, man.
00:26:14.559 --> 00:26:16.240
What are you were you riding a tricycle to work?
00:26:16.319 --> 00:26:16.960
What's going on here?
00:26:17.039 --> 00:26:19.519
Um, is that just it only costs 12 bucks?
00:26:19.599 --> 00:26:25.200
I wait until the things this far above E, and then I put in three gallons, and then you know, two hours ago.
00:26:25.359 --> 00:26:27.200
Have you ever have you ever run out of gas?
00:26:27.519 --> 00:26:33.119
Just in the mountains of Arizona, driving across country from uh LA to Washington.
00:26:33.200 --> 00:26:33.920
It was not a good time.
00:26:34.000 --> 00:26:35.119
This was like Well, what happened?
00:26:35.279 --> 00:26:35.759
What happened?
00:26:36.079 --> 00:26:36.799
Walk us through it.
00:26:36.960 --> 00:26:38.240
This was before cell phones.
00:26:38.400 --> 00:26:42.640
A trucker gave us a ride, and then a trucker drove us back to with a gas can.
00:26:42.799 --> 00:26:44.720
So I I didn't I learned my lesson.
00:26:44.799 --> 00:26:47.119
I don't I don't think I've run out of gas since then.
00:26:47.200 --> 00:26:49.200
But I've run out of gas once.
00:26:49.519 --> 00:26:50.799
Yeah, it's the worst feeling.
00:26:50.960 --> 00:26:56.400
You know, because you all because well, because you always assume like you get the car, they're like, Oh yeah, when it's empty, it's not really empty.
00:26:56.480 --> 00:26:57.440
There's this reserve tank.
00:26:57.519 --> 00:27:00.160
So you always think that you can kind of straddle that.
00:27:00.400 --> 00:27:01.680
And it's the it's the worst.
00:27:01.839 --> 00:27:07.519
The only thing worse than that is is when that uh deflated tire indicator comes on your dashboard.
00:27:07.759 --> 00:27:08.160
Oh, yeah.
00:27:08.319 --> 00:27:09.359
That's that sucks.
00:27:09.519 --> 00:27:12.160
Yeah, you gotta get out, you gotta see how fast is it deflating.
00:27:12.240 --> 00:27:14.799
You know, I carry an air pump in my truck now, just in case.
00:27:15.359 --> 00:27:19.680
Greg, has anyone, uh anyone in your audience not run out of gas once in their life?
00:27:19.759 --> 00:27:20.799
I mean that's a great question.
00:27:20.880 --> 00:27:22.799
I'm gonna bring this up on no surrender today.
00:27:22.960 --> 00:27:24.079
That's that's a really good one.
00:27:24.240 --> 00:27:25.119
Thank you for that.
00:27:25.279 --> 00:27:27.440
You know what else I'm gonna bring up on No Surrender?
00:27:27.680 --> 00:27:31.119
Okay, um I'm like thinking of these quirky things.
00:27:31.359 --> 00:27:32.640
This is totally one off.
00:27:32.720 --> 00:27:33.599
I'm gonna catch you off guard.
00:27:33.680 --> 00:27:46.960
If you're in a grocery market, yeah, you're in a grocery store, and you walk up to a bag of grapes, is it okay to stick your hand in and grab a grape out and test it out to see if it has the level of sweetness that you need?
00:27:48.079 --> 00:27:52.400
Yeah, as long as you leave two pennies on the I'm serious, because I do that.
00:27:52.480 --> 00:27:53.839
I take a grape out of every bag.
00:27:54.000 --> 00:27:54.400
Do you?
00:27:54.640 --> 00:27:54.799
No.
00:27:55.039 --> 00:27:55.599
Are you gonna deny?
00:27:55.839 --> 00:27:58.319
Are you gonna deny that you've never taken a grape out?
00:27:58.559 --> 00:28:03.680
No, I get I buy the raspberries in the little bat in the little boxes, and so I just look at them.
00:28:03.759 --> 00:28:05.759
That's all I'm not a big grape person.
00:28:06.000 --> 00:28:07.200
What about cherries?
00:28:07.599 --> 00:28:08.079
Same thing.
00:28:08.960 --> 00:28:10.559
I'm can't always apples.
00:28:10.720 --> 00:28:15.680
Do you ever pick up the apples and like push your thumb into it to see if there are any soft spots?
00:28:16.160 --> 00:28:18.559
I'm gonna have to plead the fifth here on that one.
00:28:18.880 --> 00:28:20.160
Okay, yeah, I thought so.
00:28:20.400 --> 00:28:21.839
Um, all right.
00:28:21.920 --> 00:28:27.279
So so there's also um this topic you wanted to talk about break through the noise.
00:28:27.519 --> 00:28:28.079
Yeah.
00:28:28.400 --> 00:28:29.440
What is that?
00:28:29.759 --> 00:28:34.559
So, all of your listeners, you know, you you're in the mortgage business.
00:28:34.640 --> 00:28:41.759
And so uh one of the things I've learned over 30 years is everyone sort of thinks that that's what people are focused on, what they do.
00:28:41.920 --> 00:28:59.200
But in fact, Washington is this just cauldron of noise where you've got interest representing the securities industry, insurance, banking, uh, you know, all these different products, and they're all fighting to talk about themselves and talk about who they are.
00:28:59.279 --> 00:29:02.000
And then in mortgages, you have different players.
00:29:02.079 --> 00:29:10.480
And so the only the main reason CHLA was formed is we wanted to make sure there was an organization that exclusively represented IMBs.
00:29:10.720 --> 00:29:15.359
And since we've done that, we've we've gone now, we're like over 80% of the market.
00:29:15.440 --> 00:29:24.400
And so, but but we try to get out there and educate people about why IMBs are important, um, knock down myths.
00:29:24.480 --> 00:29:30.319
There are people are always running around saying we're gonna, you know, devastate the market because we're unsafe.
00:29:30.559 --> 00:29:37.279
Um, and then you know, fight for issues from a particularly distinct IMB perspective.
00:29:37.359 --> 00:29:38.799
But we don't kid ourselves.
00:29:38.960 --> 00:29:41.440
There's a lot of competition out there for attention.
00:29:41.519 --> 00:29:46.319
And so we need everyone to, you know, talk to their own members of Congress.
00:29:46.480 --> 00:29:51.839
We need everyone to be, well, not everyone to have their own talk show like you do, but you know, more of that.
00:29:51.920 --> 00:29:52.880
That's helpful.
00:29:53.119 --> 00:29:54.720
That's really helpful.
00:29:55.759 --> 00:30:05.359
So in in reading through some of the uh notes here, um, there's a line in here that IMB originators face Safe Act testing and licensing.
00:30:05.440 --> 00:30:07.440
Bank originators are exempt.
00:30:07.680 --> 00:30:09.599
Are you looking to do something about that?
00:30:09.759 --> 00:30:11.839
Are you looking to level that up in some way?
00:30:12.160 --> 00:30:13.200
We think it should be.
00:30:13.279 --> 00:30:18.160
We don't understand why they can't just be required to take the the SAFAC test.
00:30:18.319 --> 00:30:27.279
I mean, there's thousands of banks, there's thousands of loan originators that work for banks that fail the SAFAC test and they're allowed to be registered.
00:30:27.599 --> 00:30:28.319
Go figure.
00:30:28.559 --> 00:30:33.279
Well, they're also allowed, you know, LOs at banks, it's my understanding they can have terrible credit too.
00:30:33.359 --> 00:30:34.799
You can't if you're an IMB.
00:30:35.599 --> 00:30:38.319
Well, we don't think we want to move in the other direction on that.
00:30:38.400 --> 00:30:41.920
We don't think that credit should be a basis for getting a license.
00:30:42.000 --> 00:30:57.680
You know, having some uh, you know, healthcare problem in the past should be Well, the the R the argument is if you can't take care of your own credit, how are you going to advise other people to do that with the biggest decision of their life?
00:30:57.839 --> 00:31:01.359
That would be what the pundits would respond with.
00:31:02.319 --> 00:31:06.400
Okay, well, I I'm not sure I agree with that, but it should be a level playing field.
00:31:06.480 --> 00:31:07.519
That's our that's our point.
00:31:07.599 --> 00:31:08.880
It should be a level playing field.
00:31:08.960 --> 00:31:14.480
It's just hard though, because the the the fiction is that these you know banks never have problems.
00:31:14.640 --> 00:31:16.079
Well, yeah.
00:31:16.640 --> 00:31:18.079
Let's talk about condos.
00:31:18.640 --> 00:31:19.279
Yep.
00:31:19.759 --> 00:31:25.599
I mean, uh this this is a I'm not sure that all the numbers have worked their way through the system.
00:31:25.759 --> 00:31:29.920
They probably have not, but limited review is gone.
00:31:30.000 --> 00:31:33.440
Uh reserves have gone from 10 to 15 percent.
00:31:34.160 --> 00:31:37.519
Uh what do you feel like the ramifications are going to be?
00:31:37.599 --> 00:31:38.480
When will we feel it?
00:31:38.559 --> 00:31:40.240
And what do you want to do about it?
00:31:40.640 --> 00:31:46.079
Well, that's the that's the problem, is you know, it won't be that readily apparent to people on the outside.
00:31:46.240 --> 00:31:50.000
So we we we need to speak up about the impact this is having.
00:31:50.160 --> 00:31:52.880
So we've been out in front on this for a long time.
00:31:53.039 --> 00:31:59.920
I mean, they did some good things earlier this summer with insurance requirements, a little more flexibility on replacement cost and so on.
00:32:00.160 --> 00:32:04.000
But um, the limited review is is a big deal for us.
00:32:04.160 --> 00:32:08.000
Um, we think the complaints are gonna escalate as time goes on.
00:32:08.240 --> 00:32:11.279
Uh, we we're searching for some sort of compromise.
00:32:11.440 --> 00:32:14.960
I mean, they're saying that it shouldn't be a you know, no review.
00:32:15.039 --> 00:32:16.799
We're saying that maybe we can streamline.
00:32:17.039 --> 00:32:20.720
We're trying to figure that one out and see whether we can come back with a compromise.
00:32:20.880 --> 00:32:26.880
On the replacement reserves, that's a big deal, and that's gonna play out over the next year.
00:32:26.960 --> 00:32:33.519
We've been working closely with the Community Associations Institute, which is the top group representing condo owners.
00:32:33.680 --> 00:32:41.920
We kind of leave that issue to them, but uh we think this is gonna mean that you know the the dues at these condo associations are gonna go up.
00:32:42.000 --> 00:32:44.079
It's gonna make it hard to qualify for a loan.
00:32:44.240 --> 00:32:47.759
So we're we're trying to keep this issue on the front burner, and we're not afraid.
00:32:47.839 --> 00:32:55.200
We weer edited a letter with CAI with the mortgage brokers in July saying that they should you know revisit these issues.
00:32:55.519 --> 00:32:57.680
Do you have any sense as to what drove this?
00:32:58.720 --> 00:33:00.480
I mean, it starts with surfside.
00:33:00.640 --> 00:33:11.039
I mean, it starts with surfside, which was you know a geographic regional thing where uh you know a pool flooded the the place and collapsed a building.
00:33:11.200 --> 00:33:17.279
But since then, I think Fannie and Freddie have have done a deep dive on saying we don't we're not sure we understand what's going on.
00:33:17.440 --> 00:33:21.839
You know, there's like 50,000 uh associations across the country.
00:33:21.920 --> 00:33:26.240
It's hard to get a handle on you know which ones are well managed and which ones aren't.
00:33:26.400 --> 00:33:29.680
So policies, the right level of oversight is hard.
00:33:29.920 --> 00:33:33.279
Yeah, I mean, like we we do a lot of condos here uh at NFM.
00:33:33.359 --> 00:33:36.160
We have our own condo desk and condo reviews and all that stuff.
00:33:36.240 --> 00:33:44.400
And our limited reviews performed better than our full reviews, yeah.
00:33:44.640 --> 00:33:47.039
So wouldn't that be a smart place to start?
00:33:47.200 --> 00:33:49.119
Hey, what's performing and what's not?
00:33:49.440 --> 00:33:58.000
That's absolutely um the other thing, you know, and we're criticizing Fannie and Freddie, but you know, in some ways, FHA is is even more restrictive.
00:33:58.079 --> 00:34:06.400
And so we called a year or two ago, we were asking them, why don't you like if Fanny or Freddie have approved a project, why don't you make a loan against it?
00:34:06.480 --> 00:34:11.599
Why do we have all these different agencies, different processes that are so distinct?
00:34:11.760 --> 00:34:15.280
So this is a big issue, and we're gonna keep talking about it.
00:34:17.760 --> 00:34:19.199
Have we left anything on the table here?
00:34:19.360 --> 00:34:22.480
Anything else you want to talk about before I uh bid you ado?
00:34:23.039 --> 00:34:24.000
I don't think so.
00:34:24.239 --> 00:34:28.480
Uh just you were talking about the you know breaking through the noise.
00:34:28.639 --> 00:34:32.159
I mean, we've been trying to uh do that last week.
00:34:32.239 --> 00:34:38.559
We wrote a letter, you know, going back on the you know, you just sort of it's like Sisyphus pushing something up a hill on some of these.
00:34:38.639 --> 00:34:43.840
You know, we're saying that IMB should be eligible for federal home loan advances, but at a time.
00:34:43.920 --> 00:34:44.719
Oh, yeah, let's talk about that.
00:34:44.800 --> 00:34:45.039
Yeah, yeah.
00:34:45.119 --> 00:34:46.480
I'm sorry, I meant to bring that up.
00:34:46.639 --> 00:34:47.519
What is that?
00:34:48.159 --> 00:34:50.159
So explain explain that.
00:34:50.239 --> 00:34:52.559
What is what is it and why should the industry care?
00:34:52.800 --> 00:34:56.000
The federal home loan bank is the sort of the hidden GSE.
00:34:56.079 --> 00:35:01.440
No one focuses on them, they make advances, collateralized advances to banks for the mortgages.
00:35:01.599 --> 00:35:05.599
Well, basically, banks aren't doing mortgages anymore.
00:35:05.840 --> 00:35:18.239
Uh, so what we've said is, and this goes back to the Gini issue, is why not create a collateralized project that's funded by the federal home loan banks and they funnel them through the banks.
00:35:18.400 --> 00:35:23.360
The banks do the underwriting, but they do collateralized advances to help with Ginny advances.
00:35:23.519 --> 00:35:30.960
We just think that the federal home loan bank should be more focused on where the mortgages are being made, which is non-banks.
00:35:31.440 --> 00:35:36.000
So that anyway, and how will how will that help IMBs?
00:35:36.800 --> 00:35:40.000
Because we'll get more credit and more liquidity into the system.
00:35:40.239 --> 00:35:44.320
Will it will it will it add product or just more capital?
00:35:44.639 --> 00:35:45.840
Just more capital, yeah.
00:35:46.159 --> 00:35:47.599
More more more financing.
00:35:47.920 --> 00:35:52.800
So how how old were you when you first stepped foot into the capital?
00:35:54.159 --> 00:35:56.400
But then you're gonna be able to figure out how old I am.
00:35:56.480 --> 00:35:57.280
No, I'm not gonna go there.
00:35:57.360 --> 00:35:59.039
I'm not gonna ask for the year.
00:36:00.559 --> 00:36:02.639
It was 30 years 30 years ago.
00:36:02.880 --> 00:36:04.480
33 years ago.
00:36:04.800 --> 00:36:05.679
I started working.
00:36:06.559 --> 00:36:10.079
That you say you first stepped foot in the Capitol 33 years ago.
00:36:10.239 --> 00:36:11.440
So who is the most sorry?
00:36:11.519 --> 00:36:12.960
I lied 34 years ago.
00:36:13.199 --> 00:36:18.559
Who's the most famous politician you ever you've you've met through your Capitol Hill days?
00:36:19.039 --> 00:36:20.480
Bill Clinton, I guess.
00:36:20.800 --> 00:36:22.079
What was he like?
00:36:23.119 --> 00:36:24.400
He was smooth.
00:36:26.800 --> 00:36:29.599
I'll say but he just turned 80.
00:36:30.000 --> 00:36:38.639
I went to uh I went to uh the memorial service on the hill for uh for Barney Frank a couple weeks ago, and he showed up and made a speech.
00:36:38.800 --> 00:36:42.239
He's still he's he's aging, but he still kind of got it.
00:36:42.559 --> 00:36:43.599
He's still got it.
00:36:43.760 --> 00:36:44.079
Yeah.
00:36:44.320 --> 00:36:45.920
Uh are you a historian?
00:36:46.239 --> 00:36:50.639
My father was a history professor at the University of Wisconsin-Milwaukee.
00:36:50.800 --> 00:36:51.119
Why?
00:36:51.360 --> 00:36:52.880
And you went to Stanford, right?
00:36:53.039 --> 00:36:53.920
Yeah, yeah.
00:36:54.159 --> 00:36:55.440
Oh, you've done your work.
00:36:55.760 --> 00:36:57.760
That's a pretty good school, I hear.
00:36:58.159 --> 00:37:04.400
But I think history is history is uh, you know, nothing ever is really new.
00:37:04.480 --> 00:37:20.800
I mean, you know, we had that we had the SNL crisis in the 80s into the early 90s, and a lot of these lessons, you know, the the the Silicon Valley Bank, it was just the SNL crisis revisited in a different form 40 years later.
00:37:21.360 --> 00:37:23.760
A lot of this stuff just keeps repeating itself.
00:37:24.000 --> 00:37:26.880
Yeah, well, you wonder what what is going to be the next crisis.
00:37:27.039 --> 00:37:28.719
I feel like we're right, we're sitting right there, right?
00:37:29.039 --> 00:37:32.800
It's sound like you've done a lot more work than a lot of people in figuring that out.
00:37:33.119 --> 00:37:33.920
I think we're sitting.
00:37:34.000 --> 00:37:35.760
I mean, there's this thing, misery on the eights.
00:37:35.920 --> 00:37:43.119
Stan Middleman wrote about it in his uh biography, which was released last year, seeing around corners.
00:37:43.280 --> 00:37:43.679
Yeah.
00:37:43.920 --> 00:37:50.719
And historically, if you look at the last three decades or so, there has been something not good that has happened around the eights.
00:37:50.880 --> 00:37:57.280
You know, you mentioned 2008 and the financial crisis, 2018, COVID started to percolate.
00:37:57.360 --> 00:38:04.159
And, you know, this 2028, there's gonna be a reversal of home values, I'm telling you right now.
00:38:04.400 --> 00:38:10.960
So we're gonna go into a recession and rates are gonna go down, and it's gonna start the refi cycle, and that's what is gonna happen.
00:38:11.119 --> 00:38:15.840
Um I know I'm saying it as if I've seen it already, but look, you're talking about history.
00:38:15.920 --> 00:38:16.719
That's history.
00:38:16.960 --> 00:38:31.599
Well, my only take is, and this is me talking, not Claude, um, that the the the one of the big problems is that they're throwing so much money at AI, and a lot of this is private capital through you know private equity funding.
00:38:31.679 --> 00:38:33.360
And what happens if that implodes?
00:38:33.440 --> 00:38:35.199
I mean, when are the profits gonna come?
00:38:35.360 --> 00:38:39.119
Is there gonna be I mean, we see this in a lot of new burgeoning technologies?
00:38:39.280 --> 00:38:44.239
You have a you can have a bubble and then the Well, I think I just gonna accelerate unemployment, right?
00:38:44.400 --> 00:38:48.320
If it turns out to be something real, I mean, either way, we're hosed.
00:38:48.480 --> 00:38:52.880
If it turns out to be something really great, then it's gonna replace a lot of jobs.
00:38:53.039 --> 00:38:54.960
The unemployment rate is gonna go up.
00:38:55.119 --> 00:39:00.960
If it turns out to be a complete bust, all these big tech companies are gonna go belly up or whatever.
00:39:01.039 --> 00:39:02.320
They're gonna have a lot of distress.
00:39:02.480 --> 00:39:10.239
That's gonna impact people's 401ks, their confidence, uh, it's gonna erode um their uh their net worth.
00:39:10.320 --> 00:39:12.159
Like none of none of those scenarios are good.
00:39:12.239 --> 00:39:18.239
It just feels like we've been spinning around in this cocoon of shit for you know four or five years.
00:39:18.320 --> 00:39:20.800
And eventually just the bottom's gonna fall out.
00:39:21.039 --> 00:39:29.679
And uh my prediction is that bottom is gonna be a pretty severe recession and and that um people are gonna stop making their payments on their mortgages.
00:39:29.760 --> 00:39:36.480
I mean, I'm I'm already getting reports from a lot of people um in the mortgage business that that are making loans every day, Scott.
00:39:36.559 --> 00:39:44.559
This is something for you to track that there are more and more people calling up their loan officers saying, I'm desperate, help me.
00:39:44.719 --> 00:39:46.559
Can you do a cash out loan for me?
00:39:46.719 --> 00:39:56.559
Um and there's also uh reportedly, uh, at least in my circles, a record number of people that are making their mortgage payments later and later in the month.
00:39:57.119 --> 00:39:59.840
So they're going past their grace period of the 15th.
00:40:00.000 --> 00:40:07.360
Many people are now making them on the 22nd, the 23rd, the 24th, where they're not quite 30 days late, so it's not going to show up.
00:40:08.079 --> 00:40:12.000
But you're right on the precipice of them having to make a very serious decision.
00:40:12.079 --> 00:40:15.840
You know, and I heard food on my table, is it gas in my tank?
00:40:16.000 --> 00:40:17.760
Is it my mortgage payment?
00:40:18.079 --> 00:40:26.880
Well, I heard the other day that uh credit card debt is what, up 60% in whatever it's all-time record, it's well over a trillion, yeah, well over a trillion dollars.
00:40:27.199 --> 00:40:37.039
You know, it's it's and and that's there's a lot of people over the years that have said that the simple, you know, underwriting criteria that there's there's there's more inclusive ways of measuring this.
00:40:37.119 --> 00:40:42.719
But obviously, if people are stressed by you know growing debt, and you know, same thing with auto loans.
00:40:42.800 --> 00:40:45.280
It's like everyone they're talking about now seven-year loans.
00:40:45.360 --> 00:40:49.599
You're talking about uh, you know, prices are at unprecedented levels for cars.
00:40:49.760 --> 00:40:51.679
So people are carry a lot of debt.
00:40:51.760 --> 00:40:57.599
Obviously, they the last thing they want to do is default on their mortgage, but at a certain point, like you say, what can they do?
00:40:59.599 --> 00:41:01.519
So will you so you'll have me back?
00:41:01.840 --> 00:41:06.159
Will you have me back for another interview when some of the stuff that you're saying comes about?
00:41:07.360 --> 00:41:08.079
Yeah, of course.
00:41:08.159 --> 00:41:09.119
I love having you on here.
00:41:09.199 --> 00:41:10.320
You're you went to Stanford.
00:41:10.400 --> 00:41:11.679
How could I not have you on?
00:41:11.920 --> 00:41:13.920
I barely I barely made it through Maryland.
00:41:14.000 --> 00:41:15.679
I'm I'm surprised you even talk to me.
00:41:15.760 --> 00:41:16.880
I'm so dumb.
00:41:17.280 --> 00:41:19.039
You're you're obviously very smart.
00:41:19.199 --> 00:41:29.119
Uh, so you know, I'm I'm I'm usually intimidated when I talk to people from Harvard, Stanford, you know, the Ivies, but you, you know, you you have a way of putting you have a way of putting everyone at ease.
00:41:29.280 --> 00:41:31.440
I don't feel like you're judging me intellectually.
00:41:31.599 --> 00:41:32.400
So thank you for that.
00:41:32.480 --> 00:41:33.280
I appreciate that.
00:41:33.440 --> 00:41:38.159
Give me a quick thought on the deficit reaching$40 trillion.
00:41:39.519 --> 00:41:49.360
Well, I just, you know, I went to business school and I everything they taught me was a bunch of lies when they said, well, at a certain point you borrow so much money, rates have to go through the roof.
00:41:49.440 --> 00:41:51.199
And maybe that's starting to happen.
00:41:51.440 --> 00:41:54.559
But uh we we gotta we gotta fix Social Security.
00:41:54.719 --> 00:41:59.440
I mean, it's six years away from you know running out of money.
00:41:59.599 --> 00:42:03.920
And we gotta fix, we gotta, and neither party cares about the deficit.
00:42:04.239 --> 00:42:10.000
The the Republicans think you should just keep cutting taxes, and the Democrats think you should just keep spending money.
00:42:10.159 --> 00:42:13.039
And uh so I I don't know.
00:42:13.199 --> 00:42:21.599
That's you know, the only thing that's gonna change that is when foreigner when foreign investors start saying no mass.
00:42:21.920 --> 00:42:23.199
Yeah, exactly.
00:42:23.440 --> 00:42:30.960
Or, you know, when the when when the yen capitulates or uh yeah, you know, all these foreign entities just take all their money out of our treasuries.
00:42:31.039 --> 00:42:32.000
There's a lot going on for sure.
00:42:32.079 --> 00:42:37.280
Scott Olson, executive director of CHLA, Community Homelenders of America.
00:42:37.440 --> 00:42:39.199
I am a proud member.
00:42:39.360 --> 00:42:41.679
This is a great trade group to be a part of.
00:42:42.000 --> 00:42:42.320
Thank you.
00:42:42.480 --> 00:42:45.440
Not exp not expensive either, and you get a seat at the table.
00:42:45.599 --> 00:42:46.639
I can speak to that.
00:42:46.719 --> 00:42:50.239
Every Tuesday at noon, we all sit around and everyone has a voice.
00:42:50.400 --> 00:42:51.280
Very impactful.
00:42:51.440 --> 00:42:54.960
Thank you for the work you're doing and for your time here on one-on-one.
00:42:55.519 --> 00:42:57.199
As always, great to be on.
00:42:57.440 --> 00:42:58.960
All right, see you again next Monday, everyone.
00:42:59.119 --> 00:42:59.440
So long.
00:42:59.519 --> 00:43:00.480
Have a great week.
00:00:30.719 --> 00:00:31.199
Mr.
00:00:31.359 --> 00:00:33.759
Scott Olsen, here you are again.
00:00:34.079 --> 00:00:34.640
Good morning.
00:00:34.799 --> 00:00:36.079
Great to be back on.
00:00:36.560 --> 00:00:38.079
It's great to see you, sir.
00:00:38.320 --> 00:00:46.320
Executive director at the CHLA Community Homelanders of America, a very important dude in mortgage.
00:00:46.399 --> 00:00:48.000
Have you ever been called a dude before?
00:00:48.479 --> 00:00:48.799
No.
00:00:49.359 --> 00:00:50.320
Do I need a hat?
00:00:50.479 --> 00:00:53.200
I was in Big Sky, Montana, two weeks ago.
00:00:53.280 --> 00:00:54.399
I should have brought a cowboy hat.
00:00:54.960 --> 00:00:55.359
How was it?
00:00:55.600 --> 00:00:56.479
How was Big Sky?
00:00:57.119 --> 00:00:57.759
It's amazing.
00:00:57.840 --> 00:00:59.280
I recommend going there.
00:00:59.520 --> 00:01:01.520
Um had you had you been before?
00:01:01.759 --> 00:01:02.399
No, no.
00:01:02.560 --> 00:01:10.480
Uh friend, uh, we were in we've travel with my family every summer, my kids and their significant others, and we take a trip out west.
00:01:10.560 --> 00:01:15.120
Last year was Banff and had a friend out there, and they recommended Big Sky.
00:01:15.200 --> 00:01:16.959
So we said, okay, we'll give it a try.
00:01:17.599 --> 00:01:19.760
What was the best part about it?
00:01:20.719 --> 00:01:24.239
Just the well, I guess the yurt.
00:01:24.560 --> 00:01:32.319
We took a truck up to the top of a mountain and they did a little fancy dinner, and we had great views, and the food was amazing.
00:01:32.400 --> 00:01:34.159
But the hiking, I guess.
00:01:34.719 --> 00:01:35.200
Excellent.
00:01:35.359 --> 00:01:35.680
All right.
00:01:35.760 --> 00:01:37.120
Well, it's great to see you.
00:01:39.200 --> 00:01:40.239
It's been a while.
00:01:40.560 --> 00:01:41.120
It has.
00:01:41.359 --> 00:01:41.760
Too long.
00:01:41.920 --> 00:01:43.680
We have a lot to we have a lot to talk about.
00:01:43.760 --> 00:01:46.400
You you're uh you're a busy man at CHLA, of course.
00:01:46.640 --> 00:01:47.680
Uh CHLA.
00:01:48.319 --> 00:01:49.280
It's a busy time.
00:01:49.359 --> 00:01:50.480
There's a lot going on.
00:01:50.959 --> 00:01:51.200
Yeah.
00:01:51.359 --> 00:01:55.040
So you you all are one of the bigger trade groups in the mortgage industry.
00:01:55.120 --> 00:01:57.280
So we'll throw throw that qualifier in there.
00:01:57.359 --> 00:01:59.760
And um there's a lot to talk about here.
00:01:59.920 --> 00:02:12.319
You know, we're gonna get into um condos, uh, and we're gonna talk about Ginny May and liquidity because there's some concerns there and uh a bunch of other things, you know, breaking through the noise.
00:02:12.560 --> 00:02:16.879
And lastly, we are gonna talk about the CFPV, but I have my own little list.
00:02:16.960 --> 00:02:17.840
That that's your list.
00:02:17.919 --> 00:02:18.639
I have my list.
00:02:18.879 --> 00:02:19.599
Okay, all right.
00:02:20.159 --> 00:02:23.840
So I've got my own little list, and I, you know, of course, I go first because I'm the host.
00:02:24.080 --> 00:02:24.639
Exactly.
00:02:24.800 --> 00:02:26.879
You drive the agenda, you drive the agenda.
00:02:27.120 --> 00:02:29.199
I I'm driving the bus here.
00:02:29.360 --> 00:02:33.280
Um great disadministration so far on housing.
00:02:34.479 --> 00:02:37.280
Uh B plus, A minus.
00:02:37.439 --> 00:02:52.800
I think they've, I mean, the good news is we've been stuck, I think, for many, many years in this bipartisan quagmire where both sides had sort of uh created a standoff and and Congress was split a lot of the time.
00:02:52.879 --> 00:02:56.960
And so we weren't seeing action, even the low-hanging fruit.
00:02:57.120 --> 00:03:04.960
And you know, I'm not saying that I think everything the Trump administration has done has been good, but they've been very receptive on a bunch of things.
00:03:05.120 --> 00:03:10.719
They bought, they they instructed Fannie and Freddie to buy mortgages to help try bring down rates.
00:03:10.800 --> 00:03:11.840
We've been pushing for that.
00:03:11.919 --> 00:03:17.039
They made reforms to the CFPB, you know, regulatory process.
00:03:17.439 --> 00:03:24.319
Um you know, so they've they've I could go on, but they've been that seems like an aggressive grade.
00:03:25.360 --> 00:03:26.560
Why do you say that?
00:03:26.879 --> 00:03:29.680
I mean A minus, B plus.
00:03:30.159 --> 00:03:37.919
You know, look, I don't I never reached those grades in school, so I uh but I'm guessing that's in the 90% range.
00:03:38.159 --> 00:03:41.520
So I mean that leaves just a little bit of window that they could be better.
00:03:41.599 --> 00:03:47.439
And uh yeah, so well, I've never graded an administration less than a B anyway.
00:03:47.520 --> 00:03:53.599
So just you understand in my position, you know, we're always gonna look at things from a slightly rose-colored.
00:03:55.199 --> 00:03:56.159
I'm on the I'm on the air.
00:03:56.960 --> 00:03:57.840
I'm on the air, Greg.
00:03:58.000 --> 00:04:00.000
I'm on the I need a I need a comp, Scott.
00:04:00.080 --> 00:04:03.360
How do you grade the Biden administration, the one that's already done?
00:04:04.000 --> 00:04:07.120
Uh how would you grade that?
00:04:07.919 --> 00:04:10.000
I'd say uh B minus.
00:04:10.479 --> 00:04:12.960
Um still, I'm still in the B area.
00:04:13.039 --> 00:04:24.480
I I the problem, I you know, I think that the problem was that uh Joe, not not what Joe Biden did, per se, I don't want to get into that, but that he he didn't really have a housing background.
00:04:24.560 --> 00:04:31.279
He the the people he didn't bring a bunch of people with him that had been long-standing people in housing.
00:04:31.360 --> 00:04:36.160
And I think that was uh, you know, his his interests were elsewhere, like foreign affairs and things like that.
00:04:36.240 --> 00:04:39.920
So well, who in this administration knows housing?
00:04:40.079 --> 00:04:41.279
Because it's funny you should say that.
00:04:41.600 --> 00:04:43.600
This is one of the questions I had on my list.
00:04:43.920 --> 00:04:55.600
So you're you're you're scratching my you're scratching my itch here because uh I don't know, does does uh Director Poulty I mean he knows building, but does he know the mortgage business?
00:04:55.839 --> 00:05:04.240
Like the you know, one of my questions is just overall, is there enough mortgage acumen in Capitol Hill?
00:05:04.399 --> 00:05:07.920
And if so, who is it Elizabeth Warren?
00:05:08.800 --> 00:05:14.319
So I guess I would start off by saying that everyone wants to talk about the big showy picture stuff.
00:05:14.399 --> 00:05:24.959
And I would say there's an there's a lot of uh very competent people in in the agencies, like uh Joe Gormley at Ginny May is outstanding.
00:05:25.199 --> 00:05:28.160
Um Matt Jones is over at FHA.
00:05:28.560 --> 00:05:30.720
Um these these these matter.
00:05:30.879 --> 00:05:42.399
I think uh FHFA, it's a it's yes, uh Poulti is in charge, but it's a collaborative process where you have Fannie Mae, Freddie Mack, um senior staff that's been around for a while.
00:05:42.480 --> 00:05:44.240
It's a it's a continuation.
00:05:44.639 --> 00:05:57.040
So um, you know, I think the CFPB has been the most um difficult to follow because they were run by the head of OMB for a while, and now they're trying to get a permanent director.
00:05:57.120 --> 00:06:00.639
And so, you know, uh, but they but they clearly understand the issue.
00:06:00.720 --> 00:06:11.519
So yeah, I mean I I I think when it comes to the people in the trenches at the key agencies for our members, I think there's a lot of very qualified people.
00:06:11.920 --> 00:06:13.360
You talked about the CFPB.
00:06:13.439 --> 00:06:17.120
My understanding is no enforcement actions in 2026.
00:06:17.360 --> 00:06:19.199
Is that your understanding as well?
00:06:19.839 --> 00:06:22.240
Well, I don't know whether there's none.
00:06:22.319 --> 00:06:25.360
Uh there's clearly it's been a different perspective.
00:06:25.519 --> 00:06:47.920
I I think that the um, you know, that's one half of the equation, which is that um they they obviously, I mean, I think they're moving towards a lot of the things that we've been arguing for years, which is number one, it shouldn't be based on did you ticky tack violate some rule, but whether there's consumer harm.
00:06:48.160 --> 00:06:51.759
Number two, uh there shouldn't be regulation by enforcement.
00:06:51.920 --> 00:07:00.240
Number three, some of these rules that the Biden administration, one of the reasons I gave them a B minus, they were doing some rules that were absolutely redundant for IMVs.
00:07:00.319 --> 00:07:01.519
They took those out.
00:07:01.680 --> 00:07:06.160
So, but but obviously it doesn't mean that this goes away, it just shifts to the states.
00:07:06.399 --> 00:07:06.720
Yeah.
00:07:07.199 --> 00:07:15.120
I mean, I I I think when you compare Biden to uh this administration, the bar was pretty low.
00:07:15.519 --> 00:07:19.680
Having said that, there have been some significant things that have happened.
00:07:19.839 --> 00:07:29.199
Uh I look at uh how they attacked uh FICO and you know they insisted on, you know, Poulte insisted on competition there with vanta score, which is gaining adoption.
00:07:29.519 --> 00:07:30.639
Yeah, that's good.
00:07:30.959 --> 00:07:32.079
That's super positive.
00:07:32.240 --> 00:07:41.839
I guess where I get stuck, and maybe you can clear my head on this, is the levers that they could be pulling in terms of affordability that they're not.
00:07:42.399 --> 00:07:46.399
More specifically, uh G fees and really LLPAs.
00:07:48.240 --> 00:07:58.240
That's something that's something that they could do for they could just do a carve out for first-time home buyers and wave LLPAs, for instance.
00:07:58.560 --> 00:08:06.800
Do something with them, even even give a small little window where you do that for six months and then we measure like something like that.
00:08:06.879 --> 00:08:23.439
And I understand my opinion is that they didn't do that, um they didn't do that when Barry Habib was leaning in on it as a member of Fannie Mays on the board because they were really considering strongly taking the um agencies out of conservatorship.
00:08:23.600 --> 00:08:28.319
Well, now we're two years in, we're probably gonna have uh you know Democratic House.
00:08:28.480 --> 00:08:31.199
So it's uh it doesn't look like that's gonna happen.
00:08:31.680 --> 00:08:48.320
Um so if that's not gonna happen, if they're not coming out and they don't necessarily have to justify them coming out by ringing the rest register and showing this big number that brings in a nice uh attractive amount of money from the public markets, then why not do that?
00:08:48.480 --> 00:09:04.720
Like that this is where I wonder if they know what they're doing, because like if they really want housing to get behind them, that's something that they can do, Scott, right away that will make the president look like an absolute champion for those that are on the outside looking in.
00:09:05.039 --> 00:09:06.399
I well, totally agree.
00:09:06.480 --> 00:09:09.440
I've uh you must uh I think we someone handed you our hymnal.
00:09:09.519 --> 00:09:18.960
I mean, we were fighting early last year for cutting Gulling, cutting LLPAs on manufactured home loans, on condos, and on high cost loans.
00:09:19.279 --> 00:09:27.279
Um, and and we really made a big splash of that with our Gen Z report a couple months ago, which we featured in when we rolled it out.
00:09:27.519 --> 00:09:33.440
That, you know, for it's the high cost loans, it's uh, you know, they are not because they're risky.
00:09:33.600 --> 00:09:42.559
They're they're they're higher LLPAs because some people in Washington don't want to see uh loans in you know higher cost areas.
00:09:42.720 --> 00:09:43.519
Well, it's ridiculous.
00:09:43.600 --> 00:09:59.519
You know, we I pulled up a um a uh$720,000 home in like Kansas or Wisconsin, I think it was in rural Wisconsin, uh$750,000, uh 5,000 square feet, six bedrooms, whatever.
00:09:59.679 --> 00:10:00.960
So that's okay.
00:10:01.279 --> 00:10:12.080
But then I pulled one in, I think it was Calabasas, California, in the valley, uh, 1,300 square feet, not even a starter home, probably needed some work, and that was 850.
00:10:12.399 --> 00:10:13.600
And that's a starter home.
00:10:13.759 --> 00:10:20.320
And so there's just no reason in these high-cost areas that we should be discriminating against these loans.
00:10:20.399 --> 00:10:22.720
And so we'd like to see that fixed.
00:10:22.879 --> 00:10:37.919
And so yeah, they could do that, and maybe I think you you may be on to something that it factors into the taking them public, but you know, sometimes if you do this stuff, you can make a few more loans and you actually might make more money, you know.
00:10:38.159 --> 00:10:46.879
Well, I mean, the the the biggest issue facing both parties is affordability, things are just right out of control, right?
00:10:47.039 --> 00:10:49.840
And housing is front and center in that, in that.
00:10:49.919 --> 00:10:56.240
I mean, there's obviously gas and groceries and and and insurance, and there's a lot of things that are pushing the consumer.
00:10:56.720 --> 00:11:03.279
But when you look in, you know, I'm reading here that Fannie and Freddie Mack reported strong financial results for the second quarter of 2026.
00:11:03.919 --> 00:11:10.240
Fanny posted net income of 4 billion while Freddie reported net income of 3.8 billion.
00:11:10.799 --> 00:11:13.279
So these are cash cows.
00:11:13.840 --> 00:11:15.600
There's certainly a lot of room to move.
00:11:16.240 --> 00:11:19.840
I don't think they were put in place to to be these cash cows.
00:11:19.919 --> 00:11:27.679
They were put in place to serve first-time homebuyers and to be able to help, you know, facilitate a healthy housing market.
00:11:27.840 --> 00:11:32.480
And so this is why I come back to the initial question that I started with.
00:11:32.720 --> 00:11:45.600
Are there enough people in Washington that understand that doing something like this, even a small win, not permanent, not permanent, but the impact that would make in helping the Republicans in November?
00:11:45.919 --> 00:11:48.399
See, uh I you're you're spot on, Greg.
00:11:48.559 --> 00:11:50.960
I don't think it's a matter of lack of understanding.
00:11:51.039 --> 00:11:54.480
I think it's here, here's here's the, and I gotta be careful what I say here.
00:11:54.639 --> 00:12:01.600
Look, everyone in the mortgage industry, lenders, uh, title companies, everyone, all loans are equal, okay?
00:12:01.759 --> 00:12:10.480
In a sense that you make, you know, the profits actually you make more on old, you know, existing reef, you know, existing higher cost loans.
00:12:10.639 --> 00:12:23.519
But what we tried to do in May was to focus on the real issue, which is first-time homebuyers, Gen Z, the incredible challenges that now the what the realtor said, the average first-time home buyer is now like 40.
00:12:23.600 --> 00:12:25.039
Uh, that's unacceptable.
00:12:25.200 --> 00:12:25.440
Okay.
00:12:25.840 --> 00:12:29.679
And so the the focus shouldn't be that all loans are created equal.
00:12:29.759 --> 00:12:37.519
The focus should be, like you said, that there's a higher priority for getting first-time home buyers in the market, particularly people in their 20s and 30s.
00:12:37.679 --> 00:12:39.600
That's why we've been focused on condos.
00:12:39.759 --> 00:12:41.840
Those are entry-level homes in a lot of markets.
00:12:42.000 --> 00:12:43.840
You know, you live, you live locally.
00:12:44.000 --> 00:12:45.840
A lot of young people, what can they afford?
00:12:45.919 --> 00:12:48.960
They can't afford a freestanding home in the DC area.
00:12:49.039 --> 00:12:50.080
They can afford a condo.
00:12:50.320 --> 00:12:52.799
Number two, manufactured homes in rural areas.
00:12:52.879 --> 00:12:55.679
That's that's the most affordable product.
00:12:55.840 --> 00:13:01.679
And then in these high, you know, these high-cost areas, you know, getting Fannie and Freddie back in the game.
00:13:01.840 --> 00:13:03.919
So I think that's what's needed.
00:13:04.000 --> 00:13:05.440
That's what we try to do in May.
00:13:05.519 --> 00:13:20.639
We need more people talking like you're talking to say the focus can't just be on mortgages generically, it should be on our target audience of trying to turn this around and get this generation back into home ownership.
00:13:20.960 --> 00:13:27.120
Scott, one thing that I want to point out, which which I stumbled upon, and you might stumble upon it now here.
00:13:27.440 --> 00:13:37.039
The 40-year first-time buyer age was that came from uh NAR National Association of Realtors.
00:13:37.279 --> 00:13:39.279
I I wrote about this on my LinkedIn.
00:13:39.440 --> 00:13:45.120
I believe it was a mail-in survey of like a thousand people or 5,000 people.
00:13:45.360 --> 00:13:46.639
It was something negligible.
00:13:46.720 --> 00:13:53.519
It would and then and then the press picked it up and ran with it to say that the average age is 40.
00:13:53.600 --> 00:13:59.840
Now, ICE and other people have come out and said actually the average age of the first-time homebuyer is 3233.
00:14:01.360 --> 00:14:02.559
Greg, it doesn't matter.
00:14:02.720 --> 00:14:06.159
It's it's it's higher than it was a generation ago.
00:14:06.639 --> 00:14:07.919
No one disputes that, right?
00:14:08.320 --> 00:14:08.480
Yeah.
00:14:08.639 --> 00:14:13.679
So my other question is, because you've been how long have you been involved with in housing?
00:14:13.840 --> 00:14:14.559
How many years?
00:14:15.679 --> 00:14:16.080
30.
00:14:16.559 --> 00:14:16.879
Yeah.
00:14:17.039 --> 00:14:25.759
So how does this moment compare to other moments where housing had its fair share of challenges?
00:14:26.559 --> 00:14:29.279
Oh, I'd say it's it's average.
00:14:29.519 --> 00:14:32.399
I mean, we've been through some really difficult times.
00:14:32.559 --> 00:14:35.679
Obviously, 2008 was horrendous.
00:14:35.919 --> 00:14:41.279
Um, you know, going back, I wasn't around, but you know, we went through the SNL crisis in the 80s.
00:14:41.440 --> 00:14:46.240
You know, we don't have crises along those lines, which is good.
00:14:46.639 --> 00:14:58.399
Uh so I think we just have to, you know, blocking and tackling, you know, get down to basics and and you know, talk is cheap, but these programs and the things we do make an impact.
00:14:58.559 --> 00:15:05.600
I mean, the other thing that we did in our Gen Z report, there's trillions of dollars in assets out there, okay, that could be used for down payments.
00:15:05.759 --> 00:15:10.879
But because of IRA rules and capital gains rules, people can't access them.
00:15:11.039 --> 00:15:26.960
You know, if you start working at 21 and build up a$100,000 IRA nest egg by the time you're 30, then you turn around and say, Oh, I just figured out I want to buy a home, you pay a huge penalty to um to uh to access those funds.
00:15:27.200 --> 00:15:36.480
We're we're we have a proposal to make the the rules better for getting loans from your IRA, and then you pay it back and you move on and reinvest it in stocks.
00:15:36.720 --> 00:15:44.240
So you know, you have to do the the heavy lifting, you have to do the hard work to do a double here, a single there, a triple there.
00:15:44.320 --> 00:15:49.039
And all of a sudden, whatever the age is, if it's 32, well, we can get it down to 30 or something.
00:15:49.440 --> 00:16:01.120
So, yeah, so we mentioned the 40 uh year old benchmark, and I and I agree and appreciate you're saying it doesn't really matter because it's it's so hard to get into a home right now because of so many crosswinds.
00:16:01.519 --> 00:16:02.879
Um, that's for sure.
00:16:03.120 --> 00:16:11.679
Uh Scott, I want to ask you about the administration one more time because you said we need more people like me, you just said, to speak out.
00:16:12.080 --> 00:16:18.240
The question is if we could get a symphony of people, are they listening?
00:16:18.720 --> 00:16:19.360
Yeah.
00:16:19.600 --> 00:16:20.240
Yeah.
00:16:20.559 --> 00:16:21.360
I think so.
00:16:21.600 --> 00:16:28.480
I think that uh everyone, every administration responds to number one, what are people talking about?
00:16:28.639 --> 00:16:31.519
Why, why work on stuff that no one's saying is important?
00:16:31.679 --> 00:16:35.519
So just setting the agenda, and then two, setting priorities.
00:16:35.679 --> 00:16:38.799
I mean, that's what that's what that's what we're at, CHLA.
00:16:38.879 --> 00:16:42.559
We don't believe in writing every last letter and weighing in on every last issue.
00:16:42.720 --> 00:16:57.120
We sit down every week with our members, have a call, and and they talk about what's bothering them the most, and we filter that in and set our priorities to focus on trying to move the dial in the areas that are that are that are going to make the biggest impact for our members.
00:16:57.519 --> 00:17:03.600
And you also bring your members right into the hallways where decision and policy is made.
00:17:03.679 --> 00:17:11.359
I am a member of CHLA Community Homelanders of America, and very much appreciated being walked right into uh Ginny May.
00:17:11.440 --> 00:17:16.160
I think we talked to Greg Keith, who's you know very high up in the food chain at Ginny May.
00:17:16.400 --> 00:17:18.240
This was uh last year.
00:17:18.400 --> 00:17:20.880
Um also had a meeting with FHFA.
00:17:21.119 --> 00:17:22.319
So I appreciate that.
00:17:22.480 --> 00:17:28.559
And you know, at a fraction of what you know it costs at some other um trade associations.
00:17:28.640 --> 00:17:29.839
So you guys are doing great work.
00:17:29.920 --> 00:17:31.279
You're making a tremendous impact.
00:17:31.359 --> 00:17:32.480
What are you working on right now?
00:17:32.880 --> 00:17:36.720
What's what's high on the the docket at CHLA?
00:17:37.039 --> 00:17:44.559
Funny you should ask, because in early September we're looking at unveiling uh a report, a white paper on Ginny May.
00:17:44.720 --> 00:17:50.799
Um you may remember in 2000, uh the world went to hell in a handbasket with COVID.
00:17:51.119 --> 00:18:00.000
And so, you know, issuers and Congress said to borrowers, oh, you don't have to pay your mortgage, which was an interesting perspective.
00:18:00.160 --> 00:18:04.640
Um, and so issuers were under stress from having to advance funds.
00:18:04.720 --> 00:18:10.319
I mean, remember, we asked issuers to be a banker, even though they're a non-bank to these borrowers.
00:18:10.559 --> 00:18:16.799
And so fortunately it was a strong environment for IMBs because rates were low and there was a lot of refi business.
00:18:16.880 --> 00:18:29.680
But what happens the next time that you know we have a spike in in um in um defaults, and uh issuers have to you know go back to their lenders and get more get more liquidity for that.
00:18:29.839 --> 00:18:34.480
So we're we're working on an expanded proposal for a standby liquidity facility.
00:18:34.640 --> 00:18:39.359
In other words, don't wait until the next crisis, set it ahead of time, build confidence in the system.
00:18:39.440 --> 00:18:48.160
It's a it reduces risk to Ginny, it reduces risk to bankers, it reduces risk to I to uh IMB Ginny May issuers.
00:18:48.240 --> 00:18:49.599
So we're we're coming out with that.
00:18:49.759 --> 00:19:02.640
Again, not not something that people, you know, and we're also gonna have a lot in there about what Ginny Mae is and how they operate, because I think most people in Washington, in the policy world, that's one of the areas of least understanding.
00:19:02.960 --> 00:19:24.880
Yeah, so let me just throw a broad blanket on this from the lens of my of anyone out there, probably I would say the majority of people probably think, all right, Fanny, Freddie, Ginny, government entities, they're probably all equally collateralized and uh you know all there.
00:19:26.160 --> 00:19:26.880
Getting choked up here.
00:19:26.960 --> 00:19:29.119
This I'm I'm maybe I'm about to get emotional.
00:19:29.359 --> 00:19:31.759
Uh I just have a little phlegm going on, Scott.
00:19:31.839 --> 00:19:32.559
So please forgive me.
00:19:32.640 --> 00:19:35.519
I'm gonna I'm gonna do a one throat clear here, you know?
00:19:35.599 --> 00:19:36.799
So I'm sorry, pause.
00:19:37.359 --> 00:19:39.119
We no, you know, no pause, no pause.
00:19:39.200 --> 00:19:41.839
I want to be as real as my audience wants me to be real, Scott.
00:19:41.920 --> 00:19:48.960
So I'm just gonna give it one because otherwise, you know, you get in these conversations with people like and then every 15 to 20 seconds they do that.
00:19:49.119 --> 00:19:50.799
Why not just one big clear?
00:19:50.960 --> 00:19:51.920
I'm gonna give it a clear.
00:19:52.000 --> 00:19:52.480
You ready?
00:19:52.640 --> 00:19:53.039
Yep.
00:19:55.599 --> 00:19:56.240
You see that?
00:19:56.640 --> 00:19:56.799
Okay.
00:19:56.960 --> 00:19:58.720
How much better does my voice sound now?
00:19:59.119 --> 00:20:01.119
You look you sound like an announcer.
00:20:01.440 --> 00:20:02.400
Oh, thank you very much.
00:20:02.640 --> 00:20:05.039
All right, so anyway, broad blanket.
00:20:05.440 --> 00:20:14.000
What why is Ginny so much different in terms of being insulated and and capitalized than um Fannie and Freddie?
00:20:14.480 --> 00:20:19.759
So it's like it's not even apples and oranges, it's like avocados and steak.
00:20:19.839 --> 00:20:20.319
I don't know.
00:20:20.480 --> 00:20:26.160
Um, the you know, Fannie and Freddie, they're in a lot of ways an insurance company.
00:20:26.240 --> 00:20:29.519
They buy huge slogs of mortgage loans and they have the risk.
00:20:29.599 --> 00:20:35.920
So in 2008, when when prices went down and mortgages went to a hell in a handbasket, they lost money.
00:20:36.160 --> 00:20:36.480
Okay.
00:20:37.039 --> 00:20:40.960
How much money do you think Ginny Mae lost in 2008 and 2009?
00:20:41.200 --> 00:20:50.240
The answer is they made money because they don't buy mortgages, they securitize FHA loans, which are already guarantees.
00:20:50.319 --> 00:20:54.640
They securitize VA loans, which are already guaranteed, they securitize RHS loans.
00:20:54.880 --> 00:20:58.480
So the risk is exceedingly low for them.
00:20:58.640 --> 00:21:05.039
They make money, they've made money every year for the last 20 years, except one year when they lost$30 million or something like that.
00:21:05.279 --> 00:21:13.519
So the issue is they're there for a purpose, they're there to facilitate a broad market of competitors.
00:21:13.680 --> 00:21:16.559
In other words, that's why we exist as an organization.
00:21:16.720 --> 00:21:20.079
We represent primarily small and mid-sized IMBs.
00:21:20.160 --> 00:21:23.680
And we think that consumers benefit by having a lot of us.
00:21:23.920 --> 00:21:36.960
And one of the ways, like in 2000, honestly, a lot of the aggregators, because of forbearance and other things, they, you know, they some of them dropped out for a while, some of them had really poor pricing.
00:21:37.119 --> 00:21:45.920
But it was the your like your firm and others that were in the market, you know, doing directly through Jimmy May that kept a competitive market.
00:21:46.000 --> 00:21:49.680
And that's what we that's why we're focusing on this issue.
00:21:51.920 --> 00:21:54.480
I don't know that I fully understand that answer.
00:21:55.039 --> 00:22:01.680
Well, I mean, if it worked, you in other words, you're saying there's a need to Set up a backstop just in case.
00:22:01.759 --> 00:22:03.519
So you don't have to panic and get that.
00:22:03.680 --> 00:22:04.640
That makes great sense.
00:22:04.720 --> 00:22:09.920
But then in the other breath, you say that they've only lost money once over the last 30 years or so.
00:22:10.000 --> 00:22:11.039
So what's broken?
00:22:11.119 --> 00:22:14.559
If I mean that's a pretty good track record, 29 out of 30 is pretty good.
00:22:14.880 --> 00:22:19.119
Because their making money is not the same as having a broad base of issuers.
00:22:19.279 --> 00:22:31.759
And if they decide to be uh, you know, excessively conservative and crack down on issuers when you get to that market, then you're gonna have uh, you know, people out of the market.
00:22:32.160 --> 00:22:33.279
All right, that's a great answer.
00:22:33.440 --> 00:22:40.000
I the the uh the other side of this coin is are you why now are are you fearful?
00:22:40.160 --> 00:22:53.839
Do you think, based on the history of you knowing the market and the trajectory and energy prices and recessions and all that stuff, that we could be heading to a moment where we're gonna need to make sure that's in place?
00:22:54.799 --> 00:22:59.279
I think it's I think it's an it's important enough to try to push for that.
00:22:59.359 --> 00:23:03.599
I mean, we're just we're not asking them to put it in place, we're asking them to to do some real work.
00:23:03.680 --> 00:23:05.279
In other words, figure out who should fund it.
00:23:05.359 --> 00:23:09.759
Should it be the Federal Home Loan Bank lending the banks or should it be the Federal Reserve?
00:23:10.319 --> 00:23:12.079
But do you think we're heading towards another crisis?
00:23:12.160 --> 00:23:13.839
Do you think I have no idea?
00:23:14.079 --> 00:23:14.559
Well, I do.
00:23:15.279 --> 00:23:15.920
I do, I do.
00:23:16.480 --> 00:23:17.119
Maybe you think.
00:23:17.200 --> 00:23:18.400
But here's the point.
00:23:18.640 --> 00:23:33.440
I was there, I worked on the Financial Services Committee during 2008, and the the the mortgage business went to hell in a handbasket, and we we came up with huge programs like HAMP and HARP in 20 days, okay?
00:23:33.680 --> 00:23:35.119
And could we have done better?
00:23:35.279 --> 00:23:41.920
Of course we could have, because we waited until there was a crisis to figure out how to deal with what a crisis would look like.
00:23:42.079 --> 00:23:44.400
So let's do some thinking ahead of time.
00:23:44.640 --> 00:23:50.319
So the next crisis, which might not be for 20 years, or it might be next year, who knows?
00:23:50.559 --> 00:23:55.359
So we're ready, and and that we, you know, that that's our that's our point.
00:23:55.440 --> 00:23:58.079
It's well something something has to give.
00:23:58.720 --> 00:23:59.759
Something has to give.
00:24:00.640 --> 00:24:15.839
Meaning you've got hot inflation, uh consumer sentiments terrible, uh debt is awful, delinquencies are going up, uh, gas prices are up, like if something has got to break.
00:24:16.480 --> 00:24:17.039
It will break.
00:24:17.119 --> 00:24:17.920
Something will break, right?
00:24:18.000 --> 00:24:19.119
It just is factual.
00:24:19.440 --> 00:24:22.160
Never in the history of mankind has something not broken.
00:24:22.559 --> 00:24:23.920
So what is it gonna be?
00:24:24.000 --> 00:24:34.319
And for me, I think it's gonna be uh the consumer is just gonna absolutely capitulate uh and and it's gonna make it harder to make mortgage payments.
00:24:35.039 --> 00:24:42.720
And when you don't make mortgage payments, defaults go up and eventually you you know typically head into a recession, rates go down.
00:24:43.119 --> 00:24:45.759
So I mean, you know that you know, you know this, right?
00:24:46.079 --> 00:24:50.240
And that's so I so I think that you know, I appreciate the work that you're doing.
00:24:50.319 --> 00:24:52.160
I'm just one opinion, obviously.
00:24:52.400 --> 00:25:03.759
Um I appreciate the work you're doing because I I don't know how it's gonna manifest itself, but it will be good if we get into a mode where that next crisis is closer than we think, and we have we have a facility in place.
00:25:03.920 --> 00:25:06.079
So thank you for the work that you're doing to that end.
00:25:06.400 --> 00:25:14.640
Um even though you don't necessarily agree with my thesis, although I'll ask you what do you think what do you think will break?
00:25:14.799 --> 00:25:20.160
I mean, is it gonna be um is it gonna be infl inflation?
00:25:20.240 --> 00:25:21.839
Is it gonna be wages?
00:25:22.000 --> 00:25:23.440
Is it gonna be house prices?
00:25:23.599 --> 00:25:26.400
Like what what of the options there are?
00:25:26.799 --> 00:25:29.039
Did you have any kind of a gut feel?
00:25:30.240 --> 00:25:33.519
Well, I think that I mean, I don't know, I'm just drawing on experience.
00:25:33.599 --> 00:25:48.559
I I remember in the in the 90s, you know, in the 80s and 90s, I mean going through the cycle, you know, prices went up and up and up, and and like in here, and then all of a sudden in '88, here in Washington, they stopped.
00:25:48.640 --> 00:25:53.680
In other words, and then 10 years later, prices were the same or lower, and that's how they adjusted.
00:25:53.759 --> 00:25:55.279
So that's kind of my best guess.
00:25:55.359 --> 00:26:00.559
I don't really understand that things are gonna be soft for an extended period of time.
00:26:00.799 --> 00:26:01.440
Yeah.
00:26:02.640 --> 00:26:05.519
What's it costing to fill up your tank these days?
00:26:06.319 --> 00:26:08.880
Uh four uh four dollars.
00:26:09.759 --> 00:26:10.559
Oh, I see.
00:26:11.359 --> 00:26:12.480
Oh, four dollars a gallon.
00:26:12.559 --> 00:26:12.880
Sorry.
00:26:13.119 --> 00:26:14.400
I was gonna say four dollars, man.
00:26:14.559 --> 00:26:16.240
What are you were you riding a tricycle to work?
00:26:16.319 --> 00:26:16.960
What's going on here?
00:26:17.039 --> 00:26:19.519
Um, is that just it only costs 12 bucks?
00:26:19.599 --> 00:26:25.200
I wait until the things this far above E, and then I put in three gallons, and then you know, two hours ago.
00:26:25.359 --> 00:26:27.200
Have you ever have you ever run out of gas?
00:26:27.519 --> 00:26:33.119
Just in the mountains of Arizona, driving across country from uh LA to Washington.
00:26:33.200 --> 00:26:33.920
It was not a good time.
00:26:34.000 --> 00:26:35.119
This was like Well, what happened?
00:26:35.279 --> 00:26:35.759
What happened?
00:26:36.079 --> 00:26:36.799
Walk us through it.
00:26:36.960 --> 00:26:38.240
This was before cell phones.
00:26:38.400 --> 00:26:42.640
A trucker gave us a ride, and then a trucker drove us back to with a gas can.
00:26:42.799 --> 00:26:44.720
So I I didn't I learned my lesson.
00:26:44.799 --> 00:26:47.119
I don't I don't think I've run out of gas since then.
00:26:47.200 --> 00:26:49.200
But I've run out of gas once.
00:26:49.519 --> 00:26:50.799
Yeah, it's the worst feeling.
00:26:50.960 --> 00:26:56.400
You know, because you all because well, because you always assume like you get the car, they're like, Oh yeah, when it's empty, it's not really empty.
00:26:56.480 --> 00:26:57.440
There's this reserve tank.
00:26:57.519 --> 00:27:00.160
So you always think that you can kind of straddle that.
00:27:00.400 --> 00:27:01.680
And it's the it's the worst.
00:27:01.839 --> 00:27:07.519
The only thing worse than that is is when that uh deflated tire indicator comes on your dashboard.
00:27:07.759 --> 00:27:08.160
Oh, yeah.
00:27:08.319 --> 00:27:09.359
That's that sucks.
00:27:09.519 --> 00:27:12.160
Yeah, you gotta get out, you gotta see how fast is it deflating.
00:27:12.240 --> 00:27:14.799
You know, I carry an air pump in my truck now, just in case.
00:27:15.359 --> 00:27:19.680
Greg, has anyone, uh anyone in your audience not run out of gas once in their life?
00:27:19.759 --> 00:27:20.799
I mean that's a great question.
00:27:20.880 --> 00:27:22.799
I'm gonna bring this up on no surrender today.
00:27:22.960 --> 00:27:24.079
That's that's a really good one.
00:27:24.240 --> 00:27:25.119
Thank you for that.
00:27:25.279 --> 00:27:27.440
You know what else I'm gonna bring up on No Surrender?
00:27:27.680 --> 00:27:31.119
Okay, um I'm like thinking of these quirky things.
00:27:31.359 --> 00:27:32.640
This is totally one off.
00:27:32.720 --> 00:27:33.599
I'm gonna catch you off guard.
00:27:33.680 --> 00:27:46.960
If you're in a grocery market, yeah, you're in a grocery store, and you walk up to a bag of grapes, is it okay to stick your hand in and grab a grape out and test it out to see if it has the level of sweetness that you need?
00:27:48.079 --> 00:27:52.400
Yeah, as long as you leave two pennies on the I'm serious, because I do that.
00:27:52.480 --> 00:27:53.839
I take a grape out of every bag.
00:27:54.000 --> 00:27:54.400
Do you?
00:27:54.640 --> 00:27:54.799
No.
00:27:55.039 --> 00:27:55.599
Are you gonna deny?
00:27:55.839 --> 00:27:58.319
Are you gonna deny that you've never taken a grape out?
00:27:58.559 --> 00:28:03.680
No, I get I buy the raspberries in the little bat in the little boxes, and so I just look at them.
00:28:03.759 --> 00:28:05.759
That's all I'm not a big grape person.
00:28:06.000 --> 00:28:07.200
What about cherries?
00:28:07.599 --> 00:28:08.079
Same thing.
00:28:08.960 --> 00:28:10.559
I'm can't always apples.
00:28:10.720 --> 00:28:15.680
Do you ever pick up the apples and like push your thumb into it to see if there are any soft spots?
00:28:16.160 --> 00:28:18.559
I'm gonna have to plead the fifth here on that one.
00:28:18.880 --> 00:28:20.160
Okay, yeah, I thought so.
00:28:20.400 --> 00:28:21.839
Um, all right.
00:28:21.920 --> 00:28:27.279
So so there's also um this topic you wanted to talk about break through the noise.
00:28:27.519 --> 00:28:28.079
Yeah.
00:28:28.400 --> 00:28:29.440
What is that?
00:28:29.759 --> 00:28:34.559
So, all of your listeners, you know, you you're in the mortgage business.
00:28:34.640 --> 00:28:41.759
And so uh one of the things I've learned over 30 years is everyone sort of thinks that that's what people are focused on, what they do.
00:28:41.920 --> 00:28:59.200
But in fact, Washington is this just cauldron of noise where you've got interest representing the securities industry, insurance, banking, uh, you know, all these different products, and they're all fighting to talk about themselves and talk about who they are.
00:28:59.279 --> 00:29:02.000
And then in mortgages, you have different players.
00:29:02.079 --> 00:29:10.480
And so the only the main reason CHLA was formed is we wanted to make sure there was an organization that exclusively represented IMBs.
00:29:10.720 --> 00:29:15.359
And since we've done that, we've we've gone now, we're like over 80% of the market.
00:29:15.440 --> 00:29:24.400
And so, but but we try to get out there and educate people about why IMBs are important, um, knock down myths.
00:29:24.480 --> 00:29:30.319
There are people are always running around saying we're gonna, you know, devastate the market because we're unsafe.
00:29:30.559 --> 00:29:37.279
Um, and then you know, fight for issues from a particularly distinct IMB perspective.
00:29:37.359 --> 00:29:38.799
But we don't kid ourselves.
00:29:38.960 --> 00:29:41.440
There's a lot of competition out there for attention.
00:29:41.519 --> 00:29:46.319
And so we need everyone to, you know, talk to their own members of Congress.
00:29:46.480 --> 00:29:51.839
We need everyone to be, well, not everyone to have their own talk show like you do, but you know, more of that.
00:29:51.920 --> 00:29:52.880
That's helpful.
00:29:53.119 --> 00:29:54.720
That's really helpful.
00:29:55.759 --> 00:30:05.359
So in in reading through some of the uh notes here, um, there's a line in here that IMB originators face Safe Act testing and licensing.
00:30:05.440 --> 00:30:07.440
Bank originators are exempt.
00:30:07.680 --> 00:30:09.599
Are you looking to do something about that?
00:30:09.759 --> 00:30:11.839
Are you looking to level that up in some way?
00:30:12.160 --> 00:30:13.200
We think it should be.
00:30:13.279 --> 00:30:18.160
We don't understand why they can't just be required to take the the SAFAC test.
00:30:18.319 --> 00:30:27.279
I mean, there's thousands of banks, there's thousands of loan originators that work for banks that fail the SAFAC test and they're allowed to be registered.
00:30:27.599 --> 00:30:28.319
Go figure.
00:30:28.559 --> 00:30:33.279
Well, they're also allowed, you know, LOs at banks, it's my understanding they can have terrible credit too.
00:30:33.359 --> 00:30:34.799
You can't if you're an IMB.
00:30:35.599 --> 00:30:38.319
Well, we don't think we want to move in the other direction on that.
00:30:38.400 --> 00:30:41.920
We don't think that credit should be a basis for getting a license.
00:30:42.000 --> 00:30:57.680
You know, having some uh, you know, healthcare problem in the past should be Well, the the R the argument is if you can't take care of your own credit, how are you going to advise other people to do that with the biggest decision of their life?
00:30:57.839 --> 00:31:01.359
That would be what the pundits would respond with.
00:31:02.319 --> 00:31:06.400
Okay, well, I I'm not sure I agree with that, but it should be a level playing field.
00:31:06.480 --> 00:31:07.519
That's our that's our point.
00:31:07.599 --> 00:31:08.880
It should be a level playing field.
00:31:08.960 --> 00:31:14.480
It's just hard though, because the the the fiction is that these you know banks never have problems.
00:31:14.640 --> 00:31:16.079
Well, yeah.
00:31:16.640 --> 00:31:18.079
Let's talk about condos.
00:31:18.640 --> 00:31:19.279
Yep.
00:31:19.759 --> 00:31:25.599
I mean, uh this this is a I'm not sure that all the numbers have worked their way through the system.
00:31:25.759 --> 00:31:29.920
They probably have not, but limited review is gone.
00:31:30.000 --> 00:31:33.440
Uh reserves have gone from 10 to 15 percent.
00:31:34.160 --> 00:31:37.519
Uh what do you feel like the ramifications are going to be?
00:31:37.599 --> 00:31:38.480
When will we feel it?
00:31:38.559 --> 00:31:40.240
And what do you want to do about it?
00:31:40.640 --> 00:31:46.079
Well, that's the that's the problem, is you know, it won't be that readily apparent to people on the outside.
00:31:46.240 --> 00:31:50.000
So we we we need to speak up about the impact this is having.
00:31:50.160 --> 00:31:52.880
So we've been out in front on this for a long time.
00:31:53.039 --> 00:31:59.920
I mean, they did some good things earlier this summer with insurance requirements, a little more flexibility on replacement cost and so on.
00:32:00.160 --> 00:32:04.000
But um, the limited review is is a big deal for us.
00:32:04.160 --> 00:32:08.000
Um, we think the complaints are gonna escalate as time goes on.
00:32:08.240 --> 00:32:11.279
Uh, we we're searching for some sort of compromise.
00:32:11.440 --> 00:32:14.960
I mean, they're saying that it shouldn't be a you know, no review.
00:32:15.039 --> 00:32:16.799
We're saying that maybe we can streamline.
00:32:17.039 --> 00:32:20.720
We're trying to figure that one out and see whether we can come back with a compromise.
00:32:20.880 --> 00:32:26.880
On the replacement reserves, that's a big deal, and that's gonna play out over the next year.
00:32:26.960 --> 00:32:33.519
We've been working closely with the Community Associations Institute, which is the top group representing condo owners.
00:32:33.680 --> 00:32:41.920
We kind of leave that issue to them, but uh we think this is gonna mean that you know the the dues at these condo associations are gonna go up.
00:32:42.000 --> 00:32:44.079
It's gonna make it hard to qualify for a loan.
00:32:44.240 --> 00:32:47.759
So we're we're trying to keep this issue on the front burner, and we're not afraid.
00:32:47.839 --> 00:32:55.200
We weer edited a letter with CAI with the mortgage brokers in July saying that they should you know revisit these issues.
00:32:55.519 --> 00:32:57.680
Do you have any sense as to what drove this?
00:32:58.720 --> 00:33:00.480
I mean, it starts with surfside.
00:33:00.640 --> 00:33:11.039
I mean, it starts with surfside, which was you know a geographic regional thing where uh you know a pool flooded the the place and collapsed a building.
00:33:11.200 --> 00:33:17.279
But since then, I think Fannie and Freddie have have done a deep dive on saying we don't we're not sure we understand what's going on.
00:33:17.440 --> 00:33:21.839
You know, there's like 50,000 uh associations across the country.
00:33:21.920 --> 00:33:26.240
It's hard to get a handle on you know which ones are well managed and which ones aren't.
00:33:26.400 --> 00:33:29.680
So policies, the right level of oversight is hard.
00:33:29.920 --> 00:33:33.279
Yeah, I mean, like we we do a lot of condos here uh at NFM.
00:33:33.359 --> 00:33:36.160
We have our own condo desk and condo reviews and all that stuff.
00:33:36.240 --> 00:33:44.400
And our limited reviews performed better than our full reviews, yeah.
00:33:44.640 --> 00:33:47.039
So wouldn't that be a smart place to start?
00:33:47.200 --> 00:33:49.119
Hey, what's performing and what's not?
00:33:49.440 --> 00:33:58.000
That's absolutely um the other thing, you know, and we're criticizing Fannie and Freddie, but you know, in some ways, FHA is is even more restrictive.
00:33:58.079 --> 00:34:06.400
And so we called a year or two ago, we were asking them, why don't you like if Fanny or Freddie have approved a project, why don't you make a loan against it?
00:34:06.480 --> 00:34:11.599
Why do we have all these different agencies, different processes that are so distinct?
00:34:11.760 --> 00:34:15.280
So this is a big issue, and we're gonna keep talking about it.
00:34:17.760 --> 00:34:19.199
Have we left anything on the table here?
00:34:19.360 --> 00:34:22.480
Anything else you want to talk about before I uh bid you ado?
00:34:23.039 --> 00:34:24.000
I don't think so.
00:34:24.239 --> 00:34:28.480
Uh just you were talking about the you know breaking through the noise.
00:34:28.639 --> 00:34:32.159
I mean, we've been trying to uh do that last week.
00:34:32.239 --> 00:34:38.559
We wrote a letter, you know, going back on the you know, you just sort of it's like Sisyphus pushing something up a hill on some of these.
00:34:38.639 --> 00:34:43.840
You know, we're saying that IMB should be eligible for federal home loan advances, but at a time.
00:34:43.920 --> 00:34:44.719
Oh, yeah, let's talk about that.
00:34:44.800 --> 00:34:45.039
Yeah, yeah.
00:34:45.119 --> 00:34:46.480
I'm sorry, I meant to bring that up.
00:34:46.639 --> 00:34:47.519
What is that?
00:34:48.159 --> 00:34:50.159
So explain explain that.
00:34:50.239 --> 00:34:52.559
What is what is it and why should the industry care?
00:34:52.800 --> 00:34:56.000
The federal home loan bank is the sort of the hidden GSE.
00:34:56.079 --> 00:35:01.440
No one focuses on them, they make advances, collateralized advances to banks for the mortgages.
00:35:01.599 --> 00:35:05.599
Well, basically, banks aren't doing mortgages anymore.
00:35:05.840 --> 00:35:18.239
Uh, so what we've said is, and this goes back to the Gini issue, is why not create a collateralized project that's funded by the federal home loan banks and they funnel them through the banks.
00:35:18.400 --> 00:35:23.360
The banks do the underwriting, but they do collateralized advances to help with Ginny advances.
00:35:23.519 --> 00:35:30.960
We just think that the federal home loan bank should be more focused on where the mortgages are being made, which is non-banks.
00:35:31.440 --> 00:35:36.000
So that anyway, and how will how will that help IMBs?
00:35:36.800 --> 00:35:40.000
Because we'll get more credit and more liquidity into the system.
00:35:40.239 --> 00:35:44.320
Will it will it will it add product or just more capital?
00:35:44.639 --> 00:35:45.840
Just more capital, yeah.
00:35:46.159 --> 00:35:47.599
More more more financing.
00:35:47.920 --> 00:35:52.800
So how how old were you when you first stepped foot into the capital?
00:35:54.159 --> 00:35:56.400
But then you're gonna be able to figure out how old I am.
00:35:56.480 --> 00:35:57.280
No, I'm not gonna go there.
00:35:57.360 --> 00:35:59.039
I'm not gonna ask for the year.
00:36:00.559 --> 00:36:02.639
It was 30 years 30 years ago.
00:36:02.880 --> 00:36:04.480
33 years ago.
00:36:04.800 --> 00:36:05.679
I started working.
00:36:06.559 --> 00:36:10.079
That you say you first stepped foot in the Capitol 33 years ago.
00:36:10.239 --> 00:36:11.440
So who is the most sorry?
00:36:11.519 --> 00:36:12.960
I lied 34 years ago.
00:36:13.199 --> 00:36:18.559
Who's the most famous politician you ever you've you've met through your Capitol Hill days?
00:36:19.039 --> 00:36:20.480
Bill Clinton, I guess.
00:36:20.800 --> 00:36:22.079
What was he like?
00:36:23.119 --> 00:36:24.400
He was smooth.
00:36:26.800 --> 00:36:29.599
I'll say but he just turned 80.
00:36:30.000 --> 00:36:38.639
I went to uh I went to uh the memorial service on the hill for uh for Barney Frank a couple weeks ago, and he showed up and made a speech.
00:36:38.800 --> 00:36:42.239
He's still he's he's aging, but he still kind of got it.
00:36:42.559 --> 00:36:43.599
He's still got it.
00:36:43.760 --> 00:36:44.079
Yeah.
00:36:44.320 --> 00:36:45.920
Uh are you a historian?
00:36:46.239 --> 00:36:50.639
My father was a history professor at the University of Wisconsin-Milwaukee.
00:36:50.800 --> 00:36:51.119
Why?
00:36:51.360 --> 00:36:52.880
And you went to Stanford, right?
00:36:53.039 --> 00:36:53.920
Yeah, yeah.
00:36:54.159 --> 00:36:55.440
Oh, you've done your work.
00:36:55.760 --> 00:36:57.760
That's a pretty good school, I hear.
00:36:58.159 --> 00:37:04.400
But I think history is history is uh, you know, nothing ever is really new.
00:37:04.480 --> 00:37:20.800
I mean, you know, we had that we had the SNL crisis in the 80s into the early 90s, and a lot of these lessons, you know, the the the Silicon Valley Bank, it was just the SNL crisis revisited in a different form 40 years later.
00:37:21.360 --> 00:37:23.760
A lot of this stuff just keeps repeating itself.
00:37:24.000 --> 00:37:26.880
Yeah, well, you wonder what what is going to be the next crisis.
00:37:27.039 --> 00:37:28.719
I feel like we're right, we're sitting right there, right?
00:37:29.039 --> 00:37:32.800
It's sound like you've done a lot more work than a lot of people in figuring that out.
00:37:33.119 --> 00:37:33.920
I think we're sitting.
00:37:34.000 --> 00:37:35.760
I mean, there's this thing, misery on the eights.
00:37:35.920 --> 00:37:43.119
Stan Middleman wrote about it in his uh biography, which was released last year, seeing around corners.
00:37:43.280 --> 00:37:43.679
Yeah.
00:37:43.920 --> 00:37:50.719
And historically, if you look at the last three decades or so, there has been something not good that has happened around the eights.
00:37:50.880 --> 00:37:57.280
You know, you mentioned 2008 and the financial crisis, 2018, COVID started to percolate.
00:37:57.360 --> 00:38:04.159
And, you know, this 2028, there's gonna be a reversal of home values, I'm telling you right now.
00:38:04.400 --> 00:38:10.960
So we're gonna go into a recession and rates are gonna go down, and it's gonna start the refi cycle, and that's what is gonna happen.
00:38:11.119 --> 00:38:15.840
Um I know I'm saying it as if I've seen it already, but look, you're talking about history.
00:38:15.920 --> 00:38:16.719
That's history.
00:38:16.960 --> 00:38:31.599
Well, my only take is, and this is me talking, not Claude, um, that the the the one of the big problems is that they're throwing so much money at AI, and a lot of this is private capital through you know private equity funding.
00:38:31.679 --> 00:38:33.360
And what happens if that implodes?
00:38:33.440 --> 00:38:35.199
I mean, when are the profits gonna come?
00:38:35.360 --> 00:38:39.119
Is there gonna be I mean, we see this in a lot of new burgeoning technologies?
00:38:39.280 --> 00:38:44.239
You have a you can have a bubble and then the Well, I think I just gonna accelerate unemployment, right?
00:38:44.400 --> 00:38:48.320
If it turns out to be something real, I mean, either way, we're hosed.
00:38:48.480 --> 00:38:52.880
If it turns out to be something really great, then it's gonna replace a lot of jobs.
00:38:53.039 --> 00:38:54.960
The unemployment rate is gonna go up.
00:38:55.119 --> 00:39:00.960
If it turns out to be a complete bust, all these big tech companies are gonna go belly up or whatever.
00:39:01.039 --> 00:39:02.320
They're gonna have a lot of distress.
00:39:02.480 --> 00:39:10.239
That's gonna impact people's 401ks, their confidence, uh, it's gonna erode um their uh their net worth.
00:39:10.320 --> 00:39:12.159
Like none of none of those scenarios are good.
00:39:12.239 --> 00:39:18.239
It just feels like we've been spinning around in this cocoon of shit for you know four or five years.
00:39:18.320 --> 00:39:20.800
And eventually just the bottom's gonna fall out.
00:39:21.039 --> 00:39:29.679
And uh my prediction is that bottom is gonna be a pretty severe recession and and that um people are gonna stop making their payments on their mortgages.
00:39:29.760 --> 00:39:36.480
I mean, I'm I'm already getting reports from a lot of people um in the mortgage business that that are making loans every day, Scott.
00:39:36.559 --> 00:39:44.559
This is something for you to track that there are more and more people calling up their loan officers saying, I'm desperate, help me.
00:39:44.719 --> 00:39:46.559
Can you do a cash out loan for me?
00:39:46.719 --> 00:39:56.559
Um and there's also uh reportedly, uh, at least in my circles, a record number of people that are making their mortgage payments later and later in the month.
00:39:57.119 --> 00:39:59.840
So they're going past their grace period of the 15th.
00:40:00.000 --> 00:40:07.360
Many people are now making them on the 22nd, the 23rd, the 24th, where they're not quite 30 days late, so it's not going to show up.
00:40:08.079 --> 00:40:12.000
But you're right on the precipice of them having to make a very serious decision.
00:40:12.079 --> 00:40:15.840
You know, and I heard food on my table, is it gas in my tank?
00:40:16.000 --> 00:40:17.760
Is it my mortgage payment?
00:40:18.079 --> 00:40:26.880
Well, I heard the other day that uh credit card debt is what, up 60% in whatever it's all-time record, it's well over a trillion, yeah, well over a trillion dollars.
00:40:27.199 --> 00:40:37.039
You know, it's it's and and that's there's a lot of people over the years that have said that the simple, you know, underwriting criteria that there's there's there's more inclusive ways of measuring this.
00:40:37.119 --> 00:40:42.719
But obviously, if people are stressed by you know growing debt, and you know, same thing with auto loans.
00:40:42.800 --> 00:40:45.280
It's like everyone they're talking about now seven-year loans.
00:40:45.360 --> 00:40:49.599
You're talking about uh, you know, prices are at unprecedented levels for cars.
00:40:49.760 --> 00:40:51.679
So people are carry a lot of debt.
00:40:51.760 --> 00:40:57.599
Obviously, they the last thing they want to do is default on their mortgage, but at a certain point, like you say, what can they do?
00:40:59.599 --> 00:41:01.519
So will you so you'll have me back?
00:41:01.840 --> 00:41:06.159
Will you have me back for another interview when some of the stuff that you're saying comes about?
00:41:07.360 --> 00:41:08.079
Yeah, of course.
00:41:08.159 --> 00:41:09.119
I love having you on here.
00:41:09.199 --> 00:41:10.320
You're you went to Stanford.
00:41:10.400 --> 00:41:11.679
How could I not have you on?
00:41:11.920 --> 00:41:13.920
I barely I barely made it through Maryland.
00:41:14.000 --> 00:41:15.679
I'm I'm surprised you even talk to me.
00:41:15.760 --> 00:41:16.880
I'm so dumb.
00:41:17.280 --> 00:41:19.039
You're you're obviously very smart.
00:41:19.199 --> 00:41:29.119
Uh, so you know, I'm I'm I'm usually intimidated when I talk to people from Harvard, Stanford, you know, the Ivies, but you, you know, you you have a way of putting you have a way of putting everyone at ease.
00:41:29.280 --> 00:41:31.440
I don't feel like you're judging me intellectually.
00:41:31.599 --> 00:41:32.400
So thank you for that.
00:41:32.480 --> 00:41:33.280
I appreciate that.
00:41:33.440 --> 00:41:38.159
Give me a quick thought on the deficit reaching$40 trillion.
00:41:39.519 --> 00:41:49.360
Well, I just, you know, I went to business school and I everything they taught me was a bunch of lies when they said, well, at a certain point you borrow so much money, rates have to go through the roof.
00:41:49.440 --> 00:41:51.199
And maybe that's starting to happen.
00:41:51.440 --> 00:41:54.559
But uh we we gotta we gotta fix Social Security.
00:41:54.719 --> 00:41:59.440
I mean, it's six years away from you know running out of money.
00:41:59.599 --> 00:42:03.920
And we gotta fix, we gotta, and neither party cares about the deficit.
00:42:04.239 --> 00:42:10.000
The the Republicans think you should just keep cutting taxes, and the Democrats think you should just keep spending money.
00:42:10.159 --> 00:42:13.039
And uh so I I don't know.
00:42:13.199 --> 00:42:21.599
That's you know, the only thing that's gonna change that is when foreigner when foreign investors start saying no mass.
00:42:21.920 --> 00:42:23.199
Yeah, exactly.
00:42:23.440 --> 00:42:30.960
Or, you know, when the when when the yen capitulates or uh yeah, you know, all these foreign entities just take all their money out of our treasuries.
00:42:31.039 --> 00:42:32.000
There's a lot going on for sure.
00:42:32.079 --> 00:42:37.280
Scott Olson, executive director of CHLA, Community Homelenders of America.
00:42:37.440 --> 00:42:39.199
I am a proud member.
00:42:39.360 --> 00:42:41.679
This is a great trade group to be a part of.
00:42:42.000 --> 00:42:42.320
Thank you.
00:42:42.480 --> 00:42:45.440
Not exp not expensive either, and you get a seat at the table.
00:42:45.599 --> 00:42:46.639
I can speak to that.
00:42:46.719 --> 00:42:50.239
Every Tuesday at noon, we all sit around and everyone has a voice.
00:42:50.400 --> 00:42:51.280
Very impactful.
00:42:51.440 --> 00:42:54.960
Thank you for the work you're doing and for your time here on one-on-one.
00:42:55.519 --> 00:42:57.199
As always, great to be on.
00:42:57.440 --> 00:42:58.960
All right, see you again next Monday, everyone.
00:42:59.119 --> 00:42:59.440
So long.
00:42:59.519 --> 00:43:00.480
Have a great week.
