Mortgages

Chancellor: U.S. credit cycle close to overheating

30 July 2021

Home prices and private-sector borrowing have taken off and credit standards continue to deteriorate. The end may not be nigh, but overvalued stocks and a massive lending boom, especially to corporations, make U.S. financial markets a particularly dangerous place for investors.

Fate of U.S. mortgage giants only half clear

23 June 2021

The Supreme Court’s blow to Fannie Mae and Freddie Mac investors leaves a fuzzy future. Bill Ackman’s fund and others had insisted the government illegally confiscated earnings. What Joe Biden wants to do with the firms backing half America’s homes may have bigger consequences.

Capital Calls: Platinum Equity, FTC chair, Tui

16 June 2021

Concise views on global finance: The buyout firm acquires textbook company McGraw Hill and the maker of Singer sewing machines; Joe Biden’s pick for the Federal Trade Commission brings swagger; and another capital hike will still leave the German holiday group heavily indebted.

Barclays’ Goldilocks moment faces lurking bears

30 April 2021

For the first time under CEO Jes Staley, the UK bank’s three main units all earned a quarterly return on tangible equity over 10%. A looming slowdown in capital markets and UK mortgages, combined with rising costs, means it may not last. That will keep Barclays shares in check.

New Zealand’s diluted punch bowl may tempt others

26 March 2021

Prime Minister Jacinda Ardern is combatting a hot housing market by stopping property investors from deducting mortgage interest. This mitigates side effects of low rates and allows the central bank to defer policy tightening. The approach might appeal to governments elsewhere.

UK banks’ mortgage wave may only be knee-high

29 October 2020

Lloyds CEO António Horta-Osório hopes a home-loan boom will offset pain from lower central-bank interest rates. But the spike in credit applications is partly pent-up demand from lockdowns. And stiff competition from HSBC and others may force lending margins downwards again.

UK housing crisis needs a well-aimed bazooka

6 October 2020

Prime Minister Boris Johnson wants to help 2 million Britons buy their first home. His ideas, from subsidising mortgages to unpicking post-crisis reforms, are risky and may make houses even costlier. His best bet would be to combine new tools with a massive building plan.

U.S. mortgage deals build on shaky foundations

23 September 2020

Public markets are luring two big mortgage firms as low rates and resilient house prices send loan demand to record levels. But 2020’s pandemic-skewed market is wacky, risky and unsustainable. Taking more share from banks could justify investor hype, though is hardly guaranteed.

ICE deal risks giving private equity a good name

7 August 2020

Thoma Bravo is making around a fourfold return in 16 months selling mortgage processor Ellie Mae to the bourse operator for some $9 bln plus debt. But ICE boss Jeff Sprecher isn’t overpaying. The pandemic, low rates and the target’s growth make this a smart deal for all.

Investors launch Rocket IPO into high orbit

7 August 2020

The largest U.S. mortgage lender ended its first day as a public company worth $43 bln. It’s justified if its stellar second-quarter results are sustainable. But chances are the three months were an industry anomaly, meaning gravity will soon pull shareholders back down to earth.

Mortgage IPO brings past crises to the fore

9 July 2020

Quicken Loans parent Rocket Companies is profitable, growing, top of its industry and has cutting-edge tech. Founder Dan Gilbert even drove Detroit’s revival. But as crashes like 2008 showed, economic pain hits specialist lenders hard. This time is unlikely to be different.

Bye, bye Mister Hedge Fund Guy

2 July 2020

Fund manager John Paulson had the guts to go all-in betting against subprime mortgages over a decade ago. Unable to replicate his biggest claim to fame, he’s turning his fund into a family office. He’s not alone in that, but it’s still a moment that bookends the financial crisis.

Tom Barrack’s accounting fight ignores fine print

16 April 2020

Colony Capital’s CEO wants officials to loosen mark-to-market rules following ructions in a corner of the mortgage market. He has a point. Firms shouldn’t be forced to unload assets in fire sales. But the rules already give industry players wiggle room. They should use it.

Spanish banks get slightly lighter loan albatross

3 March 2020

EU judges have ruled that local courts can resolve a dispute over unfair floating-rate mortgages. That could spare Spanish lenders billions of euros in potential losses. The catch is that the same loans are increasingly unprofitable as rates head south.

Door cracks open on U.S. housing reform

5 September 2019

Treasury officials want to get Fannie Mae and Freddie Mac out of their post-crisis limbo and allow them to retain more capital. Their new plan has merit in that it doesn’t entirely hinge on a dithering Congress, and gives them a better chance of enduring the next downturn.

Citi’s Northern Rock wager has political spice

2 April 2019

The U.S. bank bought 5 bln pounds of mortgages made by the lender which failed in 2008 from the UK government. The state cuts its debt load, and the buyer gets stable high-yielding assets. The risk is that a left-wing executive takes power, and forces lenders to cut rates.

Americans want new homes, just not these ones

21 February 2019

U.S. existing-home sales fell in January to a three-year low, the National Association of Realtors said on Thursday. More unsold homes and a dip in mortgage rates ought to help the market. But the dearth of starter homes means what’s available is increasingly out of reach.

Viewsroom: Down Under’s upheaval

14 February 2019

Falling house prices and slowing Chinese growth are putting Australia’s record of almost 28 years of economic expansion at risk. The banking industry got dinged after a gripping year-long investigation. And a change of government looks likely. Breakingviews dives into the issues.

U.S. mortgage fix is hostage to 2020 election

14 February 2019

Trump officials have hinted they may bypass Congress to overhaul Fannie Mae and Freddie Mac. The giant housing-finance firms’ proposed new overseer is certainly no fan. Reform is long overdue. But messing with Americans’ mortgages as a presidential vote looms is risky.

U.S. housing poses headwind for economy

9 November 2018

Online real-estate firm Zillow lowered its outlook, tanking its shares, while DIY chain Lowe’s is shuttering stores. Meanwhile mortgage applications have dropped as loan rates hit a nine-year high. If home buying continues to slow, the effects will be felt more widely.