Mortgages

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.

Review: How banks helped cause the housing crisis

2 November 2018

Why are homes so unaffordable in big Western cities? Josh Ryan-Collins blames decades of excessive mortgage lending rather than paltry building rates or planning rules. That’s depressing for millennials: the logical fixes are a much harder sell than just building more houses.

Spanish bank tax hit not as scary as it looks

19 October 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

Monzo traces faint path to digital-banking profit

16 October 2018

The UK startup won a million customers with next-to-no marketing, but keeps most funds at the central bank. CEO Tom Blomfield hopes to make money by selling other companies’ products, like insurance or mortgages, in return for a small fee. The numbers at least work on paper.

Time breathes life into America’s mortgage zombies

5 September 2018

It’s 10 years since Washington took over Fannie Mae and Freddie Mac, injecting $187 bln to render them undead. Reforms have not touched the supposedly temporary fix. A functioning home-loan market, revenue for the Treasury and inertia suggest taxpayers may be stuck with them.