BIDENOMICS - A NATION IN SHAMBLES

 

Boots on the Ground...Dec. 21st...Prepare as best as you can for economic hard times.

https://www.youtube.com/watch?v=qR-uCFFT1ck

BIDEN LIES ABOUT THE JOBS NUMBERS..... THEY'RE DISMAL!!!

GOOD TIME TO FLOOD AMERICA WITH 5 MILLION JOBLESS ILLEGALS!

Tucker Carlson Tonight 

https://www.youtube.com/watch?v=OBE9sEbyPYQ

BIDEN'S LIES ON THE ECONOMY

https://www.youtube.com/watch?v=PwmvCR5I6HA

25 Retailers And Restaurant Chains That Filed For Bankruptcy As All Hell Is Breaking Loose

https://www.youtube.com/watch?v=P4b_73EqYGk

Massive loads of debt, changing consumer habits, supply chain problems, and declining profits all combined to create a lethal cocktail of bankruptcies and store closures that affected many retailers and restaurants across the U.S. in recent years. When governments started to introduce pandemic shutdowns in 2020, hundreds of thousands of companies were already struggling with slower foot traffic, weak cash flow, and gigantic piles of real estate debt. The temporary closures only set off a crisis that was already in motion, and the uncertainty brought on by the new downturn sent many businesses over the edge. While about 10,000 retail stores closed since November 2019, more than 110,000 restaurants have been lost over that same period. For instance, over 400 Wendy’s locations have been sold in a 2021 bankruptcy deal. Since last year, over 130 Wendy’s restaurants have been closed all over the nation as its parent company struggles to renegotiate its $1 billion debt load. The survival of many underperforming locations is still on the line. With Wendy’s reporting a 10% profit loss in the last quarter, and its shares plummeting 26% since the start of the year, we soon may have to say goodbye to this beloved chain. Given that Pizza Hut is operated by the same parent company as Wendy’s, NPC International, the famous pizza chin may be doomed to a similar fate. Over the past twelve months, more than 300 Pizza Hut locations have been shuttered. Executives noted during the court filing that the restaurant “had already been losing money before the pandemic, but its advent accelerated the folding”. As one industry rises another goes down. With the rapid growth of e-commerce and food delivery services, many retail stores and restaurant locations are becoming redundant. Keeping a store open not only requires a reliable customer base but also good financial health to afford rampant real estate costs and rising wages. That's why these days companies are preferring to shut down their brick-and-mortar operations altogether and focus on relaunching their brands on online platforms to reduce costs and optimize profits. That may even save some popular brands that have been with us for decades. But at the same time, this also means that our shopping malls and city streets are likely to get even emptier, and that some of our beloved local stores where we've created wonderful memories may cease to exist before we even notice it. Unfortunately, that's the path the retail and food industry seems to be headed. In a matter of months, U.S. consumers saw many of their favorite stores close doors and never reopen. Businesses are still coping with one of the most turbulent economic environments since 2008, and the survival of many of them is still on the line. With a new economic recession on the horizon, we're likely to see many more storefronts go dark in 2023. But today, we compiled 25 retail companies and restaurant chains that already filed for bankruptcy over the past couple of years and are now either battling to keep their remaining locations open or finally saying their last goodbyes. For more info, find us on: https://www.epiceconomist.com/

With new mortgages down 47%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?

1.7k

Chris Clark

Tue, December 20, 2022 at 4:00 AM PST·6 min read

With new mortgages down 47%, US lenders are starting to go bankrupt — could this one factor trigger the worst surge of failures since 2008?

The real estate market just can’t catch a break, with inventory of resale homes remaining low and rising interest rates making it harder for buyers to justify making the leap.

And now we can add mortgage lender financial troubles — and the rise (and fall) of “non-qualified mortgages” — to the factors aggravating an already uncertain market.

A report from ATTOM reveals that new mortgage originations were down 47% in the third quarter of 2022 compared to the year before. That's a 19% decrease from the previous quarter and represents the biggest annual drop in 21 years. And while the chill in the market affects all lenders, non-bank lenders — especially those who deal in NQM — are bearing the brunt of it.

But what does the trouble around these NQM mortgages really mean? And what does it mean for non-traditional buyers trying to get a foothold in the market?

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A “non-qualified” mess?

NQMs use non-traditional methods of income verification and are frequently used by those with unusual income scenarios, are self-employed or have credit issues that make it difficult to get a qualified mortgage loan.

They’ve previously been touted as an option for creditworthy borrowers who can’t otherwise qualify for traditional mortgage loan programs.

But with First Guaranty Mortgage Corp. and Sprout Mortgage — a pair of firms that specialized in non-traditional loans not eligible for government backing — running aground this year, real estate experts are beginning to question their value.

First Guaranty filed for bankruptcy protection in the spring while Sprout Mortgage simply shut down early this summer.

In documents tied to its bankruptcy filing, First Guaranty leaders said once interest rates started to climb, lending volume dropped and left the company with more than $473 million owed to creditors.

Meanwhile, Sprout Mortgage, which leaned heavily on NQMs, abruptly shut down in July. And real-estate tech startup Reali has shuttered as well.

Other non-bank lenders are being forced to streamline to stay afloat. A report from HousingWire says retail lenders Angel Oak, Lower.com and Keller Mortgage have all had to introduce layoffs given the tough market conditions.

Do NQM’s signal another housing meltdown? Probably not

Most housing market watchers believe today’s conditions — led by stricter lending rules — mean the U.S. is likely to avoid a 2008-style housing market meltdown.

But failures among non-bank lenders could still have a significant impact. The NQM share of the total first mortgage market has begun to rise again: NQMs made up about 4% of the market during the first quarter of 2022, doubling from its 2% low in 2020, according to CoreLogic, a data analysis firm specializing in the housing market.

Part of what has contributed to the recent popularity of NQMs is the government’s tighter lending rules.

Today’s NQMs are largely considered safer bets than the ultra-risky loans that helped fuel the 2008 meltdown.

Still, many NQM lenders will be challenged when loan values start falling, as many are now with the Federal Reserve’s moves to raise interest rates. When values drop, non-bank lenders don’t always have access to emergency financing or diversified assets they can tap like larger banking lenders.

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Banks can also lean on safer qualified loans because they factor in traditional income verification, more stringent debt ratios and don’t carry features like interest-only payments.

However, major U.S. banks are beginning to see business cool thanks to slowing mortgage originations. The Fitch report points out that Citi, JPMorgan and Wells Fargo each had to reduce their staff and operations, while Satander exited the U.S. mortgage market early this year, partnering with another company to issue mortgages to customers.

It’s important to note that if you have a mortgage through a lender that’s now bankrupt or defunct, that doesn’t mean your mortgage goes away.

Typically, the Federal Deposit Insurance Corporation (FDIC) works with other lenders to pick up orphaned mortgages, and the process happens quickly enough to avoid interruptions in paying down the loan.

One number rules them all

While many factors drag on the real estate market, one data point carries the most significance: interest rates.

With the Fed’s laser focus on raising rates to cool inflation, there’s little reason to think the effect on lending and the broader housing market will ease anytime soon.

Higher mortgage rates will dictate how much home they can afford. As of mid-December, the average 30-year fixed rate has dipped slightly from its peak of 7% at the end of October to 6.31%.

(This also affects sellers, many of whom will eventually become buyers and likely depend on loans.)

Between a potential shakeout among non-bank lenders, more stringent lending rules forced on banks and the Fed’s higher rates, there are many reasons for caution on all sides.

Buyers — especially those carrying traditional loans to the offer table — will need to be buttoned up. In addition to making sure their credit is in order to meet tightening bank lending standards, they may need to consider other tactics, like offers that are higher than the seller’s asking price and other concessions, such as waiving repair costs for problems uncovered during inspection.

On the flip side, sellers may be more motivated by all-cash offers, which typically speed the closing process by removing traditional mortgages — and rising interest rates — from the picture.

As for would-be sellers, they may want to consider waiting to list their homes until the next upswing. Despite geographic pockets of rising values and high demand, a broader nationwide cooling trend may make staying put a prudent choice.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.