Finance
‘2022 has been the scariest year of my adult and professional life’: One mortgage broker reveals how the housing slowdown upended financial security.
When mortgage charges hit 7% within the fall, Austin-based mortgage dealer Aaron Kovac was slightly spooked.
After a surprising rise in residence gross sales amid ultra-low rates of interest, “the market simply went completely silent,” the 32-year-old, who has been within the mortgage trade for six years, advised MarketWatch in an interview.
Because the housing market hunch drags on, concern has taken over. “That is my first time going by means of a decline within the real-estate market,” Kovac stated, “2022 has been the scariest yr of my grownup {and professional} life.”
“It’s the identical story in all places — not simply with different lenders, but additionally with actual property brokers,” he added.
Folks within the real-estate trade are feeling the ache, as consumers keep on the sidelines, reluctant to purchase properties. In the meantime, charges stay firmly above 6%.
“Should you have been doing 4 to eight loans a month, you’re fortunate when you have one or two proper now. Many individuals that I’ve spoken to within the trade, together with myself, have thought, ‘Do I get out? Do I want a second job to carry issues over till the market picks up once more?’” Kovac stated.
And the stress from the dip in shoppers is weighing on his private funds, and psychological well being, Kovac stated: “All that uncertainty, questioning, the place is my subsequent paycheck going to come back from? The place am I going to search out that subsequent purchaser?”
Housing trade being ‘right-sized’
The true-estate trade is present process a serious shift as charges spike, with lenders and brokerages trimming their workers to chop losses.
As demand surged, he variety of employees within the mortgage trade additionally rose, as seen within the chart beneath:
However as charges rose and consumers backed off, situations prompted re-sizing.
Actual-estate brokerage Redfin went by means of two rounds of layoffs, in June and in November, lowering headcount by 27%. Compass, one other brokerage, additionally laid off workers amid the housing downturn.
Lenders have been additionally affected, from Higher — which laid off 900 workers by way of a Zoom assembly — to Rocket Mortgage, which supplied 8% of its workforce voluntary buyouts. JP Morgan Chase additionally laid off a whole lot of workers in its residence lending enterprise. One Texas-based lender, First Warranty Mortgage Corp., filed for Chapter 11 chapter in June.
Given the drop in mortgage originations, the sector must shed roughly between 1 / 4 to a 3rd of jobs to “right-size the entire trade,” Mike Frantantoni, the Mortgage Bankers Affiliation in trade group’s chief economist, advised MarketWatch earlier this yr. He additionally wrote an article concerning the numbers in August.
‘It’s like sharks smelling blood within the water’
For these working within the mortgage trade, like Kovac, the scenario on the bottom is tense, to say the least.
Being in Austin, a scorching pandemic real-estate market, demand was robust during the last two years since mortgage charges have been at file lows. In January 2022, Kovac stated he locked in a mortgage for a purchaser with a charge of two.75% – the bottom this yr he secured for a shopper.
However quick ahead to mid-November, charges had jumped a lot that shoppers weren’t blissful: That month, he had closed a mortgage for a unique purchaser with a charge of seven.65%.
Whereas these debtors had completely different credit score scores, quantities down for cost and such, therefore had completely different charges quoted to them, the huge distinction between the 2 was one thing out of Kovac’s palms.
At this level, lenders are scrambling to search out enterprise. “If there’s a purchaser on the market within the trade seeking to purchase, each lender is combating over them and making an attempt to go as little as potential,” Kovac stated. “It’s like sharks smelling blood within the water proper now.”
Kovac, who’s a dealer with Good Religion Mortgage, and his spouse, who can also be within the mortgage trade, have trimmed their family budgets as a lot as they’ll to remain nimble.
Kovac bought his truck, which saves him about $1,200 a month, and minimize many subscriptions reminiscent of Amazon Prime and Netflix, to decrease month-to-month bills. He stated he additionally needed to cancel a number of journeys, together with flights again residence to Chicago for his stepfather’s birthday and for his greatest good friend’s marriage ceremony, and to Mexico Metropolis for his spouse’s grandfather’s funeral.
Apart from the mortgage on his present residence, he is also paying off about $44,000 in scholar mortgage debt.
He’s additionally exploring other ways to become profitable, from sharing a few of his experience on social media, and writing a weblog.
However it’s powerful, since he’s self-employed and enterprise is down. When he was beforehand with a financial institution, whereas he stated he had much less freedom, he at the least was drawing on a steadier wage and had medical advantages.
These days, shoppers are getting pissed off as charges fluctuate, typically a number of occasions a day, Kovacv stated.
By the point a shopper will get pre-qualified for a mortgage, seems for a home, and comes again to the lender a few weeks later, charges would have gone up, and he’d have to interrupt the information to them.
“And after I present that new up to date pre-qualification letter, they’re like, ‘Whoa, why is the rate of interest a lot greater?’ It’s virtually like they assume that we’re taking part in some type of bait and change, which isn’t the case,” he stated.
Competing with residence builders and the offers that they’re throwing at residence consumers has been one other battle. Many builders have supplied charge buydowns, supplied to pay closing prices, amongst different incentives, to entice consumers to buy a house.
“Any time I pre-approve a shopper after which they arrive again and provides me a contract and it’s from a builder, I do know with 99% certainty that I’m dropping that deal,” Kovac stated, “as a result of there’s no manner any lender can compete with what they’re providing.”
Whereas 2022 has been a “scary” yr for Kovac, he’s hoping 2023 will carry him higher fortunes as his household navigates the vagaries of mortgage charges.
“We don’t know what the longer term holds for us… we’ve simply been holding our breath all yr,” Kovac stated, “as a result of there’s a lot uncertainty within the trade, that’s been resulting in uncertainty in our private funds.”
Should you’re within the housing trade and want to share your story, attain out to MarketWatch housing reporter Aarthi Swaminathan at aarthi@marketwatch.com
Finance
GOP Rep. Andy Ogles faces reelection amid FBI campaign finance probe
Andy Ogles, a freshman Republican from Tennessee, is hoping to retain his seat in the U.S. House of Representatives amid an FBI investigation into alleged discrepancies in his 2022 campaign finances.
As the first-term congressman seeks reelection, he will face a strong challenge from Democrat Maryam Abolfazli, a progressive advocate from Nashville, in a district that has become increasingly competitive following recent redistricting.
Ogles, a member of the conservative House Freedom Caucus, confirmed in August that federal agents had seized his cellphone as part of an ongoing investigation into his campaign’s financial filings.
The inquiry stems from reported inconsistencies in Ogles’ 2022 records, including a $320,000 loan he initially reported making to his campaign.
Newsweek has contacted Ogles’ office for comment via email.
What is Andy Ogles Accused Of?
Ogles later amended his filings, lowering the figure to $20,000, and explained that the larger amount had been a pledge, not an actual loan, which he claimed was mistakenly included in the reports.
In addition to the phone seizure, FBI agents obtained a warrant to access Ogles’ personal email account.
However, according to court documents, investigators have yet to review the contents of the account.
Ogles has publicly stated that he is fully cooperating with the investigation and believes the discrepancies were the result of honest errors.
Why is Nashville Left-Leaning?
The scrutiny follows an ethics complaint filed in January 2023 by the Campaign Legal Center, which raised concerns about potential violations related to his personal and campaign finances.
The nonprofit, which advocates for transparency in political funding, compared Ogles’ situation to that of embattled New York Rep. George Santos, who has faced numerous investigations into his own campaign finances.
Ogles represents Tennessee’s 5th District, a Republican-leaning area that includes a portion of the liberal-leaning city of Nashville and stretches through five more conservative counties.
Although the district remains solidly Republican, the influence of Nashville’s progressive voters, combined with shifting national political dynamics, has created a potentially more competitive race than in the past.
In the 2022 election, Ogles won the seat by more than 13 percentage points, a result bolstered by the Republican-led redrawing of the state’s congressional districts after the 2020 census.
Lawmakers split Nashville into three separate districts, forcing longtime Democratic Rep. Jim Cooper into retirement and shifting the state’s congressional delegation to an overwhelming GOP majority.
Ogles’ district now includes part of the newly drawn 5th District, which spans from the Democratic stronghold of Nashville through more conservative rural counties. The redistricting was seen as a strategic move by Republicans to strengthen their hold on the state’s congressional seats.
Ogles faces a tough challenge from Maryam Abolfazli, a Nashville-based nonprofit leader and activist.
Who is Maryam Abolfazli?
Abolfazli, the founder of Rise and Shine TN, has been a vocal advocate for stronger gun control in the wake of the tragic shooting at the Covenant School in Nashville in March 2023, which left six people dead, including three children.
Since entering Congress, Ogles has become known for his vocal opposition to the Biden administration and his alignment with the most conservative factions of the Republican Party.
Beyond his financial controversies, Ogles has faced criticism for past statements about his educational background.
After a news outlet questioned his claim of holding an international relations degree, Ogles admitted to overstating his credentials, saying he was “mistaken” about his academic history.
Ogles, a former mayor of Maury County and state director for the conservative group Americans for Prosperity, remains a staunch defender of conservative policies.
He has filed multiple articles of impeachment against President Joe Biden and Vice President Kamala Harris, citing their administration’s policies on border security, the economy, and other issues.
Following Biden’s announcement that he would not seek reelection in 2024, Ogles introduced new articles of impeachment targeting Harris.
As the race in Tennessee’s 5th District heats up, Ogles’ ability to navigate the FBI investigation, manage his financial controversies, and hold onto his conservative base will be key to his chances of securing a second term.
This article contains additional reporting from The Associated Press
Finance
Stock market today: Asian shares are mixed after Wall Street drifts ahead of US Election Day
NEW YORK (AP) — Shares were mixed in Asia early Tuesday after U.S. stock indexes drifted lower a day ahead of the U.S. presidential election.
This week will bring various potential flashpoints, among them Election Day in the United States. But the results may not be known for some time as officials count all the votes, and that could bring sharp swings since markets hate uncertainty.
U.S. futures were virtually unchanged early Tuesday.
Adding to the potential for volatility, the Federal Reserve will also be meeting on interest rates later this week. The widespread expectation is for it to cut its main interest rate for a second straight time.
Investors also hope the Chinese government may announce stimulus for the world’s second-largest economy.
Japan’s Nikkei 225 index gained 1.3% to 38,552.67, reopening after a holiday on Monday.
South Korea’s Kospi fell 0.7% to 2,569.75, while the S&P/ASX 200 in Australia dropped 0.6% to 8,117.30.
The Standing Committee of China’s National People’s Congress is meeting this week, and analysts say the government may endorse major spending initiatives to boost economic growth amid troubles for the country’s real-estate industry.
The official Xinhua News Agency reported that the lawmakers had reviewed legislation to raise ceilings on local government debt to replace existing hidden debts, part of a process to arrange debt swaps to help resolve the financial woes brought on by the pandemic and by a collapse in the property market in recent years.
Hong Kong’s Hang Seng was up 0.1% at 20,597.30 and the Shanghai Composite index picked up 0.4% to 3,323.26.
On Monday, the S&P 500 slipped 0.3% to 5,712.69, remaining near its record set last month. The Dow Jones Industrial Average fell 0.6% to 41,794.60, while the Nasdaq composite slipped 0.3% to 18,179.98.
Intel fell 2.9%, and chemical producer Dow sank 2.1% in their first trading since getting notified they’ll no longer be included in the Dow Jones Industrial Average. Warren Buffett’s Berkshire Hathaway dropped 2.2% and was one of the heaviest weights on the market after reporting a drop in operating profit for the latest quarter.
But the majority of stocks within the S&P 500 rose, including a 2.8% gain for Fox after it reported a stronger profit than expected.
The hope that’s propelled U.S. stock indexes to records recently is that the U.S. economy can remain resilient and avoid a long-feared recession, in part because of the coming cuts to rates expected from the Fed.
The broad U.S. stock market has historically risen regardless of which party wins the White House. And in 2020, U.S. stocks climbed immediately after Election Day and kept going even after former President Donald Trump refused to concede and challenged the results, creating plenty of uncertainty. A large part of that rally was due to excitement about the potential for a vaccine for COVID-19, which had just shut down the global economy.
Finance
University of Phoenix and Goalsetter Launch Financial Wellness Webinar Series
Virtual, free series features Goalsetter’s award-winning curriculum along with guest speakers to support financial wellness
PHOENIX, November 04, 2024–(BUSINESS WIRE)–University of Phoenix is pleased to announce a new webinar series with Goalsetter, an award-winning financial education platform dedicated to helping individuals and families achieve financial wellness through engaging and practical resources. The ten-part series will launch with a discussion on “Managing Credit Card Debt and Fostering Good Credit Habits,” on Tuesday, November 19, at 12 p.m. MST. Featuring Tanya Van Court, Founder and CEO of Goalsetter, Kevin Soehner, Senior VP of Operations for iGrad®, and moderated by Chris Conway, Director of Financial Literacy at University of Phoenix, the discussion will focus on building good credit habits, understanding interest rates, and how credit can impact personal finance decisions. Throughout the series, participants will gain valuable insights and practical strategies to manage their finances and plan for a secure financial future, as well as have the opportunity to engage in a Q&A session during each webinar.
“At University of Phoenix, we are committed to equipping our students with the knowledge and tools necessary for financial success,” shares Director of Financial Literacy at the University, Chris Conway. “Our collaboration with Goalsetter aligns with our mission to empower students not only in their academic and career pursuits but also in their financial lives by helping them save time and money. This webinar series is designed to provide practical strategies and insights that can help learners make informed financial decisions.”
Each month during the series, University of Phoenix and Goalsetter will offer webinars focused on key strategies for financial wellness:
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November: Managing Credit Card Debt and Fostering Good Credit Habits
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December: Paying for School and Scholarships
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January: The Art and Science of Effective Budgeting
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February: Stop Overspending: 5 Tips
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March: Yes! You Can Save Money: Little Actions that Add Up
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April: Emergency Funds are Critical; How to Create Them, Even If You Think You Canʼt
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May: Why Credit Scores are Important and How to Improve Them
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June: How to Plan for Your Eventual Retirement
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July: Investing in Your Families’ Future
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August: How to Set Your Kids Up for Future Financial Success
“Our mission is to empower every individual with the financial knowledge they need to secure a strong financial future,” says Van Court. “By working with the University of Phoenix, we are bringing our award-winning financial education tools to a larger audience, helping individuals and families gain the practical skills to make informed financial choices. Together, we aim to create a pathway toward financial freedom that’s accessible, engaging, and transformative.”
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