Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
You're right, but everyone was implicated in the disaster, certainly not just banks. Realtors convinced buyers that they needed more house and that equity would only rise. Brokers pitched these non-traditional loans. Securities managers bundled them. Investors bought them. Everyone made bad decisions.
Absolutely! I’d call for appraisals and they asked me “what value do you need to make the loan work”? Totally backwards
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
No that is not why mortgage rates trended down, man. Wish it were that easy though. lol
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
You're right, but everyone was implicated in the disaster, certainly not just banks. Realtors convinced buyers that they needed more house and that equity would only rise. Brokers pitched these non-traditional loans. Securities managers bundled them. Investors bought them. Everyone made bad decisions.
Absolutely! I’d call for appraisals and they asked me “what value do you need to make the loan work”? Totally backwards
Great example. I forgot about the appraisers.
A big ‘ol toxic stew of greed, all the way around. Glad I stayed where I was, doing what I was doing, none the wiser. Hey, but get them repubs back in and they’ll dispense with that gubmint overreach oversight, right?
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
Sounds like you got out before HARP then?
I did FHA loans for a little after until I started to absolutely hate the job then I left.
Houses are about inflation when the price stays but the interest rate doubles.
I don't know why NY hasn't got the memo on the price drops yet for the cars? I'll be sure to let you know when I actually see that happen.
Well for new homes, yeah, as they're dependent on building supplies and stuff.
The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe.
New homes? Shit, all home , Holmes.
The mortgage rates are in connection to the fed rates though. The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
Yes because the fed funds rate controls the rate at which banks borrow from each other. So if that goes up, banks must raise consumer interest rates, unless they are suddenly into charity lending.
Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.
I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed.
They actually lowered rates because buying came to a standstill. They had to do something. It's still not good enough though.
The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above.
If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!
Yes Mortgage rates, they went down when the buying stopped. That is an interesting chart with he Tnotes and mortgages. I'll have to follow that one too.
Mortgage rates will have to go down if they want the average person to own a home.
Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative. They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money. So the fed rate is critical to the calculation. When the fed raises the rate, it's explicitly done to slow lending.
Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?
Banks know how to make money for sure.
Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground.
Sounds like you got out before HARP then?
Wasn't HARP just for refinancing existing loans?
Yep. Home Affordable Refinance Program. It ended in 2018 or 2019 but it was a glorious decade to be in the mortgage industry if you worked at a company who offered that program.
Is this new mortgage proposal actually real or is it right wing hyperbole? Are we actually considering rewarding subpar credit and punishing people who did the right thing in their lives? Does anyone here actually agree with this?
Is this new mortgage proposal actually real or is it right wing hyperbole? Are we actually considering rewarding subpar credit and punishing people who did the right thing in their lives? Does anyone here actually agree with this?
As with just about everything, it is right wing hyperbole. No, people with lower credit scores are not paying less than people with higher credit scores. They just lowered the llpa's so the lower credit score borrower's aren't getting as crushed as they were before. So if you have excellent credit you are still getting the absolute lowest rate and best pricing out there, its just that the gap isn't as wide as it was previously.
Seemingly overnight, the internet is awash with news regarding a "new," unfair tax on mortgage borrowers with higher credit scores. Some have gone so far as to suggest that someone could intentionally lower their credit score in order to get a better deal.
Before you stop paying your bills in the hope of cashing in, let's separate fact from fiction. First and most importantly, you will absolutely NOT get a better deal on a mortgage rate if your credit score is lower, even if your nephew just texted you a screenshot of a news headline saying "620 FICO SCORE GETS A 1.75% FEE DISCOUNT" and "740 FICO SCORE PAYS 1% FEE."
So why would your nephew make such a claim?
This all has to do with changes to Loan Level Price Adjustments (LLPAs) imposed by Fannie Mae and Freddie Mac (the "agencies"), the two entities that guaranty a vast majority of new mortgages. LLPAs are based on loan features such as your credit score and the loan-to-value ratio among other things. They've been changed several times over the years and a fairly substantial change was announced in January of this year.
Wait... This news is from JANUARY?! Why are people talking about it now?
Yes, in fact, we already told you about it. People are confused because they don't understand how "delivery dates" work when it comes to Fannie and Freddie. Changes that impact fees and guidelines are almost always implemented based on the date the loan in question is "delivered" to Fannie/Freddie. "Delivery," in this context, typically occurs a matter of weeks AFTER the loan is closed, although it can be more than a month.
Now consider that a closed loan has often been quoted and locked for more than 3 weeks--call it a month to be safe. Since these changes go into effect on loans delivered on or after May 1st, 2023, lenders began to implement them weeks ago. Many lenders implemented them months ago--especially for loans that are locked for longer periods of time.
So low credit borrowers are already getting a discount while high credit borrowers pay more?
Not exactly, and this is where the confusion comes in. Also, from here on out, please note that there is no opinion offered here as to whether this is good/bad/etc. The only goal is to clear up confusion and offer facts.
The fact of matter is that LLPAs are indeed changing in a way that improves costs for those with lower credit scores and increases costs for those with higher credit scores (in many cases, anyway). But people are confusing the CHANGE for the ACTUAL cost.
So a low credit borrower isn't paying less than a high credit borrower? The gap between what they pay is just smaller than it was?
YES! Again, all value judgements and political commentary aside, the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores, but there's no scenario where someone with lower credit will have a lower fee. In other words, don't go skipping those credit card payments in the hopes of getting a lower rate.
How about some color-coded charts/tables?
I thought you'd never ask. Let's start with the changes that have everyone so upset. The following tables shows the DIFFERENCES in LLPAs before and after the change. RED = rising costs. GREEN = falling costs.++
If you only saw this chart, you could be forgiven for thinking someone with a 640 credit score was paying less than someone with a 740, but again, these are just the changes.
Now let's look at a table with OUTRIGHT LLPAs for the same matrix of credit scores and loan-to-value ratios. This is the NEW structure, after the implementation of the change.
As you can now plainly see, if you have a score of 640, you'll be paying significantly more than if you had a 740. Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That's a difference of 1.375%, or just over $4000 on a $300k mortgage. This is almost HALF the previous difference, and that's certainly a big change.
Yes, it's a big change, so why is the government doing this to people with higher credit?!
Note in the first two tables that there is more of an improvement for the lower FICO rows on PURCHASES (i.e. home ownership vs refis).
Any other misconstrued news I need to know about?
Yes, actually. While not as viral as the LLPA stuff, there has been a fair amount of press on a new 40yr FHA mortgage. THERE IS NO NEW 40yr FHA LOAN! Lenders who collect payments on FHA loans have a new option to offer loan modifications with terms of 40 years to borrowers who are unable to pay their existing FHA loans.
Don't you usually talk about financial markets in these newsletters?
Indeed! But since we've taken a fair amount of space on more interesting stuff above, we can keep the market recap fairly short. Rates moved higher to start the week as economic data was strong on Monday morning. There were several other examples of reactions to economic data at home and abroad as the week continued, but all of them played out in a sideways range that continues to wait on the first two weeks of May for the most relevant input.
Is this new mortgage proposal actually real or is it right wing hyperbole? Are we actually considering rewarding subpar credit and punishing people who did the right thing in their lives? Does anyone here actually agree with this?
As with just about everything, it is right wing hyperbole. No, people with lower credit scores are not paying less than people with higher credit scores. They just lowered the llpa's so the lower credit score borrower's aren't getting as crushed as they were before. So if you have excellent credit you are still getting the absolute lowest rate and best pricing out there, its just that the gap isn't as wide as it was previously.
Seemingly overnight, the internet is awash with news regarding a "new," unfair tax on mortgage borrowers with higher credit scores. Some have gone so far as to suggest that someone could intentionally lower their credit score in order to get a better deal.
Before you stop paying your bills in the hope of cashing in, let's separate fact from fiction. First and most importantly, you will absolutely NOT get a better deal on a mortgage rate if your credit score is lower, even if your nephew just texted you a screenshot of a news headline saying "620 FICO SCORE GETS A 1.75% FEE DISCOUNT" and "740 FICO SCORE PAYS 1% FEE."
So why would your nephew make such a claim?
This all has to do with changes to Loan Level Price Adjustments (LLPAs) imposed by Fannie Mae and Freddie Mac (the "agencies"), the two entities that guaranty a vast majority of new mortgages. LLPAs are based on loan features such as your credit score and the loan-to-value ratio among other things. They've been changed several times over the years and a fairly substantial change was announced in January of this year.
Wait... This news is from JANUARY?! Why are people talking about it now?
Yes, in fact, we already told you about it. People are confused because they don't understand how "delivery dates" work when it comes to Fannie and Freddie. Changes that impact fees and guidelines are almost always implemented based on the date the loan in question is "delivered" to Fannie/Freddie. "Delivery," in this context, typically occurs a matter of weeks AFTER the loan is closed, although it can be more than a month.
Now consider that a closed loan has often been quoted and locked for more than 3 weeks--call it a month to be safe. Since these changes go into effect on loans delivered on or after May 1st, 2023, lenders began to implement them weeks ago. Many lenders implemented them months ago--especially for loans that are locked for longer periods of time.
So low credit borrowers are already getting a discount while high credit borrowers pay more?
Not exactly, and this is where the confusion comes in. Also, from here on out, please note that there is no opinion offered here as to whether this is good/bad/etc. The only goal is to clear up confusion and offer facts.
The fact of matter is that LLPAs are indeed changing in a way that improves costs for those with lower credit scores and increases costs for those with higher credit scores (in many cases, anyway). But people are confusing the CHANGE for the ACTUAL cost.
So a low credit borrower isn't paying less than a high credit borrower? The gap between what they pay is just smaller than it was?
YES! Again, all value judgements and political commentary aside, the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores, but there's no scenario where someone with lower credit will have a lower fee. In other words, don't go skipping those credit card payments in the hopes of getting a lower rate.
How about some color-coded charts/tables?
I thought you'd never ask. Let's start with the changes that have everyone so upset. The following tables shows the DIFFERENCES in LLPAs before and after the change. RED = rising costs. GREEN = falling costs.++
If you only saw this chart, you could be forgiven for thinking someone with a 640 credit score was paying less than someone with a 740, but again, these are just the changes.
Now let's look at a table with OUTRIGHT LLPAs for the same matrix of credit scores and loan-to-value ratios. This is the NEW structure, after the implementation of the change.
As you can now plainly see, if you have a score of 640, you'll be paying significantly more than if you had a 740. Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That's a difference of 1.375%, or just over $4000 on a $300k mortgage. This is almost HALF the previous difference, and that's certainly a big change.
Yes, it's a big change, so why is the government doing this to people with higher credit?!
Note in the first two tables that there is more of an improvement for the lower FICO rows on PURCHASES (i.e. home ownership vs refis).
Any other misconstrued news I need to know about?
Yes, actually. While not as viral as the LLPA stuff, there has been a fair amount of press on a new 40yr FHA mortgage. THERE IS NO NEW 40yr FHA LOAN! Lenders who collect payments on FHA loans have a new option to offer loan modifications with terms of 40 years to borrowers who are unable to pay their existing FHA loans.
Don't you usually talk about financial markets in these newsletters?
Indeed! But since we've taken a fair amount of space on more interesting stuff above, we can keep the market recap fairly short. Rates moved higher to start the week as economic data was strong on Monday morning. There were several other examples of reactions to economic data at home and abroad as the week continued, but all of them played out in a sideways range that continues to wait on the first two weeks of May for the most relevant input.
Lol. Figured. Thank you for that article. Very informative.
I saw people on twitter saying this will encourage people to tank their credit scores in order to get better rates and that that is an example of socialism. Just complete utter lies.
I saw people on twitter saying this will encourage people to tank their credit scores in order to get better rates and that that is an example of socialism. Just complete utter lies.
Are you sure it wasn’t the tour rumour thread? Were they gutted as well, if it wasn’t?
I saw people on twitter saying this will encourage people to tank their credit scores in order to get better rates and that that is an example of socialism. Just complete utter lies.
I would encourage them to do that and take advantage of the system.
Well yes, it's subsidized, by definition since it's a gov't entity. But I think this paragraph is key:
The administration’s rate reduction on mortgage insurance premiums is possible because FHA’s mortgage insurance fund has accumulated reserves at a level that is more than five times the required threshold set by Congress, according to the White House.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
I read that and is why I asked the questions I did. It doesn't answer them. A 40y loan was never a question I had.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
I read that and is why I asked the questions I did. It doesn't answer them. A 40y loan was never a question I had.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
Huh? My initial article was about loan level pricing adjustments administered by Fannie Mae and Freddie Mac. Then you asked if that was only for FHA....
The article you posted was about something completely different and unrelated to what I was talking about.
To clear up: there are three relatively new things that came out in the mortgage industry recently.
1. A 40 year modification program administered by FHA...which Fox lied and implied was about new mortgage programs.
2. Fannie and Freddie LLPA's that allow folks with lower credit scores to not get as hammered in pricing as they were previously...but still are not getting rates anywhere close to those with good credit scores. Fox lied about this too and suggested people with lower credit were being rewarded with lower rates than people with higher credit scores.
3. FHA lowered their mortgage insurance premium--that is what your article talked about.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
I read that and is why I asked the questions I did. It doesn't answer them. A 40y loan was never a question I had.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
Huh? My initial article was about loan level pricing adjustments administered by Fannie Mae and Freddie Mac. Then you asked if that was only for FHA....
The article you posted was about something completely different and unrelated to what I was talking about.
To clear up: there are three relatively new things that came out in the mortgage industry recently.
1. A 40 year modification program administered by FHA...which Fox lied and implied was about new mortgage programs.
2. Fannie and Freddie LLPA's that allow folks with lower credit scores to not get as hammered in pricing as they were previously...but still are not getting rates anywhere close to those with good credit scores. Fox lied about this too and suggested people with lower credit were being rewarded with lower rates than people with higher credit scores.
3. FHA lowered their mortgage insurance premium--that is what your article talked about.
Reading both articles 2&3 seem to do the same thing. Lower scores will be helped out with the loans. That is where I am not understanding. They both are helping lower incomes yet are two separate entities.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
I read that and is why I asked the questions I did. It doesn't answer them. A 40y loan was never a question I had.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
Huh? My initial article was about loan level pricing adjustments administered by Fannie Mae and Freddie Mac. Then you asked if that was only for FHA....
The article you posted was about something completely different and unrelated to what I was talking about.
To clear up: there are three relatively new things that came out in the mortgage industry recently.
1. A 40 year modification program administered by FHA...which Fox lied and implied was about new mortgage programs.
2. Fannie and Freddie LLPA's that allow folks with lower credit scores to not get as hammered in pricing as they were previously...but still are not getting rates anywhere close to those with good credit scores. Fox lied about this too and suggested people with lower credit were being rewarded with lower rates than people with higher credit scores.
3. FHA lowered their mortgage insurance premium--that is what your article talked about.
Reading both articles 2&3 seem to do the same thing. Lower scores will be helped out with the loans. That is where I am not understanding. They both are helping lower incomes yet are two separate entities.
right, but generally speaking, Fannie/Freddie loans are conventional and not backed by the gov't. FHA are gov't backed.
^ You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
I read that and is why I asked the questions I did. It doesn't answer them. A 40y loan was never a question I had.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
Huh? My initial article was about loan level pricing adjustments administered by Fannie Mae and Freddie Mac. Then you asked if that was only for FHA....
The article you posted was about something completely different and unrelated to what I was talking about.
To clear up: there are three relatively new things that came out in the mortgage industry recently.
1. A 40 year modification program administered by FHA...which Fox lied and implied was about new mortgage programs.
2. Fannie and Freddie LLPA's that allow folks with lower credit scores to not get as hammered in pricing as they were previously...but still are not getting rates anywhere close to those with good credit scores. Fox lied about this too and suggested people with lower credit were being rewarded with lower rates than people with higher credit scores.
3. FHA lowered their mortgage insurance premium--that is what your article talked about.
Reading both articles 2&3 seem to do the same thing. Lower scores will be helped out with the loans. That is where I am not understanding. They both are helping lower incomes yet are two separate entities.
No not really.
LLPA's are pricing adjustments based on credit score, loan to value ratio and some times debt to income ratios. So easing those will help folks who's situation is not ideal not get quite as hammed as before. It is for FANNIE MAE and FREDDIE MAC only.
#3 pertains to mortgage insurance on FHA LOANS only. You do not go with Fha specifically because you have low income or because you have lower credit scores. You could make 500k a year and have perfect credit and choose to go FHA because you only want or are only able to put 3.5% down when you purchase a home. Likewise, someone with great credit and great income might go FHA on a cash out refinance if they are borrowing the maximum amount (80% of home's value) because they'll likely end up with a lower rate and payment as opposed to going to conventional.
So on the surface they might sound like they do the same thing but they are completely different.
Lawsuit: Yellen should ignore 'unconstitutional' debt limit
By CHRISTOPHER RUGABER and FATIMA HUSSEIN
Today
WASHINGTON (AP) — A union of government employees on Monday sued Treasury Secretary Janet Yellen and President Joe Biden to try to stop them from complying with the law that limits the government's total debt, which the lawsuit contends is unconstitutional.
The lawsuit comes just weeks before the government could default on the federal debt if Congress fails to raise the borrowing limit. Financial markets have become increasingly nervous about the potential for default, with economists warning that a failure to raise the debt limit could trigger a global financial crisis.
On Tuesday, Biden will meet with the top Republicans and Democrats in Congress to seek a potential breakthrough. The two sides remain far apart. Republicans have demanded steep spending cuts as the price of agreeing to raise the debt limit. Biden has argued that the debt ceiling, which applies to borrowing the government has already done, shouldn't be used as leverage in budget talks.
The lawsuit, filed by the National Association of Government Employees, says that if Yellen abides by the debt limit once it becomes binding, possibly next month, she would have to choose which federal obligations to actually pay. Some analysts have argued that the government could prioritize interest payments on Treasury securities. That would ensure that the United States wouldn't default on its securities, which have long been regarded as the safest investments in the world and are vital to global financial transactions.
But under the Constitution, the lawsuit argues, the president and Treasury secretary have no authority to decide which payments to make because the Constitution grants spending power to Congress. Doing so, it contends, would violate the Constitution’s separation of powers.
“Nothing in the Constitution or any judicial decision interpreting the Constitution," the lawsuit states, “allows Congress to leave unchecked discretion to the President to exercise the spending power vested in the legislative branch by canceling, suspending, or refusing to carry out spending already approved by Congress.”
White House and Treasury Department spokespeople declined to comment on the lawsuit Monday.
The NAGE represents about 75,000 government employees who it says are at risk of being laid off or losing pay and benefits should Congress fail to raise the debt ceiling. The debt limit, currently $31.4 trillion, was reached in January. But Yellen has since used various accounting measures to avoid breaching it.
Last week, Yellen warned that the debt limit would become binding as early as June 1, much earlier than many analyses had previously predicted, because tax receipts have come in lower than projected.
Laurence Tribe, a law professor at Harvard University, suggested that “it is possible that the Treasury Department would welcome the suit” because it expresses the view that “the ceiling is not a permissible bargaining tool for Congress to employ because it simply threatens to destroy the economy and hold the president hostage.”
Tribe has written a column in the New York Times expressing support for the idea that the debt ceiling is unconstitutional. White House aides have explored the notion of having the president invoke the 14th Amendment to the Constitution, which says the “validity” of the public debt “shall not be questioned.”
How fast the lawsuit may advance through the legal system depends, in part, on the judge, Tribe noted. ”It could move extremely quickly," he said. "It’s quite hard to predict.”
Richard Stearns, a federal judge who was nominated by President Bill Clinton, has been assigned to the case.
Norm Eisen, a senior fellow in governance studies at the Brookings Institution, suggested that it may be “up to the Supreme Court to determine whether there is a constitutional option to resolve this hostage crisis.”
“If Congress is going to demonstrate this propensity for hostage taking,” Eisen said, then “a reallocation of authority in this dimension away from Congress” may be called for.
On Sunday, Yellen said there were “no good options” for the United States to avoid an economic “calamity” if the debt ceiling isn't raised. Economists say the standoff has distorted financial markets. Since Yellen warned a week ago that the government could default on its debt as early as June 1, interest rates on one-month Treasury bills have been shooting higher. They reached 5.35% Monday, up from 4.12% a week earlier — an unusually sharp move.
That suggested that investors were shunning the one-month bills out of concern that they could suffer from a default. The one-month yield, in an unusual move, now exceeds the rates on all longer-dated Treasuries, including 10-year notes, which yield 3.49%. Typically, borrowers demand higher rates to lock up their money for longer periods. Rates on the 10-year have fallen because investors expect a recession later this year that would force the Federal Reserve to cut its benchmark rate.
“Markets are beginning to aggressively price in a potential default,” said Joe Brusuelas, chief economist at tax advisory firm RSM. “The timing of an economic and financial crisis caused by the political authority could not be any worse.”
In the wake of three large bank failures in the past two months, Brusuelas, like many economists, thinks many banks are pulling back on lending to bolster their finances, a trend that could weaken the economy.
“A partial or full default would exacerbate those trends and result in a pullback in spending and investment by households and firms, as well as an increase in unemployment,” Brusuelas said. “It would almost surely tip the economy into a full-blown recession.”
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
By Paul Wiseman
Yesterday
WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.
The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.
Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.
The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.
Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.
Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.
It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’
The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.
But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.
The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.
Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.
Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)
Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.
Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.
The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.
But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.
In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.
At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.
The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.
Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.
“The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’
Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.
___
AP Retail Writer Anne D'Innocenzio contributed to this report from New York.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
By Paul Wiseman
Yesterday
WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.
The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.
Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.
The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.
Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.
Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.
It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’
The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.
But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.
The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.
Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.
Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)
Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.
Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.
The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.
But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.
In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.
At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.
The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.
Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.
“The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’
Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.
___
AP Retail Writer Anne D'Innocenzio contributed to this report from New York.
THE STUDENT LOAN RELIEF ONE GETS ME. So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
Retailers, beware: Resumption of student loan payments could lead some buyers to pull back
By Paul Wiseman
Yesterday
WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.
The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.
Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.
The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.
Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.
Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.
It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’
The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.
But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.
The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.
Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.
Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)
Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.
Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.
The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.
But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.
In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.
At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.
The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.
Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.
“The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’
Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.
___
AP Retail Writer Anne D'Innocenzio contributed to this report from New York.
THE STUDENT LOAN RELIEF ONE GETS ME. So… We bail out the billionaires but continue to handcuff the every day worker and not bail them out…
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https://www.mortgagenewsdaily.com/markets/mortgage-rates-04212023
Is There Really a New, Unfair Mortgage Tax on Those With High Credit?
Seemingly overnight, the internet is awash with news regarding a "new," unfair tax on mortgage borrowers with higher credit scores. Some have gone so far as to suggest that someone could intentionally lower their credit score in order to get a better deal.
Before you stop paying your bills in the hope of cashing in, let's separate fact from fiction. First and most importantly, you will absolutely NOT get a better deal on a mortgage rate if your credit score is lower, even if your nephew just texted you a screenshot of a news headline saying "620 FICO SCORE GETS A 1.75% FEE DISCOUNT" and "740 FICO SCORE PAYS 1% FEE."
So why would your nephew make such a claim?
This all has to do with changes to Loan Level Price Adjustments (LLPAs) imposed by Fannie Mae and Freddie Mac (the "agencies"), the two entities that guaranty a vast majority of new mortgages. LLPAs are based on loan features such as your credit score and the loan-to-value ratio among other things. They've been changed several times over the years and a fairly substantial change was announced in January of this year.
Wait... This news is from JANUARY?! Why are people talking about it now?
Yes, in fact, we already told you about it. People are confused because they don't understand how "delivery dates" work when it comes to Fannie and Freddie. Changes that impact fees and guidelines are almost always implemented based on the date the loan in question is "delivered" to Fannie/Freddie. "Delivery," in this context, typically occurs a matter of weeks AFTER the loan is closed, although it can be more than a month.
Now consider that a closed loan has often been quoted and locked for more than 3 weeks--call it a month to be safe. Since these changes go into effect on loans delivered on or after May 1st, 2023, lenders began to implement them weeks ago. Many lenders implemented them months ago--especially for loans that are locked for longer periods of time.
So low credit borrowers are already getting a discount while high credit borrowers pay more?
Not exactly, and this is where the confusion comes in. Also, from here on out, please note that there is no opinion offered here as to whether this is good/bad/etc. The only goal is to clear up confusion and offer facts.
The fact of matter is that LLPAs are indeed changing in a way that improves costs for those with lower credit scores and increases costs for those with higher credit scores (in many cases, anyway). But people are confusing the CHANGE for the ACTUAL cost.
So a low credit borrower isn't paying less than a high credit borrower? The gap between what they pay is just smaller than it was?
YES! Again, all value judgements and political commentary aside, the change amounts to a tweak of an existing fee structure in favor of those with lower credit scores and at the expense of those with higher credit scores, but there's no scenario where someone with lower credit will have a lower fee. In other words, don't go skipping those credit card payments in the hopes of getting a lower rate.
How about some color-coded charts/tables?
I thought you'd never ask. Let's start with the changes that have everyone so upset. The following tables shows the DIFFERENCES in LLPAs before and after the change. RED = rising costs. GREEN = falling costs.++
If you only saw this chart, you could be forgiven for thinking someone with a 640 credit score was paying less than someone with a 740, but again, these are just the changes.
Now let's look at a table with OUTRIGHT LLPAs for the same matrix of credit scores and loan-to-value ratios. This is the NEW structure, after the implementation of the change.
As you can now plainly see, if you have a score of 640, you'll be paying significantly more than if you had a 740. Using an 80% loan-to-value ratio as an example, your LLPA at 640 is 2.25% versus 0.875% for a 740 score. That's a difference of 1.375%, or just over $4000 on a $300k mortgage. This is almost HALF the previous difference, and that's certainly a big change.
Yes, it's a big change, so why is the government doing this to people with higher credit?!
Fannie and Freddie technically have a "mission" to promote affordable home ownership. Here is the statement on the topic by their regulator, the FHFA: FHFA Announces Updates to the Enterprises’ Single-Family Pricing Framework.
Note in the first two tables that there is more of an improvement for the lower FICO rows on PURCHASES (i.e. home ownership vs refis).
Any other misconstrued news I need to know about?
Yes, actually. While not as viral as the LLPA stuff, there has been a fair amount of press on a new 40yr FHA mortgage. THERE IS NO NEW 40yr FHA LOAN! Lenders who collect payments on FHA loans have a new option to offer loan modifications with terms of 40 years to borrowers who are unable to pay their existing FHA loans.
Don't you usually talk about financial markets in these newsletters?
Indeed! But since we've taken a fair amount of space on more interesting stuff above, we can keep the market recap fairly short. Rates moved higher to start the week as economic data was strong on Monday morning. There were several other examples of reactions to economic data at home and abroad as the week continued, but all of them played out in a sideways range that continues to wait on the first two weeks of May for the most relevant input.
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The pricing adjustments are Fannie and Freddie products.
So is this across the whole board, nobody actually knows still or only FHA backed homes?
Or lastly is it helping only FHA backed loans and evrybody else helps subsidize it?
https://www.cnn.com/2023/02/22/homes/biden-housing-fha-insurance/index.html
The administration’s rate reduction on mortgage insurance premiums is possible because FHA’s mortgage insurance fund has accumulated reserves at a level that is more than five times the required threshold set by Congress, according to the White House.
You guys are talking about mortgage insurance on FHA loans. That is a different issue than the llpa's and 40 year terms that Fox lied about. Mortgage insurance premiums decreasing is something everyone can agree is a good thing.
Tempo--read my article above. It explains everything.
The article by CNN stated that the only changes would be by FHA backed homes. Your article says Freddie and Fannie backed homes are effected.
So my ask is is it across the board the mortgage changes, Fred and Fan or just FHA or something else?
I'm reading all these articles and not getting the exact info I need as I don't study the housing mortgages this in depth.
My initial article was about loan level pricing adjustments administered by Fannie Mae and Freddie Mac. Then you asked if that was only for FHA....
The article you posted was about something completely different and unrelated to what I was talking about.
To clear up: there are three relatively new things that came out in the mortgage industry recently.
1. A 40 year modification program administered by FHA...which Fox lied and implied was about new mortgage programs.
2. Fannie and Freddie LLPA's that allow folks with lower credit scores to not get as hammered in pricing as they were previously...but still are not getting rates anywhere close to those with good credit scores. Fox lied about this too and suggested people with lower credit were being rewarded with lower rates than people with higher credit scores.
3. FHA lowered their mortgage insurance premium--that is what your article talked about.
LLPA's are pricing adjustments based on credit score, loan to value ratio and some times debt to income ratios. So easing those will help folks who's situation is not ideal not get quite as hammed as before. It is for FANNIE MAE and FREDDIE MAC only.
#3 pertains to mortgage insurance on FHA LOANS only. You do not go with Fha specifically because you have low income or because you have lower credit scores. You could make 500k a year and have perfect credit and choose to go FHA because you only want or are only able to put 3.5% down when you purchase a home. Likewise, someone with great credit and great income might go FHA on a cash out refinance if they are borrowing the maximum amount (80% of home's value) because they'll likely end up with a lower rate and payment as opposed to going to conventional.
So on the surface they might sound like they do the same thing but they are completely different.
WASHINGTON (AP) — A union of government employees on Monday sued Treasury Secretary Janet Yellen and President Joe Biden to try to stop them from complying with the law that limits the government's total debt, which the lawsuit contends is unconstitutional.
The lawsuit comes just weeks before the government could default on the federal debt if Congress fails to raise the borrowing limit. Financial markets have become increasingly nervous about the potential for default, with economists warning that a failure to raise the debt limit could trigger a global financial crisis.
On Tuesday, Biden will meet with the top Republicans and Democrats in Congress to seek a potential breakthrough. The two sides remain far apart. Republicans have demanded steep spending cuts as the price of agreeing to raise the debt limit. Biden has argued that the debt ceiling, which applies to borrowing the government has already done, shouldn't be used as leverage in budget talks.
The lawsuit, filed by the National Association of Government Employees, says that if Yellen abides by the debt limit once it becomes binding, possibly next month, she would have to choose which federal obligations to actually pay. Some analysts have argued that the government could prioritize interest payments on Treasury securities. That would ensure that the United States wouldn't default on its securities, which have long been regarded as the safest investments in the world and are vital to global financial transactions.
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But under the Constitution, the lawsuit argues, the president and Treasury secretary have no authority to decide which payments to make because the Constitution grants spending power to Congress. Doing so, it contends, would violate the Constitution’s separation of powers.
“Nothing in the Constitution or any judicial decision interpreting the Constitution," the lawsuit states, “allows Congress to leave unchecked discretion to the President to exercise the spending power vested in the legislative branch by canceling, suspending, or refusing to carry out spending already approved by Congress.”
White House and Treasury Department spokespeople declined to comment on the lawsuit Monday.
The NAGE represents about 75,000 government employees who it says are at risk of being laid off or losing pay and benefits should Congress fail to raise the debt ceiling. The debt limit, currently $31.4 trillion, was reached in January. But Yellen has since used various accounting measures to avoid breaching it.
Last week, Yellen warned that the debt limit would become binding as early as June 1, much earlier than many analyses had previously predicted, because tax receipts have come in lower than projected.
Laurence Tribe, a law professor at Harvard University, suggested that “it is possible that the Treasury Department would welcome the suit” because it expresses the view that “the ceiling is not a permissible bargaining tool for Congress to employ because it simply threatens to destroy the economy and hold the president hostage.”
Tribe has written a column in the New York Times expressing support for the idea that the debt ceiling is unconstitutional. White House aides have explored the notion of having the president invoke the 14th Amendment to the Constitution, which says the “validity” of the public debt “shall not be questioned.”
How fast the lawsuit may advance through the legal system depends, in part, on the judge, Tribe noted. ”It could move extremely quickly," he said. "It’s quite hard to predict.”
Richard Stearns, a federal judge who was nominated by President Bill Clinton, has been assigned to the case.
Norm Eisen, a senior fellow in governance studies at the Brookings Institution, suggested that it may be “up to the Supreme Court to determine whether there is a constitutional option to resolve this hostage crisis.”
“If Congress is going to demonstrate this propensity for hostage taking,” Eisen said, then “a reallocation of authority in this dimension away from Congress” may be called for.
On Sunday, Yellen said there were “no good options” for the United States to avoid an economic “calamity” if the debt ceiling isn't raised. Economists say the standoff has distorted financial markets. Since Yellen warned a week ago that the government could default on its debt as early as June 1, interest rates on one-month Treasury bills have been shooting higher. They reached 5.35% Monday, up from 4.12% a week earlier — an unusually sharp move.
That suggested that investors were shunning the one-month bills out of concern that they could suffer from a default. The one-month yield, in an unusual move, now exceeds the rates on all longer-dated Treasuries, including 10-year notes, which yield 3.49%. Typically, borrowers demand higher rates to lock up their money for longer periods. Rates on the 10-year have fallen because investors expect a recession later this year that would force the Federal Reserve to cut its benchmark rate.
“Markets are beginning to aggressively price in a potential default,” said Joe Brusuelas, chief economist at tax advisory firm RSM. “The timing of an economic and financial crisis caused by the political authority could not be any worse.”
In the wake of three large bank failures in the past two months, Brusuelas, like many economists, thinks many banks are pulling back on lending to bolster their finances, a trend that could weaken the economy.
“A partial or full default would exacerbate those trends and result in a pullback in spending and investment by households and firms, as well as an increase in unemployment,” Brusuelas said. “It would almost surely tip the economy into a full-blown recession.”
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Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
WASHINGTON (AP) — The reprieve is over. Just as the American economy is struggling with high inflation and interest rates, the coming resumption of student loan payments poses yet another potential challenge.
The suspension of federal student loan payments, which took effect at the height of the pandemic in 2020, expires late this summer. Interest will start accruing again in September. Payments will resume in October.
Though many hoped their loans might at least be lightened, the Supreme Court last week struck down a Biden administration plan that would have given millions of people some relief from the return of the loan payments. The Biden plan would have canceled up to $20,000 in federal student loans for 43 million borrowers; 20 million would have had their loans erased entirely. The court ruled that the plan exceeded the government’s authority.
The restart of those payments will force many people to start paying hundreds of dollars in loans each month — money they had been spending elsewhere for the past three years. Their pullback in spending on goods and services won't likely make a serious dent in the $26 trillion U.S. economy, the world's largest. Any pain instead will likely be concentrated in a few industries, notably e-commerce companies, bars and restaurants and some major retailers.
INFLATION
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Even if all that won't be enough to weaken overall economic growth, the shift in spending by many young adults could inject further uncertainty into an economy already beset by uncertainties, from whether the Fed will manage to tame inflation and halt its interest rate hikes to whether a recession is destined to strike by next year, as many economists still fear.
Josh Bivens, chief economist at the Economic Policy Institute think tank, suggested that the likely hit to the economy might amount to perhaps one-third of a percentage point of gross domestic product — the nation's total output of goods and services — or about $85 billion or $90 billion a year.
It's “not trivial, but it’s not huge,’’ Bivens said. “At the macro level, my guess is that it won’t be a game-changer.’’
The continued willingness of consumers to spend has kept the economy humming despite more than a year of dramatically rising interest rates. Consumers have had the financial wherewithal to load up Amazon shopping carts, go out for dinner and buy everything from lawn furniture to new refrigerators, in part because the government spent around $5 trillion since 2020 to cushion the economic damage from COVID-19.
But those pandemic relief programs, including the student loan moratorium, are ending and adding to the obstacles the economy is facing.
The suspension of loan payments “had given people a bit more money in the pocket, and they’ve gone out and they’ve spent that money,’’ said Neil Saunders, managing director of the GlobalData Retail consultancy.
Deutsche Bank analysts who follow the retail industry estimate that the resumption of the loan payments could shrink consumer spending by $14 billion a month, or an average of $305 per borrower. The biggest blow, they say, will likely be absorbed by online commerce and mail-order companies and by restaurants and bars.
Among the individual companies that could be hurt, according to the Deutsche Bank analysis, are Macy’s, Target and Kohl’s. The largest retailer, Walmart, is thought to be insulated from major damage because of its grocery business. (Walmart is also the nation's largest grocer.)
Dollar stores and other discounters might even benefit if more financially squeezed consumers turn to bargain-hunting.
Jan Hatzius, chief economist at Goldman Sachs, and his colleagues say they expect the end of the student loan moratorium to impose a “modest drag’’ on the economy, shaving 0.2% off growth in consumer spending this year. The dent to spending would have been half as much, they say, if the Supreme Court had allowed the Biden debt forgiveness program to proceed.
The economy has endured a wild ride since COVID-19 hit in early 2020. A deep recession engulfed the economy in March and April that year. Massive government aid fueled a rebound of surprising speed, strength and resilience.
But it came at a price: Surging demand from consumers overwhelmed the world’s factories, ports and freight yards, resulting in delays, shortages — and much higher prices. Inflation surged last year to heights not seen since the early 1980s.
In response, the Fed began jacking up its benchmark short-term rate in March 2022. Since then, it’s raised its key rate 10 times. Higher borrowing costs have had the intended effect of slowing the economy and price acceleration. From a year-over-year peak of 9.1% in June 2022, consumer price inflation fell to 4% in May. Yet that’s still twice the Fed’s 2% target. So the central bank has signaled that more rate hike are likely this year.
At the same time, the government has been phasing out pandemic relief. Extended unemployment aid ended in September 2021. An expansion of the food stamps program ended this year.
The savings that Americans had socked away beginning at the peak of the pandemic — when they were receiving government relief checks and saving money while hunkered down at home — are evaporating. Fed researchers have reported that any “excess’’ pandemic savings probably dried up in the first three months of 2023.
Despite everything, the economy has proved surprisingly durable. The government last week sharply upgraded its estimate of January-through-March economic growth to a 2% annual rate and said consumers were spending at their fastest pace in nearly two years. Factor in a still-robust job market — employers keep hiring briskly, and unemployment, at 3.7%, is barely above a half-century low — and the economy has repeatedly outrun predictions, first sounded more than a year ago, that a recession was inevitable.
“The economy has really powered through it,’’ Bivens said. “So what is the straw that breaks the camel’s back? My guess is it’s not this. I don’t think it’s a big-enough thing.’’
Still, Bivens said, he worries about the Fed rate hikes and federal cutbacks, including the end of the student loan payment moratorium, “throwing more contractionary shocks’’ at an American economy that has defied the doubters — at least for now.
___
AP Retail Writer Anne D'Innocenzio contributed to this report from New York.
Not today Sir, Probably not tomorrow.............................................. bayfront arena st. pete '94
you're finally here and I'm a mess................................................... nationwide arena columbus '10
memories like fingerprints are slowly raising.................................... first niagara center buffalo '13
another man ..... moved by sleight of hand...................................... joe louis arena detroit '14
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