[David] Mr. Kittle, let’s get you back on here and chat about what you’re seeing. I’m seeing continued pipelines growth. We’ll have those hiccups in the markets, but I’m still seeing continued pipeline growth. Any words of encouragement you have for those that are running production or listening to this that are in the production ranks?
[Kittle] It’s along the lines of what you said, David. Everybody that I still talk to most of them inside TMC pipelines aren’t bulging over, but it’s consistent production. Been consistent,
[David] Yeah. And it’s good. Well- It’s purchase business. That means some, even at these higher rates.
[Kittle] There is no refi business, so it’s all purchase. No. And that’s what you have to work towards, that’s where your mindset is. And I would, in the days of even higher interest rates than this, you can always throw that out there, whether it’s really, legit or not. But it’s legit, but whether you should really say it, you tell these people, ” Get the house now, it’s gonna go up in value.” They just did a major reassessment here in Louisville. I get my reassessed house value and I’m going like, “Good grief, my property taxes are gonna explode next year.” So values are still going up, right? And you can always refinance if rates fall. So always go ahead and purchase. And- Yeah.
[David] In addition, Bill, you’re, in addition to being a consultant out there to the industry, you also work with a bank, and you’re advising a bank, pretty much running their division. Are you seeing the same with the banks’ pipelines?
[Bill] To some extent, yes. It’s probably trailing the industry a little bit right now. But yeah that, I agree with everything Mr. Kittle said.
[Kittle] And to Bill’s point there, just for a second there, banks, even though they do mortgages that’s not their main focus, right? They do so many other things, where if you’re an IMB that’s all you’re doing. Yeah. So the difference in volumes are because of that fact
[David] Yeah. What’s really interesting is some of the interest of banks and credit unions lately on being a buyer of product. ‘Cause they know they, probably not as efficient of an originator as an IMB. So origination efficiency is lands to the IMBs. Money is found at the banks and credit unions. They’re more and more are saying, ” Hey, come talk to us. We may be willing to buy some of this product and hold it.” So that’s what I was wondering every second. I wonder,
[David] I don’t know what the rate is right now, and I should because I before we got on here today. But if I’m originating today, I am certainly talking to people to make sure that they know there’s, they can get a five and one ARM out there, which can get them in for the first five years at a, maybe a half to 5/8, 3/4% lower than a current fixed rate. That’s a lot of money. Especially when it’s..,
[David] Yeah, MBA, the MBA is reporting 6.65, 6.65 on the rate, and the Mortgage News Daily is saying the 30-year fixed rate is at 660. So that’s some of the recent surveys. Now, how lagging is that from the spike that we’ve seen today? Although, so anyway, that’s the range we’re in, is in the upper 600. 3.1, 5.1,
[Kittle] Whatever you can get, if you want to get in a house and do that. Yeah. And one thing I’ll go ahead and since I’ve got the microphone here just for a second to put it in, we’re talking about affordability, and this is real numbers, right? My wife, Gail, just closed on her home two weeks ago in California. Her next year’s homeowner’s insurance, and she stayed, $23,400 for one year. I can show you the bill. And that’s in California. It’s in Los Angeles County, right? Oh. In Agoura Hills. On top of that, $3,000 for earthquake insurance. You’re talking $26,000 to insure your house, and she’s never had a claim. Anyway, so and you wanna talk about affordability, it’s not j- it’s not the interest rates, right? It’s everything to the property taxes.
[David] Yeah. Really good point. It’s a good reminder. Yeah. Yeah. Or maybe n-
[Alice] My sister-in-law just found the same thing, David. She lives out in California, sister, in Simi Valley, and y- it’s a choice to go, “How much of a repair will I have, my likelihood of a claim? Should I just not get the homeowner’s insurance?” It’s a real financial burden.
[David] It’s not a choice for anyone who has a mortgage because they’re required to do that. And if they don’t, then they have the forced place insurance, and you think the 23,000 is expensive, wait till you see the forced placement bill. Can be at least a third again half again as higher than what is the regular. Sometimes almost double.
[Kittle] Yeah, that’s basically the same place Gail was in Agoura Hills. It’s 20, Simi Valley’s 20 minutes, from Calabasas, Agoura Hills, Westlake, Simi, all the same place. It’s crazy. It’s ridiculous. Yeah.
[Bill] Sorry. And the other thing on top of that, and mentioned it, but taxes have been going up. Here in, in Richmond, property values … So the good news is property values are up 40%, let’s say, in the last three years. But the City of Richmond has done a great job of spending all that money in each of those years, right? The tax rate didn’t go down at all. So it’s not even some people are complaining that their taxes went up more than others. They just, they took all the extra money and spent it. So if you’ve got a fixed rate mortgage, you’ve looked at your insurance costs going up, your taxes have gone up dramatically, and you know- Yeah, it feels like you’re all of a sudden that that fixed rate and fixed payment are biting back.
[David] Yeah. It feels like you’re on adjustable rate mortgage and the adjustments are going really negative against you when you have that kind of stuff, and yet they’re on a fixed rate mortgage. Interesting times. Interesting times.
David G. Kittle, CMB is a highly respected leader in the mortgage industry, with over 45 years of experience. He is the Co-Founder and Chairman of The Mortgage Collaborative (TMC), a mortgage lending cooperative providing members with access to resources and tools to improve their business operations.
Kittle began his mortgage banking career with American Fletcher Mortgage Company as a top-producing loan officer in 1978 moving to the management side in 1986 with Southmark Mortgage. He opened Associates Mortgage Group, the first of his three lending companies in 1994.
Kittle served as MORPAC Chairman for MBA, from 2004-2006. He is past President of both the Louisville and Kentucky Mortgage Bankers Associations, as well as leading the industry through its most tumultuous period as Chairman of the Mortgage Bankers Association, Washington DC in 2009. Kittle has testified before congress 14 times.
Kittle has been a driving force behind the growth and success of TMC, working to bring together mortgage lenders from across the country to share best practices and collaborate on key industry issues. Kittle has also been a vocal advocate for innovation and technology adoption in the mortgage industry, urging lenders to embrace new tools and strategies to improve their operations and better serve their customers.
Kittle is a frequent speaker at industry events and conferences, sharing his expertise on a variety of topics related to mortgage lending.
He resides in Louisville, Kentucky, he has four children and two grandchildren.