At first glance, it’s sounds like good news. Chase, one of the nation’s largest mortgage lenders, plans to hire hundreds of workers in Texas, per the Star-Telegram.
But wait, why are they hiring? “To keep people in their homes.” Not to get people into a new home or help them refinance their existing mortgage, but to help them avoid foreclosure.
Or perhaps to do some math and decide that foreclosing actually is the best alternative.
That’s what is disconcerting – the Chase spokesman who revealed the hiring noted that “many” of the positions are for mortgage loan servicing, not loan origination.
Does that explain why Chase was pricing itself out of the market last week, with mortgage rates a point higher than their competitors? It could, and not only that, it may signal more bad news to come.
You have to wonder why after five or so years a large bank and mortgage lender like Chase is hiring hundreds of loss mitigation employees, as if they didn’t realize the scope of the problem earlier.
Even to an outsider, it would be obvious that more employees would be needed in loan servicing to deal with the scores of foreclosures and real estate short sales taking place throughout the country.
Or maybe things are even worse than we can imagine, and even after ramping up their loss mit team over the past couple years, it’s simply not enough.
Chase’s Mortgage Hiring Focused on Clean-Up
Either way, it’s a bad sign for the housing market, if hiring is focusing more on “clean-up” as opposed to straight-up lending.
Kind of explains why the average borrower in foreclosure hasn’t made a mortgage payment for a record 599 days, per LPS data released today.
And of the nearly two million loans that are 90+ days delinquent (but not yet in foreclosure), 42 percent haven’t made a payment in more than a year. Talk about a lot of free rent.
Obviously, this type of data also uncovers the foreclosure backlog and shadow inventory we’re dealing with that doesn’t seem to be getting any better.
And it’s really hard to tell if things are actually improving or simply not being dealt with, given all the delays.
But I suppose the silver lining here might be that all the new hiring will finally get to the core of the problem. That is, the overhang of distressed properties (and borrowers) that have yet to be sorted out.
Until they are, we really won’t know where we stand, and certainly won’t be able to move forward.