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  • Writer's pictureCourtney Graham

Can you write a One Billion Dollar check?

By Josh Teti, Princeton Mortgage Wholesale

In our industry, it’s normal rhetoric to hear phrases like “a $400,000 loan amount”, or “our goal is to fund $350 million this month”, but you don’t normally hear this one… one BILLION dollars. Now that’s a number that grabs a lot of attention. And typically, that would be a number that Timothy Sloan, Wells Fargo President and CEO, would write on a white-board during projected sales meetings. However, that dollar amount just had a much bigger effect on Timothy and his company, and not in a good way…

The CFPB just announced today that because Wells Fargo violated specific areas of the Consumer Financial Protection Act (more specifically to our industry, how they charged borrowers for interest rate lock extensions), they have to pay up. And what’s the cost of that violation? You guessed it….ONE HUNDRED BILLION DOLLARS!!!! Just kidding, I wanted to do my Dr. Evil impersonation from Austin Powers and if you don’t know what I’m talking about, watch this. Regardless of how much the fine is, what’s the bigger picture here? Well here’s what I see… if you’re not following the strict lending laws, rules, and regulations set forth by bureaus like the CFPB, and if you don’t have specific internal policies to make sure you’re in compliance 100% of the time, you could be the next billion-dollar victim. It seems pretty obvious right? Do the right thing, don’t take any shortcuts, don’t do anything illegal, and you’ll be good. But why is it that almost every week, we hear stories this this?

My opinion – it’s a fierce, competitive market and an even more competitive time in our industry. Interest rates are rising, loan profits & margins are down, credit feels tight across the board, and refinances are dipping (pretty hard too, down +5% since February). Some companies are toughing it out while others try to find “creative” ways to stay in the game. But there is good news for us mortgage industry players who want to do it the right way. We’re entering the heavy purchase market, companies are exiting the mortgage space which means there’s market share available, and the overall perception of homeownership as a good investment is on the rise. Stay competitive, stay legal, and you could start to hear the phrase “one billion dollars” in a positive context.



The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.

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