Where is mortgage money going to come from?

David Goldsmith

All Powerful Moderator
Staff member

Mortgage demand drops as interest rates bounce higher​

Diana Olick
  • Total mortgage application volume fell 7.7% last week as mortgage rates jumped higher.
  • The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances increased to 6.39% last week from 6.18% the previous week.
  • Applications to refinance a home loan dropped 13% for the week and were 76% lower than the same week one year ago.

After falling for five straight weeks, mortgage rates jumped last week, triggering a decline in mortgage demand.
Total mortgage application volume fell 7.7% last week, compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.39% from 6.18%, with points rising to 0.70 from 0.64 (including the origination fee) for loans with a 20% down payment. The rate was 4.05% one year ago.
"Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time," said Joel Kan, MBA's vice president and deputy chief economist.
Applications to refinance a home loan dropped 13% for the week and were 76% lower than the same week one year ago. At the current rate, 100,000 fewer borrowers can benefit from a refinance compared with just one week ago, according to data from Black Knight. A year ago, with mortgage rates at 4.05%, there were just under 4 million refinance candidates.
Mortgage applications to purchase a home fell 6% for the week and were 43% lower than the same week a year ago. Real estate agents across the country are reporting a jump in buyer demand in the past few weeks, perhaps indicating an early start to the historically busy spring market.
"I actually thought, my God, this is amazing. Look at how fast it turned on a dime," said Dana Rice, a real estate agent with Compass, who was running a busy open house in Bethesda, Maryland, on Saturday. "We went from no showings and nobody coming to open houses, that every single thing that I've launched in the last couple of weeks has had multiple offers."
There is, however, an abnormally high level of all-cash buyers in the market. Peter Fang is one of them. He was at the open house.
"I'm very surprised to see so many cash offers in the market. I thought I would be at a much better position but the competition is still there," Fang said.
Mortgage rates continued to move up this week after a government report on inflation showed it was higher than expected in January.

David Goldsmith

All Powerful Moderator
Staff member

The Only Way Is Up​

Higher and Higher​

Bond traders are finally coming around to the realization that the only way is up for US interest rates.
But just how far will the Federal Reserve take them?
Fed presidents Loretta Mester and James Bullard last week signaled they may favor returning to 50-basis point rate hikes in the future.
On Wall Street, Deutsche Bank economists now expect a high point of 5.6%, above the 5.1% previously forecast and the current 4.5% to 4.75% range.
Among the reasons: A resilient labor market, easier financial conditions and elevated inflation.
One useful, albeit it sometimes faulty, economic model points to a need for even tighter credit.
As Torsten Slok of Apollo notes, the eponymous rule of Stanford University’s John Taylor currently points to a rate of 9% based on the current levels of inflation and unemployment.
“The bottom line is that the Taylor Rule framework normally used by the Fed for evaluating the stance of monetary policy is saying that the Fed is still significantly behind the curve,” Slok wrote in a report to clients.

Taylor Rule​

Source: Bloomberg

Earlier this month, Dominique Dwor-Frecaut, a senior market strategist at the research firm Macro Hive, said she already sees the Fed reaching 8%, in part because of the Taylor Rule.
According to Mohamed El-Erian, the chairman of Gramercy Funds and a Bloomberg Opinion columnist, the Fed may ultimately need to declare victory when inflation is north of its 2% target.
“You need a higher stable inflation rate. Call it 3 to 4%,” El-Erian told Bloomberg Television. “I don’t think they can get CPI to 2% without crushing the economy.”
Even so, the higher the Fed goes, the greater chance it will inflict a recession.
Deutsche still forecasts a downturn this year although it’s delayed the start date until the fourth quarter.


David Goldsmith

All Powerful Moderator
Staff member

US mortgage rates rise for the third week in a row​

By Anna Bahney, CNN
Updated 12:01 PM EST, Thu February 23, 2023
article video

Washington(CNN)Mortgage rates shot up for the third-straight week, as inflation concerns make rates more volatile.
The 30-year fixed-rate mortgage averaged 6.5% in the week ending February 23, up from 6.32% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 3.89%.
Rates had been trending downward after hitting 7.08% in November, but are now climbing again, up about half a percentage point in a month. A slew of robust economic data suggests the Federal Reserve is not done in its battle to cool the US economy and will likely continue hiking its benchmark lending rate.

"The economy continues to show strength, and interest rates are repricing to account for the stronger than expected growth, tight labor market and the threat of sticky inflation," said Sam Khater, Freddie Mac's chief economist.
The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit. Many buyers who put down less money upfront or have less than ideal credit will pay more than the average rate.

Inflation concerns remain​

The mortgage rate for a 30-year, fixed-rate loan continued to climb as the 10-year Treasury yield has surged. The 10-year yield this week reached its highest level since November.
The Fed does not set the interest rates that borrowers pay on mortgages directly, but its actions influence them. Mortgage rates tend to track the yield on 10-year US Treasury bonds, which move based on a combination of anticipation about the Fed's actions, what the Fed actually does and investors' reactions. When Treasury yields go up, so do mortgage rates; when they go down, mortgage rates tend to follow.
"On an ordinary day, strong retail sales data and a 53-year low unemployment rate would be a cause for celebration among investors and businesses," said Jiayi Xu, an economist at Realtor.com. "However, under current conditions, these robust data raise uncertainties in the markets."
On one hand, she said, the hotter-than-expected inflation might force the Fed to revisit faster interest rate growth, which is unwelcome news for both investors and businesses.
"On the other hand, some policymakers did not interpret January's data as signs of accelerating growth, choosing to wait for more information before deciding," she said. "As a result they are in favor of implementing smaller rate hikes in the coming months, which would be welcomed by markets."

Housing market will be 'nobody's'​

With rates moving back up and turning off buyers as the spring home buying season gets underway with hopeful sellers entering the market, the housing market will continue to be 'nobody's market' said Xu -- not friendly to buyers nor to sellers.
"Mortgage rates are likely to move in the 6% to 7% range over the next few weeks, which continues to pose a significant challenge to affordability," she said.
Existing-home sales have retreated for the 12th straight month, though at a slower pace. In addition, the West is the only region where home prices decreased year-over-year, suggesting reduced demand for housing.

"This decline may be due to a combination of multiple factors such as high housing prices, high mortgage rates, and the recent wave of tech layoffs on the West Coast," said Xu. "With more companies announcing their return-to-office mandates last week, some remote workers may choose to relocate back to major cities or tech hubs. As home prices are still high and mortgage rates are up compared to one year ago, people who move back may prefer to stay in the rental market, driving up the already high rental demand in these areas."
Khater said that Freddie Mac's research suggests that there is a wider range of rates borrowers lock in as average rates go up. All borrowers can benefit from shopping around for rates from different kinds of lenders including traditional banks, online lenders or credit unions.
"Homebuyers can potentially save $600 to $1,200 annually by taking the time to shop among lenders to find a better rate," said Khater.

David Goldsmith

All Powerful Moderator
Staff member
Mortgage demand from homebuyers drops to a 28-year low
Published Wed, Mar 1 2023 7:00 AM ESTUpdated 3 Hours Ago

Diana Olick
  • Mortgage demand fell for the third straight week as interest rates increased.
  • Mortgage applications to buy a home dropped 6% last week from the previous week.
  • Mortgage rates have moved half a percentage point higher in the past month.

Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up.
Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association's seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low.
This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.71% from 6.62%, with points rising to 0.77 from 0.75 (including the origination fee) for loans with a 20% down payment. That is the highest rate since November of last year.
Mortgage rates have moved 50 basis points higher in just the past month. Last February, rates were in the 4% range.
Homes in Rocklin, California, on Tuesday, Dec. 6, 2022.
David Paul Morris | Bloomberg | Getty Images
"Data on inflation, employment, and economic activity have signaled that inflation may not be cooling as quickly as anticipated, which continues to put upward pressure on rates," said Joel Kan, an MBA economist.
Applications to refinance a home loan fell 6% for the week and were 74% lower year over year.
"Refinance applications account for less than a third of all applications and remained more than 70% behind last year's pace, as a majority of homeowners are already locked into lower rates," added Kan.
Mortgage rates haven't done much to start this week, but the trajectory now appears to be higher, after a brief respite in January. Lower rates to start the year caused a brief surge in homebuying, but mortgage demand from homebuyers would seem to indicate a very slow spring is ahead.

David Goldsmith

All Powerful Moderator
Staff member
Last time mortgage rates topped 7% it crushed new buyer demand.

Mortgage Rates Now Back Above 7%​

By: Matthew Graham
58 Min, 1 Sec ago
Mortgage rates have been hit hard on two fronts over the past month. The first front is the obvious one: the bond market has moved in a way that forces rates to go higher. To be fair, it's almost always the bond market that forces rates to go wherever they're going.
A vast majority of the day-to-day movement in rates is a simple function of the trading levels in specific bonds. This has been and will continue to be the case, possibly forever. February (and now early March) economic data caused traders to worry about higher inflation and resilient economic growth. This makes traders want to sell bonds more than buy them, and that results in higher interest rates.
But bonds aren't always everything when it comes to rate movement. The "everything else" category changes in composition depending on the landscape. For instance, during the 2020-2021 refi booms, rates were often limited by mortgage lenders' capacity to handle new business. The bond market actually allowed for much lower rates at times, but lenders simply couldn't handle the volume.

There's a different problem in the "everything else" category right now. The regulator overseeing Fannie and Freddie recently changed some of the upfront fees required for all conforming mortgages (conforming = guaranteed by Fannie and Freddie). Depending on a borrower's credit score and the amount of a home's value they wish to borrow, their rate could instantly rise by 0.125% simply because a lender implemented the new fee requirements.
Without the impact of those fees, rates could still be in the high 6% range, or close to it. As it stands, the average lender is now back up into the low 7's for a well-qualified 30yr fixed scenario. These aren't the highest levels we've seen during this cycle, but they are the highest in more than 4 months (and not too far away from the long-term highs just under 7.4%).
Incidentally, Freddie Mac's rate survey came out today and it showed 30yr fixed rates at 6.65. Understand that most of Freddie's survey responses come in on Monday and rates have risen since then. The survey also includes upfront points and does not include the new fees that are hitting a vast majority of borrowers. If we were to adjust for the market movement that's happened since Monday, the upfront costs, and the fees, Freddie's number would likely be right in line with 7.1%.


David Goldsmith

All Powerful Moderator
Staff member

Fed Chair Powell says interest rates are 'likely to be higher' than previously anticipated​


Jeff Cox
  • Federal Reserve Chairman Jerome Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected.
  • "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," the central bank leader said in prepared remarks for appearances this week on Capitol Hill.
  • Powell said the current trend shows that the Fed's inflation-fighting job is not over.

Federal Reserve Chairman Jerome Powell on Tuesday cautioned that interest rates are likely to head higher than central bank policymakers had expected.
Citing data earlier this year showing that inflation has reversed the deceleration it showed in late 2022, the central bank leader warned of tighter monetary policy ahead to slow a growing economy.

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated," Powell said in remarks prepared for two appearances this week on Capitol Hill. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes."
Those remarks carry two implications: One, that the peak, or terminal, level of the federal funds rate is likely to be higher than the previous indication from the Fed officials, and, two, that the switch last month to a smaller quarter-percentage point increase could be short-lived if inflation data continues to run hot.
In their December estimate, officials pegged the terminal rate at 5.1%. Current market pricing moved higher following Powell's remarks, to a range of 5.5%-5.75%, according to CME Group data. Powell did not specify how high he thinks rates ultimately will go.
The speech comes with markets generally optimistic that the central bank can tame inflation without running the economy into a ditch.
Stocks fell sharply while Treasury yields jumped after Powell's remarks were released. Market pricing also titled sharply to a strong possibility of a 0.5 percentage point interest rate hike when the Federal Open Market Committee meetings March 21-22.
Federal Reserve Chair Jerome H. Powell testifies before a U.S. Senate Banking, Housing, and Urban Affairs Committee hearing on The Semiannual Monetary Policy Report to the Congress on Capitol Hill in Washington, U.S., March 7, 2023.

Federal Reserve Chair Jerome H. Powell testifies before a U.S. Senate Banking, Housing, and Urban Affairs Committee hearing on "The Semiannual Monetary Policy Report to the Congress" on Capitol Hill in Washington, U.S., March 7, 2023.
Kevin Lamarque | Reuters
January data shows that inflation as gauged by personal consumption expenditures prices — the preferred metric for policymakers — was still running at a 5.4% pace annually. That's well above the Fed's 2% long-run target and a shade past the December level.
Powell said the current trend shows that the Fed's inflation-fighting job is not over, though he noted that some of the hot January inflation data could be the product of unseasonably warm weather.
"We have covered a lot of ground, and the full effects of our tightening so far are yet to be felt. Even so, we have more work to do," he said, adding that the road there could be "bumpy."
Powell speaks Tuesday before the Senate Banking, Housing and Urban Affairs Committee then will address the House Financial Services Committee on Wednesday.
The chairman faced some pushback from Democrats on the Senate panel who blamed inflation on corporate greed and price gouging and said the Fed should reconsider its rate hikes. Sen. Elizabeth Warren, D-Mass., a frequent Powell critic, charged that the Fed's inflation goals will put 2 million people out of work.
"We're taking the only measures we have to bring inflation down," Powell said. "Will working people be better off if we just walk away from our jobs if inflation remains at 5, 6%?"
The Fed has raised its benchmark fund rate eight times over the past year to its current targeted level between 4.5%-4.75%. On its face, the funds rate sets what banks charge each other for overnight lending. But it feeds through to a multitude of other consumer debt products such as mortgages, auto loans and credit cards.
In recent days, some officials, such as Atlanta Fed President Raphael Bostic, have indicated that they see the rate hikes coming to a close soon. However, others, including Governor Christopher Waller, have expressed concern about the recent inflation data and say tight policy is likely to stay in place.
"Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time," Powell said. "The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done."
Powell noted some progress on inflation for areas such as housing.
However, he also noted "there is little sign of disinflation" when it comes to the important category of services spending excluding housing, food and energy. That is an important qualifier considering that the chairman at his post-meeting news conference in early February said the disinflationary process had begun in the economy, remarks that helped send stocks higher.
Markets mostly had expected the Fed to enact a second consecutive quarter-point, or 25 basis points, rate increase at the Federal Open Market Committee meeting later this month. However, as Powell spoke markets priced in a 69% probability of a higher half-point increase at the March meeting, according to CME Group data.
Powell reiterated that rate decisions will be made "meeting by meeting" and will be dependent on data and their impact on inflation and economic activity, rather than a preset course.
Watch our live stream for all you need to know to invest smarter.

David Goldsmith

All Powerful Moderator
Staff member
Q4 Update: Delinquencies, Foreclosures and REO

REO: lender Real Estate Owned​

CalculatedRisk by Bill McBride

7 hr ago

In 2021, I pointed out that with the end of the foreclosure moratoriums, combined with the expiration of a large number of forbearance plans, we would see an increase in REOs in late 2022 and into 2023. However, this would NOT lead to a surge in foreclosures and significantly impact house prices (as happened following the housing bubble) since lending has been solid and most homeowners have substantial equity in their homes.
Last week, CoreLogic reported on homeowner equity: US Annual Home Equity Gains Cool Again in Q4 2022, CoreLogic Reports
The report shows that U.S. homeowners with mortgages (which account for roughly 63% of all properties) saw equity increase by 7.3% year over year, representing a collective gain of $1 trillion, for an average of $14,300 per borrower, since the fourth quarter of 2021.
With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.
Some simple definitions (for housing):
Forbearance is the act of refraining from enforcing mortgage debt.
Delinquency is the failure to make mortgage payments on a timely basis.
Foreclosure is when the mortgage lender takes possession of the property after the mortgagor failed to make their payments. “In foreclosure” is the process of foreclosure.
REO (Real Estate Owned) is the amount of real estate owned by lenders.

Here is some data on REOs through Q4 2022 …​

This graph shows the nominal dollar value of Residential REO for FDIC insured institutions. Note: The FDIC reports the dollar value and not the total number of REOs.
The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) increased from $818 million in Q3 2022 to $829 million in Q4 2022. This is increasing, but still very low.

Fannie Mae reported the number of REOs increased to 8,779 at the end of Q4 2022, up 23% from 7,166 at the end of Q4 2021. Here is a graph of Fannie Real Estate Owned (REO).

This shows that REOs are increasing, however, this is still very low - and well below the pre-pandemic levels.

Here is some data on delinquencies …​

It is important to note that loans in forbearance are counted as delinquent in the various surveys, but not reported to the credit agencies.

Here is a graph from the MBA’s National Delinquency Survey through Q4 2022.

Note The percent of loans in the foreclosure process increased in Q4 with the end of the foreclosure moratoriums. Loans in forbearance are mostly in the 90-day bucket at this point, and that has declined recently (although it increased in Q4). From the MBA:

Compared to last quarter, the seasonally adjusted mortgage delinquency rate increased for all loans outstanding. By stage, the 30-day delinquency rate increased 26 basis points to 1.92 percent, the 60-day delinquency rate increased 13 basis points to 0.66 percent, and the 90-day delinquency bucket increased 11 basis points to 1.38 percent.
The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the fourth quarter was 0.57 percent, up 1 basis point from the third quarter of 2022 and 15 basis points higher than one year ago.
emphasis added
Both Fannie and Freddie release serious delinquency (90+ days) data monthly. Fannie Mae reported that the Single-Family Serious Delinquency decreased to 0.64% in January from 0.65% in December. The serious delinquency rate is down from 1.17% in January 2022.

Freddie Mac reported that the Single-Family serious delinquency rate in January was 0.66%, unchanged from 0.66% December. Freddie's rate is down year-over-year from 1.06% in January 2022.

This graph shows the recent decline in serious delinquencies:

The pandemic related increase in serious delinquencies was very different from the increase in delinquencies following the housing bubble. Lending standards have been fairly solid over the last decade, and most of these homeowners have equity in their homes - and they have been able to restructure their loans once they were employed.

And on foreclosures …​

Black Knight reported that active foreclosures have increased from the record lows last year, but foreclosure starts are still 37% below pre-pandemic levels. From Black Knight: Black Knight: Sellers Retreat From the Market, Increasing Inventory Shortage and Buoying Home Prices; Affordability Takes Step Back on Rising Interest Rates

According to Black Knight, there were 32,500 foreclosure starts in January 2023, up from 28,200 in December 2022, and up from the record low of 22,900 last July.

The bottom line is there will be an increase in foreclosures in 2023 (from record low levels), but it will not be a huge wave of foreclosures as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.

David Goldsmith

All Powerful Moderator
Staff member
The list of Co-op & condos on Fannie Mae's unavailable list appears to be growing. What happens to prices in your building when all deals have to be 100% cash?

Condos in disrepair across US revealed​

See which condos Fannie Mae won't touch
Condos in disrepair across US revealed

By Tony Cantu
02 Mar 2022
Florida, by far, has the nation’s greatest number of condominium developments – more than 400 – needing substantive structural or financial repair work with which Fannie Mae will not do business. California and South Carolina are a distant second and third, respectively.
New lending requirements by Fannie Mae and Freddie Mac are rooted in the collapse of the Champlain Towers in Surfside, Fla., that left nearly 100 people dead last June. The federally chartered corporations drafted guidelines to ensure structures are safe for condo borrowers and lenders. Although neither originates or services its own mortgage, each agency buys and guarantees mortgages issued through lenders in the secondary mortgage market.
Fannie Mae sent a letter to lenders outlining new requirements to qualify for loans on condos – namely detailed records regarding repairs, plans for future maintenance and a maintenance history.

Deferred maintenance is just one characteristic that would make a project ineligible for Fannie Mae loans. The majority of projects that are currently listed as ineligible have other eligibility issues, such as active litigation or hotel- or resort-type characteristics.
To further emphasize its point, Fannie Mae subsequently issued an “unavailable” list of more than 950 condominium projects across the US now deemed ineligible for government-backed loans given varying states of disrepair.
Mortgage Professional America obtained a copy of the list typically accessible through Fannie Mae Seller Services CPM credentialed access. The list shows Florida – the very state of the condo collapse that inspired the new lending requirements. According to the list, the Sunshine State has 414 projects no longer eligible for Fannie Mae loans.

It appears states with leisure activities that draw condo dwellers are most represented on the list. Following Florida, beach-abundant California is listed with 80 projects in enough disrepair to make the line-up. Famed for its shoreline of subtropical beaches and marsh-like sea islands, South Carolina appears on the list with 57 condo projects off limits to Fannie Mae and Freddie Mac. Hawaii has 30 condos on this list – including four in Honolulu.

Size doesn’t necessarily equate to greater numbers of developments either. Texas had just 19 condo projects listed in Fannie Mae’s “unavailable” list, including three in the state capital of Austin.
Orest Tomaselli (pictured), president of Project Review at CondoTek, told MPA the new rules will make sales of certain condo buildings difficult at best and impossible at worst. The reason is that other lenders have followed suit and are opting not to provide financing either.
“What that means for the industry, if you’re a condo development on that list not only are you not compliant with Fannie Mae’s guidelines and lenders can’t sell loans to Fannie Mae, but every other underlying mortgage lender for cooperatives and every other lender in the industry – whether it’s a non-warrantable, non-QM loan type of lender or investor – they’re all looking at this list. And they’re also aligning with that list and not lending in those sites.”
The domino effect has already begun as Freddie Mac followed Fannie Mae’s lead in rendering such condo units ineligible for financing. Tomaselli said mainstream lenders had already begun aligning themselves with the same stance.

“Fannie Mae and Freddie Mac are really focusing on three specific aspects of condominiums and cooperative lending,” Tomaselli said. “Those are the infrastructure of the condominiums or cooperative developments to make sure they’re not in serious disrepair, to make sure that those infrastructure components are being maintained or replaced appropriately. Number two, they’re looking at the financial wherewithal of these developments to make sure they have enough money to actually do the repairs to the structure and foundation and everything else that’s necessary.
“And the third aspect of it is really to enforce the gathering of information about these developments so they can compile the appropriate list which comes in the form of updated questionnaires specifically pertaining to structure, condominium and finances of a condominium development. Those are the three aspects of this new guidance. If you’re out of line with any of those, Fannie Mae is going to put you on this unavailable list that they created, and that’s what’s going to make major changes in the industry because nobody wants to be on that list.”
The granular level of detailed information now needed for mortgage financing will lay bare for condo owners their building’s state of disrepair, Tomaselli said. He predicted some may go into foreclosure as a result of the heightened requirements.
“I’ve seen projects in the past you couldn’t lend to,” he added. “Inevitably what happens is that values plummet and people start going into foreclosure for various reasons – they can’t make their mortgage payments, they can’t make the increased contributions for the repair work that needs to be done to the development – and once that starts to happen, when financing isn’t available in those sites, it just leads homeowners down this path of going into foreclosure.
“And the worst part about it is the people who bought those units had no clue because this information had never really been required before when a lender was providing mortgage financing. So, when you signed a contract to buy a unit, yeah, there was some due diligence that went on but not to this extreme. I think what’s going to happen is, for a lot of homeowners, they’re going to have a rude awakening their development isn’t structurally sound.”