1st Quarter Housing Market & Loan Delinquency | Real Estate Notes Show

Episode: 1st Quarter Housing Market & Loan Delinquency w/ Melody Wright @m3_melody Dave's Goals and Plans: - We operate in any market regardless of conditions - Challenging people to attend conferences and spend time/money/energy to network - Been in the business for over 15 years mostly foreclosing defaulted loans and dealing with properties - Assumption that performing notes will eventually default at some point Nathan's Goals and Plans: - Love hearing different perspectives and approaches to note investing beyond just performing/non-performing or first/second positions - People don't realize it can happen that notes can default - We're geared up for the same kind of market mess we came up through, which creates opportunity - We're finally getting to the point where the market is going to break Key Recommendations: - Understand there is a right way to do note creation and a backend to cash out of notes - Attend conferences to build relationships with experienced investors and find deal partners - Understand that note investing is fundamentally different from traditional real estate investing - Learn the rules of the business before getting creative with approaches - Know that the data people thought they were hearing about in the market may not be accurate or reportable Topics Discussed: - 1st Quarter Housing Market conditions - Loan Delinquency trends - Note investing strategies and methodologies - Proper note creation and backend exit strategies - Market uncertainty and economic outlook - Differences between note investing and traditional real estate - Networking and relationship building at conferences - Expected market correction and opportunities from defaults Guest Insights: - Melody Wright entered mortgage industry in 2006 right before the financial collapse - She worked at one of the big five mortgage companies during the crisis - The GFC (Great Financial Crisis) lasted longer than 2008 Hey everybody, I'm Dave Puts from JKP Holdings.

Alongside me, Mr. Nathan Turner. How are you, man? Hello. Catch my breath. It's good. Yeah. Well, welcome back everyone but back to this real estate notes show. And just before we get started, we'll do this again. We want to make sure that we are sponsored by Call the Underwriter. If you go to call the underwriter/jkp, you can get a free toolkit on creating notes. Dan Depp's an awesome guy. um he'll teach you anything you need to know. He actually runs a call later on today on creating notes. So if you are in that space, you're looking to grow, please check out that uh call theunderer.com/jkp.

So with that said, we wanted to see what everyone's reaction was after the DME, right? And see what's happening. What was your reaction or thoughts after that? That was so much fun. That was great. Uh, we had a great time. I I had a lot of positive feedback. Everybody seemed to to really enjoy it, which is great. That's what we're going for. Um, I think there was some discussion on, you know, some continuing discussion on what are we seeing going on in the market and what's coming down the pipe. And, and again, it's interesting. You know, it's it's uh I don't care which side of the aisle you are on politically.

I think the word of the day is uncertainty. And so, that's uh That's just, you know, something to throw into the mix. Uh, where who knows what's coming down because announcement today, revoked the next day. And again, I'm not saying good or bad. I'm not saying right or wrong. I'm just saying that's how it is. And so, it's making just for uncertain times, which in our business is actually great. Uh, you know, as much as we don't want to see anyone suffer or have any kind of troubles, but uh, but it works for us. We we can operate in any market. Yeah, absolutely. So, I know there's some issue with some internet right now.

So, I apologize for anyone who's catching this will be replayed and um and shown on the YouTube channel and our podcast. I did see the uh some weather out here. So, hopefully this will clear up in a minute and uh we'll get everyone tuned in and checked out. So, awesome. Um, with that said, I think people on the most part when we talk about going to conference, the most common conversation we have is boy, it was awesome to talk to other people that understand what I understand. 100%. For me, that's what we all talk about it, right? Yeah. That's amazing. What a great thing to get together. Yeah.

have people know what you're talking about when you when you start talking about what you do. And I always find that so refreshing. Anytime you go to a conference and you get into a group of people that are on the same page as you and they know what you're you're up to and what you're doing and can relate on a different level, it's it's great. What a great time. Yeah. Yeah. Absolutely. So, I I I challenge those who are always contemplating going away and spending the time and the money and the energy to please be sure, get out there, take a shot. I talked to multiple people at the DME and they says, "Listen, I can't wait to get together with other people.

I can't believe the things I've learned, the experience I've had, and the relationships I've built by being with people that I would never have met elsew else-wise." Yeah. Yeah. And I, you know, new deal partners, new people we're working with all the time. Where do I meet them? At conferences. Uh whether it's mine or somebody else is that's where we get together. That's where we get to know each other and get to a point where we can do some business. Absolutely. So with this said, where do you think you saw the most growth from DME? What was the most growth you saw? what was what you got out of it at at the end of the conference? Oh, that's a great question.

Um, I really liked hearing the different perspectives from different kinds of note investing and and different approaches and different things you can do. It's a small small enough niche to begin with, but it's fun when we start comparing notes and seeing like, you know, pun intended there, but we start comparing and seeing like what else can you do in notes. It's not just all about performing and non-performing or first or seconds. That's just scratching the surface. And then you can get into all kinds of other things and strategies and ways to approach the business. So, I I love that. I think it's a lot of fun.

Yeah, absolutely. With that said, I think most people um when I talked to them either were extremely experienced or brand new or there was a very few in between as we you brought up at the beginning of the conference most people there were experienced. So if you are looking for relationships in that space, why not go where all the other people who are experienced go to? Yeah. there. There's nothing better than going into a room and not being the smartest one in the room. That's perfect. That's exactly what you want. And and getting into that kind of a space so that you can be elevated by the people around you.

Uh yeah, what a great way to just lift yourself and lift your business and those around you. Yeah, absolutely. So, um hopefully this will this internet will get fixed in the meantime. I apologize again. Um hopefully the recording will be live and be uh on YouTube as well as on our um our podcast and everything else. So with that said, Facebook it's kind of choppy. Yeah, I don't know if I can reset everything before it goes crazy. I know um hopefully we cleared up was probably the weather out here um but not sure. So uh we'll go from here and see what happens. So what would you say the biggest misunderstanding most people have in the notes space creation side and the linguist side that are maybe unsure about like what do people not know out there? I think on the creation side I I don't know that the message has gotten across all the way yet that there's a right way to do it.

Uh and then that there is a back end. I those are two things that I think a lot of the people that are originating don't know. A lot of people are doing it right and I know we've got some really great friends in the in the industry that are helping to teach that and we want to continue that for sure. Um but then even then I I don't know that a lot of people know even still that there is a backend. there is a you can cash out of that note that you've just created if you want and at the very least have that as an option uh going forward so that you can decide how you want to attack the business.

Wonderful. I think you're right. I think people just either get into it and just try and hopefully get them working or are learning as they go along. Right? And I think that both I can understand both happening. I think people don't realize how different this space is from traditional real estate. I think that's the biggest problem people have. Right. Right. So, yeah, it's not the same thing. I I stress that all the time. This is not the same as real estate investing. Uh we are an appendage to that. We're related to that. It's a it's a piece of it. The real estate part is a piece of what we do, but it's only a piece.

And if you don't know the rest of the story, you're going to get yourself into a lot of trouble. So yeah, make sure you understand the rules of the business, how it works, you know, why it works, and then then you can start messing around and getting more creative and deciding how you want to approach it. Absolutely. Awesome. Um, hopefully people get a lot out of this as they go along in their space here. I think people don't realize what they don't realize. So, right. Awesome. Hopefully everything will get cleared up in a second, but uh it looks like the internet's back up. So, let's go from here.

So, Nathan, when we talked about, you know, the note space, we came from a world over 15 years of doing, you know, mostly foreclosing defaulted loans, dealing with properties, dealing with borrowers, little bit performing notes was actually a very small piece of what we've done simply because of the market that we got involved with, right? Yeah. Um, and the timing of it. Yeah. Yep. Yeah. But and most people didn't realize that, right? I think people don't realize it that it can happen. And I think that's the the difficulty we struggle with is that people just don't realize it can happen. So, right.

And it's I we've talked about this several times where we're in a way we're kind of jaded where anything that we look at performing notes that we're looking at our assumption is that everything's going to default at some point. Somebody's going to stop paying uh and eventually everybody's going to stop paying and right or wrong. And that's kind of the world we came up through. So that's our our viewpoint. That being said, history repeats itself and uh looks like we're kind of gearing up for that same kind of mess that we came up through which can be hard for a lot of people but again it creates all kinds of opportunity for us to help out.

Absolutely. Um one thing we've been saying since co is that we're going to hit a a wall soon. This can't keep going but we struggle with is that it's kept going for a long period of time. Yeah. And we're kind of surprised by that. Yeah. Definitely. Right. Yeah. 2019 we were all waiting for what's the thing what's going to happen that's going to make this turn around and when COVID hit I think I mean we had several meetings back then where a bunch of us got on the on a call and said okay what do you guys think and what what are we doing and we all expected there to be another big wave and again right or wrong what happened was a whole bunch of money got injected into into the economy and was that the right thing to do at the time I don't know and maybe history will be the teacher on that one.

But, uh, that's what happened anyway. And so, it's it's propped it up for these many years, but I think we're finally getting to that point where it's going to break. Yep. Yep. And I think we're going to see it sooner rather than later. Um, as we start seeing some of the breakages privately. Yeah. We're going to see this nationwide. And what we heard at the conference was a a DME conversation that regarded that a lot of the data that we thought we were hearing about wasn't there and there's no way to report that. Right. Right. So, yeah. Interesting. All right. Well, hopefully the the feeds will get caught up uh real soon and uh it'll get fixed as we go along here.

So, um I don't want to stop anything to cause a problem. So, let's let's move on and hopefully uh everything will be cleaned up. So, let's bring on our guests. I think our guest has needs no introduction at all. I think that uh we're we're really happy to have somebody as good as Melody come on and share not only the details but the the knowledge, the experience, everything else. Yeah. Yeah. So, uh let's bring on let's bring her on. Did we lose her? I think we lost her. I'm here. Up you are. Okay. Let me see where we went. Okay, there we go. Hi, Apollo. There we go. Awesome. So, Dave's over there juggling techny him.

Yeah. So, I apologize for his craziness. Right. So, tell us a little bit about who you are, what you've done, and what we can expect in this conversation this afternoon. Sure. So, um I fell into mortgage in 2006 by accident. Um for lack of a better idea, as most people when they fall into mortgage, um and I was I got in right before things started to collapse. Um I had to ride that storm out uh right in the heart of everything. We were one of the big five. So, uh pick your movie. We were a character in that movie and my life basically got stolen. Um, a lot of people thought that the DFC ended, you know, 2008.

It was Do you What? Say it again. What is that again? Uh, the great financial crisis or um, you know, uh, some call it the global financial crisis, whatever. GFC. Thank you for stopping me there. Yeah. Um, you know, I it really went on for those of us in the business all the way up to like 2014, 2015 where it kind of like petered out with a whisper and that was largely because Wall Street got invited by the agencies into the space to offload a lot of those default properties. Enter. This is how you guys get involved, right? Um because they then sell them off um you know to folks that are interested.

So, uh really I I can't even describe what that time was like. But at the end of it, after going through our bankruptcy and all kinds of stuff, uh I managed to fault uh because we were getting threats from the agencies that they were going to pull servicing, which would have meant a lot of people would have lost jobs and servicing. What is that? That's just, you know, taking the payments uh if they go into default, taking those actions. So um from there I tried to go out and help other non-banks really get their houses in order uh because you know what we were starting to see was this explosion of non-bank lending because of the Basel 3 uh requirement.

So that that's just basically it was stricter for the banks put it that way and the banks um got risk weighted on their mortgage assets and they kind of said I'm not playing around anymore in this space and and definitely not at the scale that I used to. So the non-banks kind of stepped in. they had, none of them had really been big during that time and so they really didn't understand a lot of uh the regulations in the same way that many of us did who kind of were there as they were being written. So, put it this way, they weren't all that interested. Um, and you know, I kind of got to the point where I realized nothing could change a mortgage until technology changed.

And so I because the techn is from the 60s, early 70s, uh, blue and black screens. And so I went off to fintech and tried to change it from outside of mortgage proper um to realize that because of sort of the monopolies uh of technology min monopolies like ICE and folks like this that just really that wasn't going to work either. Um and then I started diving into macroeconomics. Uh something I had done in my academic career but I'd kind of pushed to the side because one of the people that I worked for said when are rates going to rise? because we had a very heavy origination arm and they were making bank, right? I mean, this was just crazy back then.

I I remember not sleeping, eating. It was crazy time. I remember being at PNC and uh we were imaging like through OCR, which is uh like a technology optical character recognition. We were doing something like 30,000 pages a day for ref. And that went to a million like overnight. It was insanity. And so it was just nuts because everybody was going to refi refinance. Um, and so, you know, I started really diving into this and and and reading books and looking and I joined Twitter. I'm not a social media person that some people are going to laugh with me saying that, but I really wasn't. I can't even get me on Facebook to look at anything.

Um, but I joined because there were certain economists that I couldn't find their stuff anywhere else. So, I went on Twitter, started really getting into what's called Finn Twit. That's what they call it and it's like financial Twitter. Um, and I started posting when I really, you know, I started getting concerned in 21 and and I was reaching out to industry insiders and saying, "Guys, this isn't sustainable. We don't even home prices are going accelerating so quickly. We don't even know how fast and how high." And sure enough, you know, where we are now, um, you know, Nashville, actually, Nate, uh, they just came out and people are getting their tax notices and they are freaking out in Williamson County because, uh, the valuations have just gone through the roof.

Meanwhile, downtown, uh, those valuations are going down for the commercial real estate. And so, put it this way, there there's a there's a huge overhang to home prices getting this high, including rising property taxes, rising insurance, um rising replacement costs, as well as with inflation and things like that, people haven't been able to do repairs to their homes. And so we know um you know essentially the values already are out there that were inflated because we just went into this craziness of FOMO or fear of miss missing out and you only live once. And then on top of that what I don't think people really understand about the housing market that got started in the late 90s um really even late 80s I should say is how much investor speculation has come into this market.

how much people see owning real estate um as uh you know kind of a hedge, right? And and so pi people from all over the world piled in, people from Canada, people from China buying buying our real estate and a lot of it sits empty. We have over 15 million vacant properties in this country. Um and an additional three million seasonal properties. Okay? So, uh I encourage everybody on your drives uh just look around. there's so much vacancy because we're also entering a situation where um you know we have a large generation that is aging and leaving us and they are they are the ones who own most of the homes and so I've been helping with several air situations um where people have inherited a home there's some kind of issue with it so we're seeing this in mass because Harvard recently just said to us between 2025 and 2035 we're going to lose 15.6 6 million boomers and between 2035 and 2050 we're going to lose 23 million.

So let me back up David to how did I so I just started tweeting and I was deep into this research and one day I got up and read an article by Bloomberg that infuriated me because I just couldn't understand why anybody was missing this housing story. So, I got in my car and the first place I stopped was Nashville and I drove the entire perimeter, the downtown and I was floored by all the new build construction and I was like, "This is crazy." Then I got to Austin and that was just a whole different level. So, anyway, since then, um, I've driven over 10,000 miles. I've flown way more than that. And, um, I write about it in my Substack.

I do I go on YouTubetubes and talk about it. I attend conferences and so, you know, this has kind of become my full-time job, although I I still do have mortgage clients that I help with things like subser oversight. Um, you know, due diligence. What is a subser typically mean? Okay, so servicing gets super complicated. Uh, you know, there's a master serer, primary subser. So, a subser is kind of like, let's say I'm Chase, okay? and I have a huge book, but I want to send my default my delinquent out to somebody who specializes in that. And so they're gonna say, "Okay, although I do service my own book over here, this chunk I'm sending to this serer over there, and that they're going to be my subser." And so I pay them fees to service my loans.

Whereas when I, you know, I own my servicing, that's that's how I'm kind of compensated. Um so uh subst so through all that legislation that happened way back then the biggest component was lack of third party oversight and I saw this very much in my own company. Um all of a sudden I I would go to talk to people like why do we do this this way? Why do we do this? And and people were clueless about how you know how servicing actually worked. We just hired a whole bunch of vendors to do it for us and we just believed them that they were doing it correctly. And so that was one of the biggest things from the the OC or the office of the controller is that you have to get your house in order and you have to do oversight of your third parties.

And so one big requirement for all the mortgage um folks is that you have to do like monthly scorecarding looking at uh different metrics making sure that they're doing their job. Um so that's a subser. Gotcha. Awesome. Yeah. So I said a lot. Why don't you go ahead? Yeah. So, so let's back up here for a second, right? Y there are two different worlds of different servicesers out there. We have our big boys who service millions and millions of loans that are we all used to in our personal life. And then you have a whole sector of servicesers who are not on the blips at all. They're just privately held and they have private notes that we all get into that the big boys don't even touch or wouldn't touch.

That's right. Right. That's right. Absolutely. And and that's the big problem with data collection. And I think also um probably what's so important for everybody I I think we all think that um because we have this technology in our hands that that's technology is like that everywhere. Um, no it's not especially not in mortgage, not in credit reporting, not in Experian, all these different things. Which is why everybody's waking up suddenly shocked uh that people who were defaulted on their loans for 5 years, they're waking up to their credit scores dropping 180 points overnight. You know, like these things just weren't getting reported to credit.

And the way that you do this is very complicated. And um it certain certain things can override others, put it that way. And so when you're looking at a credit report, you're not always getting the most accurate. Um I'm sorry, like when you're looking at a credit credit panel like the Fed does, you're not always getting the most accurate information. Um so, you know, the other thing to your point, David, is a lot of these specialty servicesers aren't on the Black Knight platform, which is the biggest platform uh that servicesers use. that's what the big boys use. Um, and Black Knight is who does all of the delinquency reporting out there or the lion share of it in the industry, but they only have a third of the mortgages on their platform.

Um, they do have others that will send their data in, but it's not the people that you're talking about. Yeah. It's not those smaller servicesers that are actually dealing with the default. Um, so and I call them specialty servicesers and and so a lot of those folks don't get included in that black knight data. Uh, and then it you say, well, the Fed tracks mortgage delinquency. Well, I wish they they track it for the commercial banks, which by the way, guys, um, that schedule should be updated. Uh, we it should have been updated the middle of April. It still has not been published um by Fred. Uh, which I find it's just I don't understand.

It should be there. It comes Yeah. It's a quarter. Yeah. So yeah, it's very interesting because there's a lot of I think I don't I'm not like you. I'm not political, but I just think there's a lot of uh interesting things going on right now and it's more infighting, not not give me my delinquency schedule. But anyway, the point is that that's just the commercial banks that they're tracking. And what we know is the non-banks do the majority of lending. So if you're looking at just and by the way the commercial banks some of them most of them learned their lesson. Uh some of them definitely did not uh you know but people like Chase for instance got out of FHA uh they understood how risky that product was.

Um now others did weren't they didn't learn any lessons but some did but so it looks very low and also what happens uh Fanny and Freddy will sell off all their non-performing loans as you guys know and they just announced a big deal um as did FHA has different programs that they use. So you know we just don't we're not getting reporting from I'd say twothirds of the mortgages out there in terms of like from a servicing platform. um you you do have that uh bank which is about 50% of what the banks have, but there's just so much out there that we don't know about. And so it's very and and and the census did a really cool it's called the census pulse survey last year.

They started it during CO um where it was a survey about what's going on in your household and they had a question, you know, are you are you delinquent on your mortgage? Um, and what we saw there last year around this time is it was way higher than any number we had seen anywhere else. And unlike all the other surveys, this survey was actually increasing response. Most of our surveys that have been done before COVID, like the employment survey, um, we're they're seeing lower response. And so we just know that we don't have a true understanding of delinquency out there. and then enter in the sub two friends who are out there um you know an army looking for any sign of default to go in and swoop in and I think I've got several in my client books right now because I just had a sale stopped in California uh and I think it was one of these guys talking to the borrower um and so because she she would not know how to do this put it that way uh so you know this army because pays Morby has 10,000 followers, if more, I don't even know.

They're out there looking for any signs of distress and picking it up, right? At least they were when they could turn these over very quickly. I I think that that is starting to change uh because the appetite has started to change. Um and so I think we are starting to get an inkling of true delinquency. But if if those servicesers that you talk about don't report to Experian and they don't have to. They can they could report TransUnion. They cannot report at all, then the Fed has no idea what's actually going on. And what's and and they just they just published uh the Q1 um credit panel and boy, it is insane.

Uh student loans went up like a hockey stick, which we kind of expected, but we also so saw mortgage go up. But guess what's going to be in Q2's credit panel and this is not even my bomb show yet. What's that? It's going to be a firm is now reporting to credit and that's buy now pay later. They started that May 1st and and on FinTit you're get and Reddit you're hearing all these stories about credit being shut down like they're actually now being denied whereas by a firm they weren't before. And so I can't wait to see the Q2 credit panel because it's going to look kind of crazy and and and we saw the Fed published um their survey of consumer expectations.

They have sections where they talk about what actually happened and what consumers expect. This is what actually happened. 41.8% of mortgage refinances were rejected in February. 41.8. The highest since they started tracking in 2013. So we the the consumer is not in the shape that everybody thinks because they when they couldn't get the money uh in the traditional means just like the bank stopped lending for mortgages they went to a non-bank they went to the shadow markets um and that's so we are in a situation where I think the shadow markets are are a big part of the story and no one actually understands but like we you and I were talking Before the show, David, a lot of what I say can sound like doom and gloom, but I really only follow the data.

I only follow the stats and I follow what I see with my own eyes. And I that's why how I ended up at your conference because I was like, what are these private note things? I I need to understand. And so I'm always asking questions. Um, which is why I really started when I started seeing in my servicing book uh for my clients things that I had not seen even in the last craze uh in the run-up to the GFC, I really started to get concerned and I was really f I'm focused on FHA because it's much bigger than it used to be. Uh it used to be about 7% of outstanding mortgages. It's now it goes between 13 to 15%.

Wow. And it's so it's huge and this is basically government subprime. Uh anybody can look up the requirements, but you can go as low as a 580 credit score. Uh it's, you know, 3.5% down. As well as uh if you get into trouble, they have these massive loss mitigation programs. Uh where you can take up to 30% of your unpaid principal B uh balance and put it at the back of the loan if you miss those payments. And so people were just doing this repeatedly over and over and over again. Um and then the Wall Street Journal I I mean this is something I've been reporting on for two years. The Wall Street Journal came out with a big article that said um we had nine FHA foreclosures last year and we did 500,000 workouts.

And what they didn't realize or and and this article kind of called it out but not as much as you could see in the data is a lot of this was fraud, David. This was investors taking out these FHA loans. Oh my lord. blaming owner occupancy. Uh instead it was an investor. Um and you had actual originators. It looks like actual originators were kind of in on the scheme and telling investors, you know, you won't even have to pay. Like you don't cuz we would see certain originators, you can go into neighborhood watch. Certain originators were showing a 50% early payment default rate. I mean guys, if we'd had anything like we we wouldn't have even allowed ourselves a 1%, okay? Like that is something you track religiously.

Although I got to tell you so many of the things that we used to track and it just feels like a lot of that has gone out the window unfortunately. Um and so FHA is very concerning uh that you know this is a program that's supposed to be for first-time home buyers. Yep. Uh we had the lowest amount of first-time home buyers ever last year. this program has been used by speculators. Um, and you know what I just recently found and so let me stop and just see because I I went straight to FHA, but David, you tell me where you want me to go before I So, let's what pause there. What I think you were saying before about that what is not being because we can all look at the NBA and all stuff and see what the federal stats are.

There is so much stuff that's not being reported and it's not even credit. Like, they can report the credit. Most don't. But there's no way to other put anything. We couple of people at the conference talked about there's no way to upload data to the federal government, right? There's no way to track what are wrap notes because you and I both know that they're not putting wrap notes in any kind of federally ran servicesers. That's in a secondary market and there's no way to track that. And so there can't be news about it because it's not data that can be tracked. Exactly. I mean Exactly. And it and it's just so hard for people to understand.

And I got to tell you, I have a client, one of the things I do for them is fill out the schedule to the NBA. Uh so you were we were just looking at that NBA report, right? Um yeah, that you had up. Nobody's filling these things out, right? I'm telling you right now, like it's manual. It's it's by hand. And it's probably relegated to some person who doesn't I mean, I've seen it in these organizations. It's an it's a it's an Excel. Okay. And the way the questions are worded, it doesn't come with a manual. I mean, you can interpret it however you want to and there's nobody really to ask on the other side.

So, I'm just saying that there's a huge picture we're not getting out there. Um, and in times like that, I have to I have to go out see it for myself, you know, and I but then I also look around in my own life. Who's who's a person that I I know is doing the worst in my life? who's the person who's doing the best financially and then how many of those do I think are out there? Like looking at the stats in terms of you know we know that the top 10% are the ones that own 90% of all stocks. We know that 50% of consumption is done by the top 20%. So you know you can really look and see okay what's really going on in the economy and unfortunately what we have seen is that the bottom of the K has been suffering for a very long time the middle of the K has joined the party and you are now seeing the super prime come under stress for things like failed multif family deals.

Um, you know, stocks have rebounded recently a bit, but people are shaken because all of a sudden overnight, you know, people are like, "Oh my god, uh, this is my retirement." You know, and and I think that we haven't seen the last of those drawdowns in the stock market. But um you know so we're we're kind of entering a very precarious time where all these shadow markets all this private credit uh I read a great study from a guy who tracks uh just bank balance sheets. So guess what lending has increased? It it it's not to mom and pop. It's not to Joe and Jane. It's so the largest increase of notes being created, lending being created is to private credit.

It's to it's it's like to these companies like a firm. It's to these so it's called non-depository financial institutions or NDFIs. And so you can look at the banks and what they're doing is they're funding all these operations like a firm which is I mean that's a house of cards. I mean I'm sorry it just is. Um and and because and so this is this is very concerning. We've got so much speculation out there uh in these companies that again are not reporting to the government. Wow. So just a so we're missing a giant piece of the puzzle as far as the data is concerned. Absolutely. Absolutely. And and it's and if you don't and here's the thing.

So last night I had the honor and it was very bizarre to um be on a spaces with Steve Iceman and I don't know if you guys know him but he's basically Mark Balm from the Big Short. Um and it was fascinating to me. Um, if you are not digging into this stuff and just reading mainstream media and watching CNBC, you will be completely clueless. Um, because you're making assumptions. So, what Steve's assumption was is it was very similar to my starting out assumption because I didn't think there would be problems in mortgage credit. I was like, "No, DoddFrank fixed all this. This isn't going to happen again." And then I what I started seeing in my servicing books as well as understanding credit scores were inflated as well as understanding how people felt that they could they only relied on automated underwriting systems which go off that credit score.

So if that credit score is inflated you've got a really bad assumption in there as well as you can gain these things. I have seen things I'm going to say it again that I never saw during the crisis. I mean, you would have never lent to that borrower. And so this time it was just sponsored by the government. And you know, and and my my clients are also experiencing, they don't get to say no if automated underwriting system says yes, you could be accused of discrimination. And so, but yet when that loan goes bad, the agencies are going to turn around and make them repurchase it, which is a huge impact to liquidity.

And so it's really you're you're sitting in a place uh that's not fun at all of contradictions where none of your vested those parties that um have vested interest in you they they're they conflict all of those interests uh kind of conflict. Wow. I wonder, you know, is there any way to fix these problems or fix these strategies or where are we with all that in terms of of fixing the data or just yeah fixing just making sure things more reported like you know just that we're all looking at these emails and these news reports and saying oh man this is good or this is bad. Is the federal government doing anything to kind of or the feds data points doing anything to kind of make sure it's better? It doesn't seem so.

And you know, mortgage is complicated. I And you know, and you guys talk about your secondary market and we have a different secondary market. I mean, it's just these these securizations are so complicated. and I worked for a senator who actually ran for president and I can tell you that a lot of them would have difficulty understanding this market and so it it is um they just don't understand uh I mean I read an anecdote that um Chuck Schumer didn't know that the BLS double counted jobs. So like if you hold two jobs they count that twice. I mean, so there's just the these things have been reported for so long, people just take them as um you know, the source of truth without really doing any digging.

And so, okay, no, I don't see you know, I really don't see any concerted effort to try and um to change the way that this data is reported. Not yet. Okay. So then what does it all mean? like if if all this data is missing uh you know we're hearing anecdotally but if if we can't gather that data how do we know what's going on or what does it point to I think we have to triangulate uh and and Nate and look at the data we do have right and and look and try to take different data sets and and and look at them a different way you know I have one of my good friends Danielle D Martino Booth I mean she goes out she looks at internships over time and we have much fewer this year like you know just different um alternative data points but we can look at FHA and uh and that's why I focus on it so much because that is the riskiest cohort in my opinion.

You could say that the private is non-qualified. They're at about a 12% delinquency rate but they're only 3% of the market right now. So I focus on what I do know and and what I know about FHA is just how much I mean they're over 12% delinquent. That's 7.9 million loans. So, if you look at that, that's about a million loans um in some sort of delinquency. And now, here's the bombshell uh that through a colleague of mine, we realized uh when I got back from the uh the conference is that uh you can't you're not eligible for an FHA loss uh mitigation solution if you have delinquent student loans.

The way So, that So, let's break that break that down a little bit. Right. So, how many what is the percentage of people with FHA loans right now? They're young. Uh, so I don't have the exact, but I can tell you how many uh have student loans. Uh, so I don't have the age breakdown, but in 2021, uh, HUD came out and said they had 45% of their borrowers had student loans. 45%. And and I can tell you that was 21. What has happened is FHA just started giving out loans like candy through the, you know, um and and to your point at the beginning of this conversation, you know, I think there was a lot of election year politicking to keep this to keep everything just going like this, right? Absolutely.

Um and so that's why we haven't seen the distress because they came out they it was April of last year that they came out with this crazy program that said, you know, we're just going to keep cutting you a check, cutting you a check, cutting you a check. You're three months behind. Okay, here's a check. Another three. Okay, here's another one. So, um, but so here we are. So, I'm going to say it again because it's so important and I'm trying to find out from the servicesers how this is all going to work because this is so they have a student loan that they've in the past defaulted on or or or is it currently defaulted? Which one is it? It's currently delinquent.

delinquent if any fashion they will not do any work out or even have a conversation to work out with that borrower at all. Well, they'll have a convers but they the borrower won't be eligible. And so there's 9 million student loans right now that are in some stage of delinquency. So let's take our FHA uh you know 1 million potential for loss mitigation. So, uh, we know that student loans are at a 20% delinquency rate right now. And so, just with this alone, you could have in Q late Q3, really Q4 probably. Okay. Uh, well, well, this is what I'm trying to get clarified right now because this is an old requirement and and the way we think they got away with it is that these loans weren't being reported to this Kyver system, which is uh like the federal debt.

you check it and say, "Okay, who has federal debt? Do they have tax debt? Do they have this debt?" Because that makes you ineligible. We think all of that reporting to Kyver was shut off. And so, I'm trying to find out from servicesers right now. And if anybody listening to me knows, I I want to hear I I'll have an answer in a couple of days. Uh, one serer I talked to thought this wouldn't be uh implemented until October. And I said, "No, this is an old requirement." So, they're getting clarification. Um, but that could mean like 90,000 folks like just boom overnight are are going to be ineligible uh for a loss mitigation.

But that's not even the worst part. my friend uh colleague John Kamiski, he he loads every month the Ginny May data and based on looking at and putting together life of loan um kind of snapshots, there's between 200 to 500,000 of these folks who have gotten repeat partial claims, repeat workouts, which means as of October, they have no other option. No, not for two years. And nobody out there uh with FH loan has two years. That that those that was that was two years ago. So um you're talking about in Q4 Q1 uh potentially anywhere from 200 to 500,000 like uh folks foreclosures hitting. So it it is and and so we're my friend John and I he's working on the numbers in the back end.

Um, but this is this is just the stats, you know, this is and so we have like looking at this data tells me everything I need to know. And then what I also know is that the Fanny Freddy books are much weaker than anybody believes because of this credit score issue. And we're seeing all over social media people say, I I got a call from my bank overnight. My credit score went down. We'll we'll be starting to hear about uh credit cards being cancelled, home equities being frozen. I mean, this is this is what's going to because these all the home equities have a credit score trigger. And I remember having a conversation a year ago uh with someone who wanted to get into home equity and they were like, "Well, it won't be a big deal." I'm like, "Oh, no, no, no.

You want that credit score trigger." So, overnight you've got servicesers waking up to, oh my god, like what is happening? I mean, so it's they were already starting to come around uh to uh you know, I'd say in October of last year had conversations with them. They weren't as interested right now. They are definitely understand that distress is here and the default cycle has begun. So, so commented C AI VR Syver. Yeah. So the question there that he had was uh how delinquent like when we're talking about delinquencies. Yeah. So I it's delinquent at all from the understanding of just 30 days. Yeah.

So uh once you hit that and that's you know guys if you don't know when you hit that 30 that's when it get it goes to your credit score. And so um you know it this this is this is a huge this is so huge. I I I still can't even believe it. That's why I'm talking to servicesers to see how this is going to be uh enacted and if they thought this wasn't a requirement that's going to be very fascinating. Um so yeah you're just seeing it it's gradually and then suddenly you know that's the old quote and right now what's happening and you can see it in retail sales. Yes, we had some front running with the tariffs people buying cars because but if you exclude the autos you can see retail sales were down.

So our top our top 20% is pulling back on spending. Travel is looking very weak for the summer. Um so so every all signs at the moment you know people watch the stock market to understand the health of the economy that has remember when we were in the depths of co the stock market was mooning right. So it is not that that is not a reflection that is a casino. Yeah. And it operates as such. So what are you seeing in the serer world? Because you know that's some data that no one can touch on delinquencies, right? Um have you talked to some of the bigger servicesers out there to get an idea of what is performing, what's not performing, percentage of performing? What have you been hearing through the whispers? Well, I mean, honestly, I you know, I just use my client books, so I don't I don't even have to I mean, they what so I'm hearing stuff, David, and for the longest time, nobody was interested in talking to me, like when I asked, "How's your delinquency?" Like, D uh I'm hearing stuff and I had a conversation with a very large serer last week or two weeks ago, maybe right before I came to your conference.

Time has I don't even know what day it is. Okay. um that they were concerned that they it was the change in tone and honestly uh the shutting down early of that FHA loss mitigation program and we kind of glossed over that but what the administration did was they shut down uh this program and they put a limit on it that you can only get one of these every two years and that program will expire at the end of September. So there still be loss mitigation, don't get me wrong, but this was so over the top. And by the way, a lot of FHA has already used their workouts and so they're going to foreclosure sell.

If you just look at the level that Black Knight reports of foreclosures, um, we're actually at January of 2007 levels. And so you they won't say that in the report, but if you just have the historical information. So, we have just there's just been a lot of gaslighting, a lot of glossing over what's really going on in the hope and you know, who knows? Um I mainly because hope is awesome, right? Like like keep hope alive. Uh but we've most people have just missed how much speculation there is in housing because you look at our demographics. people that are talking about a shortage really aren't digging in to understand um what drove all of this crazy price appreciation and it was just speculation.

It was not first-time home buyers trying to get a home. I'm trying to look into seeing what K Schuler is saying now about values versus, you know, a home income because that was a big thing back in the boom. Um and pulling that data and seeing where nationwide where that looks like. I have that slide. Uh if if you if we want to do that um let me just get it up here for you, David. Yeah, no problem. Because to me, because I'm a data nerd, um I had to do this for myself. I had to pull it myself. Uh and I, you know, I encourage that because it changes, um what you're kind of, you know, how you understand the data.

So, let me just get this Okay, no problem. All All right. So, oh, and the other thing that I will say is um we basically uh are at debt to income levels in the Fanny Freddy book. Uh that same as we were late 2007 as well. Okay. So, it's you're seeing it in the debt to income as well. So, let me just share my screen. Can you see that or? No. Yep. There we go. There we go. Okay. So, this is this is just about our labor force. I'm looking for that slob for you. Uh, you know, this is we have more part-time job holders that were their primary and secondary jobs or part-time than we've we've had since this started in 1994.

Um, this these are the debt DTI levels. I was telling you about uh the Fanny May. I call that the jaws. You see how the those jaws are about to close. Um and then let's see where is my So here's uh mortgage rates, home price. Here we go. Okay, so this is a historical perspective on the left. Uh you have um that's existing uh home prices and incomes. And you can see we're at the highest level of unaffordability. Uh this series goes back to 1999. That's existing home prices. So that little ratio, that little line, uh not the bars is so the blue is going to be your household median income. And you can see that's really hasn't grown all that much, right guys? Yeah.

Yeah. And and then you see the the median home price that that's grown a lot. And then you kind of see that ratio like we are at the highest levels we've ever seen since 1999 because that's all I have from NAR. You go over to the new home price over here to the right schedule and again you see incomes and you see new home prices which have really started to come down uh new home prices and so that's why this looks a little bit better. Um and that's what's really interesting. Uh you know we just had new uh existing home prices come in $100 more than new home prices. And so, uh, when that happens, historically, it flips the next month.

Um, because it you really shouldn't have, um, I have a I think I have that chart, but that's okay. Oh, yeah. So, here, uh, new plus existing medium home price. You can see how the red is the new home median price, and you can see the blue is median for existing. Uh this this is historically new homes are always more expensive, but because of all of the buy downs and everything else, uh and and by the way, they're not even properly capturing the buy downs and the concessions in that topline price. Uh but you've got a new new home market that is completely overs supplied with highest number of inventory since 2009.

Um and nobody's buying. So uh but I can stop sharing now uh unless Yeah. Okay. No. Interesting. Yeah. Amazing. You know, we've heard things such as 17% defaults. We've heard 20. We've heard up to 30% defaults in some of these things. Um I it is nerve-wracking to see that we're kind of in a different world than we were 06, but I don't know how it's going to stop, right? And there's what $30 billion of seller finance paper created annually and that's not even discussed in any of these numbers and sometimes not even track like we said at DME. Sometimes those things are privately held and privately serviced so you couldn't even tell what's happening.

We were talking some of our our our you know colleagues in the space and some grabbing notes that haven't been paid in 10 years. Yes. Right. and handling those kind of things. Those are things are not tracked anywhere. And okay, how much is $30 billion is okay, right? And yes, and there it's a small percentage of the overall, but it's in some areas that's all there is down in certain areas. But you just add on things like demographics. You just add on the fact that wages are not growing. You just add on the fact that we are lose we layoffs and bankruptcies are increasing. And so it's not just the 30 billion, right? That's just going to be kind of a risk at the margin, but there are just so many risks at the margin.

And and they're all going to hit at the same time. And and another crazy thing I'm trying to finalize is looking with another colleague looking at the buy downs because Fanny and Freddy were doing them as well. And that's the rate buy downs where they basically would buy your rate lower. those reset materially in June. Nobody I mean July I should say nobody is tracking this but if you just look at interest rate origination uh for Fanny and Freddy and you look at okay here was the interest rate it was originated at here was the actual you know 30-year origination rate we think there might be as much as 25% of what was originated in the last couple of years were buyowns which if it was a 321 buy down that expires in July that's when they really started getting uh using these in earn earnest, which means you're going to have rate resets uh for a lot of people that aren't expecting it.

Just like we did, and I'm not saying they're arms, but very similar to kind of the ARM, but these aren't even being reported back then. You had you knew what your products you had. You knew what an arm was. You knew how it was performing. We don't even have reporting on the buy downs right now. Wow. And the the rate adjustment, what kind of adjustment are we talking? Like, are we talking half a percent or or three or 10? 2%. It could it it just depends. It could but it could it's it's not going to be immaterial. Yeah. And you know with everything else that's happening and people getting those tax increase notices like and here's what people don't understand.

If it it's your home is the only place you have to live you can live and you can't leave. That's a whole different equation than I'm an investor. I don't have a lot of skin in the game and I got to walk away. And and and I know it's hard to believe how many investors are not good actors, but I saw it during the GFC. The investors are the first to strategically default. And really, you're wealthy are the first. And that's why you can see in Pacific Palisades, they have a much higher delinquency rate uh there than they do it in Aladena, believe it or not. There was a followup question, just clarity.

Um you said that 45% of FHA borrows have student loans. Correct. And if they have any delinquency guys, they w will not be eligible for any kind of and I'm going to say that most likely without picking on the demographics, they're probably going to be the first ones to struggle with housing because the house prices they bought in the last 5 years is astronomical. Yeah. And their jobs are not supporting it and they have this, you know, want to be a family in a house. Wow. And unfortunately, I'm starting to see like it's it's just kind of depressing because I really hoped I'd never have to read another one of these hardship letters in my whole life.

Yeah. Yeah. And unfortunately, it's just it just it's like it's it's post-traumatic stress syndrome. Like you're just you're seeing it all over again and you're already seeing people do strategic kick the can stuff. What are you hearing regarding um the uh doing sale clause going on there before we go next? Where are you hearing it? I know we've heard for years and no one ever really sees doing sales and banks aren't calling them do. Are you hearing anything from that world? Well, I'm hearing from PY uh who is the director of uh FHFA, which that's the regulator over Fanny and Freddy and the FHLB.

Uh that he put a little mysterious tweet out there. He's been following me for uh several years and uh I talked often about this do on sale clause and these and uh he put a note out there. He's like, "We're looking at starting to call the loans." And then uh and that we all believe was calling, you know, executing the right under the do on sale clause. And then at the conference, we saw several people raise their hand and say that this had happened to them. And then we heard from the serer um who really isn't even big in the sub 2 space uh just had some of these in his books. So it's like and they were getting called and FHA particularly seems to do this cuz I have a I think what he was saying and I I wish I had time to talk to him but they when you record that partial claim I think they do some kind of like banie check at some like once a year or I'm sorry I'm sorry beneficiary check.

Okay, sorry where they're just running it's a quick title report. It's like like and they'll just see have any other beneficiaries been recorded on this property or things like that. And it sounded like they have that kind of process to make sure their partial claims have recorded because you know that's a second lean and uh it sounds like through that process they found uh for this serer several of these and called them. So it I can say this uh it ain't last year. Uh that's I mean this administration is not um you know they're doing things differently now. Will they have the political will when distress gets bad enough? That's a whole different story.

But right now they're shutting down a lot of these programs and they and from all signs they're looking to kind of root out the systemic fraud that's been happening out there. Wow. Very interesting. Oh, and to me what it points to, and I had this thought during the conference as well, is just um you know, again, this is where we shine, honestly. You know, we're we're really good at doing modifications and helping people in ways that banks just can't. Um, so between doing any kind of modifications and workouts, if we can get our hands on those loans and uh and then seller finance, I think there's going to be a tremendous opportunity for both of those things going forward.

I think seller finance is going to be a new mainstream wave if it's not already, which I think it is. Uh Dan Depp made a comment on Facebook uh that if they bought in the high prices back then they may be able to wrap that note as long as they bought it at a decent interest rate. They could they could wrap it and save themselves. I just don't know if Dan I I I hear you. I don't know if young people understand all that world, right? If they're living in an area that's that doesn't do raps well or common. It's mainstream to us and that's something me we've found and I think you find by coming into our world is that most people don't do or know what we do and what we know and that we see as common world but everyone else we're like a 1enter of understanding different small niche of real estate and we think it's common sense to sell our finance or rap note if you need to but the common American doesn't have clue we're talking about No.

And and and if 1% I think would even be high. I mean I I can't what's been crazy to me is all these people want to hear what I have to say because most of my career nobody wanted could I would open my mouth for one second and people are like what like go away you know. Um so because it is so complicated. I mean when you start talking about these securizations and buying loans out of the pool and I mean it's just and seller I and even the word seller financing. I mean, um, but that it was big in the 80s and I, you know, back when we had our last bout with inflation and so I think I I think to your point, David, I think it's much bigger and nobody understands this stuff.

And and and I'm helping people who have been in some type of foreclosure situation, uh, for 15 years on those notes you were talking about precisely, have not moved and, you know, an error with a POA went and did something stupid. Um, how to get out of it. So nobody I mean and these people think I'm like the second coming because I they it just feels so foreign to them, you know, they don't understand what I'm saying because most people don't we're not taught this stuff in school. We're not even taught basic finance or how to, you know, balance a checkbook anymore. I was taught that back when I went to school, but they don't teach any of that anymore.

So, right. So, and on top of all this, right, we have reverse mortgages that are probably hit a fan because for those who don't know what reverse mortgage, it's when an older person owns a house outright and they take a loan and they start adding the debt up. The baby boomer sector is going to have a lot of these and sometimes it makes sense for them to do it, but those are more loans that are going to be pile on the next five, 10 years. And they just brought FHA just brought their book in house, right? because that reverse serer failed and I don't think they're reporting those. I got to be honest.

And and yeah, that this is going to be huge. Uh because so many folks did this because they're desperate. And again, it's all on leverage. It's not that everybody's rich in the United States. They're not. It's all on leverage. And that that comes the bill comes due. I was just looking at something this morning that was talking about the the rise of helocks again. Oh yeah. And and it's interesting though because I think the difference between this time and the runup to financial crisis in 2008 was back then it was like yay free equity. Yay. And then let's go and buy a income property and and you know on credit that we got from this property.

The difference today is now they're doing it out of desperation. They're running out of money. Absolutely. They're recognizing that's where they can pull some cash from uh for now. And then what? And then what? And by the way, so here's what's even scarier because I see that home equity and it just makes me crazy, right? Um there's these these FinTechs out there offering home equity agreements, not uh lines of CR. And so none of this is being tracked. They're not. And so there there's so much lending happening out there through the non-banks and which are being funded by the way by the banks, but it's not being tracked anywhere.

And so we have no clue what actual home equity looks like because like I told you guys at the conference, the Fanny Freddy payment deferrals are not even recorded on public record. We don't know. I'm just curious because you know uh we're we bought notes back in 2010 when things are hit the bubble and all that stuff. I think I'm like most people our age. We're afraid to take helocks. We're afraid to touch our evacu, right? But the generation behind us isn't afraid of it because they don't really remember it, right? It's like, well, you have hundreds of thousand dollars in equity and you should hit it.

Well, yes, you're right. Investors say, "Listen, if you're buying a three, go do it." But a lot of people our age are afraid of it. So, I'm curious how that helock's going to be on top of the fact of student loans being delinquent. the younger generation if they are hitting it and I know most people who have that property drops in value it's going to be really crazy well and this is what people don't understand like so my whole job back in finance was watching all this degrade uh when we looked at loan to values in 2006 they look just fine credit scores look just fine like talk to me in 2010 you know that's that's but by the way we actually had real credit scores back then like this we are now in a situation that the past 2 years uh we we've been lending on completely uh incorrect and inflated information and so this could happen much faster than last time where that took you know four to five years to peak we could see this really start to accelerate right now I've started talking about all this is you know okay speed's slowing speed's increasing and in March and April speed started increasing and so there might be something that slows close it down again.

Who knows? Um, and I'll let people know when that happens, but right now things are picking up. Yeah. Yep. So, you have baby boomers busting. We see college kids who are delinquent. 45% of FHA loans are are those. And but of those, the delinquency there, they can't get modifications. We see unemployment starting to rise up. We see, again, we're not doom and gloom. We're laying out the facts and having a reaction to it. So, we're not saying in six months they're all going to go crazy. We're just saying is it doesn't look good right now. Right. And we don't know what six months they be from. Maybe something will come out and fix all of it.

Right. But the no do loans, I'm starting to see those coming back. Oh, yeah. Right. So if anyone remembers 0506 no do loans were one of the most worthless paper beside the arms and I'm curious where arms are nowadays that really affected the big shifts. Yeah, and ARM is not a huge portion of what's out there, but it's bigger than most think. And like, you know, uh Chase's jumbo book where they do a lot of I interest only and things like that that they had to pick up from SVB. Um I I can't I haven't seen their 10Q for this quarter, but it was over six% delinquent six months ago. Wow. So, you know, it's it's it's all the signs are out there if you look.

Um it's just we're not used to looking and you know we open the paper or we open our email and that's you know we're reading the headlines. We don't have time to do anything else you know but I've just made it my job to go look. So and and for those who don't know you you have a passion for this. This isn't just a a job that you have to do at W2. You really enjoy the data. You're a data person right? Um yes. And I think that people should take the data as they want. It's not gospel. It's just what we're seeing, right? And unfortunately, a lot of data that we want to get is not collectible. Um, right? Small services are not reporting as much and nor can they sometimes they have sometimes struggles.

And then you have borrowers who may be losing jobs, maybe having issues and those things are changing. And then you have the burr method which we even get into the commercial. How many people out there have been part of a syndication or some kind of big multifamily note and were planning on burring it and now three four years later they can't bur it anymore? Yeah. Yeah. 41.8% mortgage refinance rejection rate. It was 26% last year. So this is this is mass. So burr is is burr. It's gold in burr land right now. Oh my lord. Yeah. And I've talked to several multif family people and they're struggling.

They're uh they're not quite sure what they're going to do and it's it's not a great thing and the project itself, but then you've got all the people that are invested into those things and that's right. What's the repercussions of that and and how is that going to limit and curb their spending? Right. Right. Exactly. So for those who are, you know, I hear a lot of hard money loans, right? And those I don't even know if they're tracked at all. Right. It's like a big mystery to me. I don't think they are. And and I it's something I tried to chase down and I just hit brick wall after brick wall.

So I I mean I ask you guys, are they tracked? Who's tracking them? Most of them are self-serviced. Right. Exactly. Like the vast majority I would say most of the the hard money people that I talk to, they they do it in house. So definitely it's not being recorded or reported to anybody because it's they're just doing it on their own. Yeah. And we actually have a few of our on our private call on Wednesdays that doing it and they're using the mortgage office, right? That's their their choice, right? That's their option. Um, you know, I wish you and and I'll put it out there. We're in talks about, you know, like to have somewhere we can go to get this data besides all the different social media platforms.

A nice way to collect it all. And I just would be nice to see about, you know, where the interest lies at that because I think a lot of his data points has a place where people can grab it, right? Um, yeah, it's really good and and honestly, I would say come to my Substack because and even the free version like I put a ton of data in the the free portion because to be an idiot here. What is Substack? So, it's um it's a platform where you write. So, a lot of journalists have gone over like they've left mainstream media to to and they publish over on Substack and so each week I put out a really deep dive analysis on the housing market what's going on.

Um I talked about your conference and and one a couple a week or so ago and uh you can sign up for the free version. There is a paid version. Um but the free version because I am so passionate about this David as you said. Um, yeah, because I do want to say I, you know, save our young Americans from making really poor choices that could haunt them for a long time. Um, but yeah, so it's M3 Melody Substack and but sign up for the free version. I I try very hard so that if you're if you're aspirational that you will get all the clues you need in the free part to figure out what you need to know and I do that very purposefully.

Awesome. Awesome. Well, Melody, I know this has been a little bit of a headache for our guests to watch. I apologize again once you guys uh it looks like it's streaming well at the end here for the last 20 minutes or so, and we've had some nice compliments. I'm presuming it's a compliment. Um that Mel, I don't understand half the stuff you're saying. Great stuff. I need to definitely uh things I need to be consumed of and need to be aware of. So, um listen, for those who are listening, me and Nathan don't follow 100% of this. So don't feel weird. Don't be just listen to it. Listen to it over again.

It will be on the podcast YouTube and all stuff. Just understand that there's stuff going on out there. Follow Melody the link in there. You'll get her information. Just start following and listen to it and join and networking. The only reason we all connected is by networking. So this is how you get the information. And I want to make sure that we can ask Melody for any data point and say where's your source? So yeah, be sure to ask for sources when people say absolutely no it's not true or yes it is true. Right. Right. Um there is delinquency going on. There is stuff for those who believe that everything gets reported.

I'm going to tell you it's not. I don't know how many of our notes right now or what servicesers who don't report to the credit bureau for whatever reason. I know a lot of the hard monies aren't um and these reverse mortgages are coming bigger and bigger right now. There's a lot of loans that are just outside the typical note that are just not tracked. And then on top of it, the Fed FHA with the um student loans. That's scary. When is that taking effect? Is that already in effect? Well, I think it's supposed to be in effect, but that's what I'm going to hear from the servicesers because if they haven't been doing it, it will take them time to restart that engine.

Um if it's not part of the process right now. Okay. I'll keep you guys posted as soon as I know. I'll let we'll have Melody back on in a few months and next quarter and we'll uh we'll go from there. So Melody, we're going to disconnect from the live stream. Um hang on for after hours and we'll uh we'll see everyone soon. Take care everyone. Be well. Thank you so much..