RE:RE:What my spreadsheet is sayingYou clearly still don’t have a clue how the mortgage markets work. Mortgages are not consumer products. There’s no stickiness to them. If I were a mortgage borrower, do I care if I get my loan from HCG or EQB or any other players? The only thing I care about is their abilities to provide the loan and the rate. So scale and funding sources are key. If you have money to lend like HCG does, you will get market share. Don’t forget HCG turned down 70% of mortgage applications in Q3. They CHOSE to turn down those. They need to ensure they have a robust compliance sysmtem before they can originate again. Also, seems like they are expanding their commercial loan portfolio to diversify.
Bottom line: HCG is becoming a world class mortgage lender with the help of new magnagement team and Berkshire Hathaway
Tater78 wrote: In a quarter where total dollar value of homes sold dropped by 10%, you expect HCG has grown originations 260%. Who did they steal market share from?
Franchutto wrote: After averaging different scenarios and considering what was said in Q3/17 about originating approximately 30% of submitted applications and having established new guidelines for originators. I also made a monthly curve simulating originations, I guesstimated Q3/17 breakdown total originations as follow;
July 35 millions
August. 125 millions
September 225 millions
for a total of 385 millions
As for upcoming earnings, with a lineup of applicants and more than enough cash on hand it appears that the company originators/guidelines would be the main reason to slow down new originations. I averaged 2 scenarios to come up with
1.4 billion total originations Oct 365, Nov 485, Dec 606 millions
22.9 billions total loans including off balance sheet
34.5 millions net income
$0.43 eps
if correct, could have $0.10 dividend (historical 25%)
Having a hard time estimating the spread and having too much cash on hand not producing anything at the end of Q3 didn’t help entering Q4 , hopefully the levels didn’t stay high too long during the period,
Any thoughts on this are welcome, even from Silberglitch, haha.