So, you're thinking about buying a home. You haven't won the lottery, so you're going to use a mortgage. I hope you've been saving your pennies - 5 million of them. If regulators in Washington have their way, that's what it's going to take to buy an average-priced home in Austin.
Last summer, Congress passed a sweeping overhaul of the financial system called the Dodd-Frank bill. That bill created a new class of mortgage loans called "qualified residential mortgages" (QRMs). This class is important because the bill makes it harder for mortgage lenders to securitize any loan that is not a QRM, and securitization is the grease that makes the mortgage market work and keeps interest rates low.
The problem is the bill left it to regulators to define a QRM, and as regulators seem apt to do, they have made a mess of things. The proposed definition for QRM is a 20% down payment with other limiting restrictions. In Austin, to buy a $263,700 average-priced home, that means you would need $52,740 for the down payment.
Senators inserted the QRM language into Dodd-Frank in an effort to encourage less risky lending. But as with a lot of government meddling, the unintended consequences may be horrendous. Many industry pundits expect the QRM to become the new "conforming" mortgage, the loan product offering the lowest interest rates. Non-QRM loans are likely to have interest rates as much as 2% higher.
The real estate industry and consumer groups are united against this proposed definition. The Community Mortgage Banking Project released a report in March that analyzed 33 million home loans written between 2002 and 2008. The results showed higher down payments had a very small impact on mortgage defaults. Doubling the down payment from 5% to 10% only reduced the default rate by 0.2% to 0.3%, and increasing the down payment requirement to 20% would eliminate between 27% and 40% of potential homebuyers from eligibility for a loan.
Consumer groups point out that middle-class and minority borrowers would feel the greatest impact from the proposed definition. A recent study showed it would take the average consumer more than a decade to save the required 20% down payment in most parts of the country. Homebuyers unable to afford the minimum down payment would be considered high risk even if they have an otherwise stellar credit history.
The senators responsible for QRM recently wrote regulators advising them that they intentionally did NOT include a down payment requirement in the definition and they never intended the definition to be so strict. More than 160 House lawmakers also wrote to regulators stating that the "overly burdensome dictate could threaten a full-fledged economic recovery."
Regulators have responded to all this pressure by extending the comment period for the definition to Aug 1st. It is not clear whether regulators are having second thoughts, but at least this gives lawmakers, consumer group, industry representatives, and YOU more time to encourage them to develop a more reasonable definition.
If you have a mortgage question, please leave a comment below, and I'll address it in an upcoming column.
The world of John Wick sure has changed a lot from its relatively small beginnings in 2014. Back then, Wick (Keanu Reeves) was just a former hitman out for revenge on the people who killed his dog. Now it’s full-blown franchise with a story that spans continents, necessitating that each subsequent sequel try to out-do the previous film.
John Wick: Chapter 4 is the biggest movie in the series yet, clocking in at just shy of three hours. Stunt coordinator-turned-director Chad Stahelski does his best to fill that massive running time with as much brutality and derring-do as possible. Wick, having long ago run afoul of the powers-that-be that lead the hitman syndicate, The High Table, is still on the lam, with only a few loyal friends willing to help him.
One of the leaders of The High Table, the Marquis (Bill Skarsgård), is on mission to root out Wick once and for all, systemically shutting down versions of The Continental, hotels that serve as safe houses for assassins like Wick. With the Marquis and his henchmen constantly on his tail, Wick has no choice but to do what he does best – take out as many people as he can before they get to him first.
The film, written by Shay Hatten, Michael Finch, and Derek Kolstad, is not quite a non-stop thrill ride, but it’s as close as you can get when you decide to make a film this long. The complexity of the machinations of The High Table makes it almost impossible to keep up with the actual story of the film, but when they get down to the business of fighting, none of that really matters.
There are multiple extended sequences that become an orgy of violence, but the way they’re staged by Stahelski and his team make them eminently engaging. John Wick: Chapter 3 suffered from repetitiveness, and while the same could be said here to a degree, it feels fresher because of the sheer number of combatants and constantly changing scenery.
The fight scenes are magnificently over-the-top, but in this series, that’s to be expected. Where the filmmakers step up this time around is in the cinematography, with bravura shots filling the screen. The camera is almost constantly on the move, swooping in, out, and above the action. One especially memorable sequence even has the camera going above walls to follow the fighting.
While the majority of the story is treated in a deadly serious manner, the filmmakers aren’t afraid to add in some goofy elements. We’ve always had to take Wick’s ability to survive (mostly) unscathed with a huge grain of salt, but this film turns that idea up to 11. At certain points, there’s a kind of a Wile E. Coyote tone to Wick’s escapes, especially a late sequence involving (many) stairs.
There’s not much do the character of John Wick other than his preternatural ability to kill, and Reeves continues to play him perfectly, expressing himself more in gunshots and punches than words. In addition to returning favorites like Ian McShane, Lance Reddick, and Laurence Fishburne, this film sees great supporting turns by Skarsgård, Donnie Yen, and Shamier Anderson.
John Wick: Chapter 4 did not need to be nearly as long as it is, but in this case, the excess is the point. Much of it is ridiculous and ridiculously violent, but it’s also highly entertaining, which is all you can hope for from this type of film.
---
John Wick: Chapter 4 opens in theaters on March 24.
Photo by Murray Close/Lionsgate
Keanu Reeves in John Wick: Chapter 4.
