Justin Stoddart
Welcome back to The Think Bigger Real Estate Show. I am your host Justin Stoddart, here during uncertain times to give you some certainty, I have with me a very good friend who's going to talk about what you should be seen as a real estate agent right now. Let me just begin, before I introduce this amazing friend, gentlemen, let me describe to you something very important about the purpose why I do this show. And it's really even, especially in uncertain times is to help you recognize your own potential to wake you up to that potential, and then to inspire you and help you to live in pursuit of that potential. That is my mission. That's why this show exists. And I'm thrilled to have with me today, someone who's not only a friend, but someone who's who's a very trusted mortgage advisor, this industry, David Chandler, David, you've been in business for 15 years. You've owned businesses, you've been a business consultant, you've owned marketing companies, you understand business as good as any, thank you so much for coming on the show today to share your wisdom.
David Chandler
I appreciate it. Thanks for having me, man. And I appreciate you. You know, I don't I don't watch the show every single time you're doing it, but you know, I think every guest should should give a shout out and a pat on the back to you for what you're doing in our industry, for realtors for title companies for mortgage lenders, you are a valued voice in the Portland market for sure. And I think soon to be probably nationally. So anyway, I appreciate you my friend.
Justin Stoddart
Yeah, you bet. You bet. I appreciate that as well. All right. Let's get into this. First of all, right now, you know, there's plenty of news telling us what's not going well, right? You can turn any time of day and we hear more illnesses. We see more economic halts, we hear more deaths. Like we're not gonna talk about that today. Because the reality is billions of people right now. Billions are not infected with Covid. You know, like most people are going about their life probably actually having a better quality of life than maybe they've had in a long time. Right. So there's tons going well, and I'm a firm believer, as I know you are as well, that what you focus on expands. And yes. If you look around at all the opportunities, if you look around about everything that's going well, you'll start to realize, hey, the sky is not falling. Yes, we need to adapt. Yes, there are some people going through some hard times. However, a lot of that is because people are buying into the media and causing this herd like frenzy. Yes, we need to take precautions. Yes, yes, yes. And yes, we need to be safe. And yes, we need to pray for those that are that are that are suffering. But I'm a firm believer that a lot of the suffering that's going on is unnecessary. Would you agree with that?
David Chandler
Ah, I think unnecessary, necessary. I think it really comes down to a matter of perspective. And do we appreciate the fact that we still live in the greatest country on earth? Do we appreciate that the inconveniences that have been thrust upon us to a certain extent, not have our own doing, still present us with some opportunities, whether it's time to reconnect with family, whether it's time to get some yard work done, be out in nature? You know, there's, it really just comes down to, again, like you said, what you focus on is what expands. We didn't ask for this. But can we find things to take out of it that we can appreciate and learn from and grow from? I know that in our industry, I can tell you that this will force innovation, it will force change. There were already I think, at the end of this quarter, you know, Finance of America. You know, we're going to push the button on E-signing for everything except the things that have to be wet signed. So that when you come into the closing, the majority of everything's already been signed with the exception of the things that probably have to be recorded with the county and, and a few other things. So will this industry or business interruption accelerate those things? Will that force realtors to look at innovation in technology, doing Facebook live videos or video presentations, or things that maybe people have resisted that now go, you know, I think that's gonna have to be a part of my business moving forward. And the thing I was afraid of doing now is not as intimidating as it was maybe a month ago. So I think if we look at this as an opportunity to grow and expand and push ourselves out of our comfort zones, even though we're probably all sitting at home in our pajamas right now. You know, it's a good opportunity.
Justin Stoddart
Yeah. Great stuff, man. It's a great perspective. So let's talk about right now, when it comes to the real estate industry. Let's start off by, before we get into and I know this is why a lot of people are tuning in, is to hear like what you should be saying to buyers, what you should be saying to sellers. Before we go there, I want you to talk to us a little bit about what's going well, right now I know we talked about rates and the vericut, verification of employment to appraisals. Talk to us a little bit about kind of what you're seeing out there that's actually going really well.
Unknown Speaker
Let me talk to you again, I'm going to cover touch on the bad stuff and get to the good stuff really quickly. So obviously, this month has been a huge disruption. And a month ago, you know, you couldn't open up Facebook without seeing a realtor or a mortgage lender, just screaming about now's the time to buy the rates to the best that they've ever been and and all that was kind of it was was really true. And then what you saw is lenders who are just we don't have the capacity. You know, in America, there's 11 trillion dollars worth of mortgages, any given year, about 2 trillion of those. We the industry does about $2 trillion in mortgages, about a million in purchase million and refi. In the month of February, there is about $2 trillion in applications, you're trying to shove a year's worth of a business into a month. So you saw rates go up, and people thought, Oh, it's a capacity issue. And then, two weeks ago, the stock market kind of craters, and that forced people who had bought stocks, institutional investors, not individuals, like you and I, that when the stock market craters, all these institutional investors who have bought stock on margin, meaning they've borrowed half the money to buy the stock, have to meet a margin call, which means they have to raise capital. So they dump all these mortgage backed securities onto the market to raise cash to pay their margin call because they don't want to sell the stock at not a 50% loss, a 75% loss if they bought it on margin. So now all of a sudden, there's excess supply of not enough demand and rates go way up. And so this thing that we experienced a couple weeks before now it doesn't exist. Well, the Fed comes in a week ago and says, Hey, we're going to backstop this and we're gonna or the stimulus package. But for a stimulus package to work, you have to raise money. Well, how do you raise money? You know, you have to sell treasury bills and mortgage backed securities. And now all of a sudden there's excess more excess supply, the market didn't react well. Interest rates last week are the most volatile I've ever seen it in 15 years. I mean, day swings of 100 to 200 basis points. So that brings us to today. So this is a two week period of time and on Sunday, so here's the good. The Fed comes out and says, kind of unlimited QE, qualitative, quantitative easing, and basically says we're just going to not be a seller of mortgage backed securities now. We're going to buy them and so instead selling them and letting them come off of our balance sheet, the ones that we've bought i...
