A critter, or organization, or industry, with the mouth of a Hippo and (ahem) “exit orifice” of a Canary. Used to describe the effect on a system where a large volume of inputs overwhelms other elements of the system.
With mortgage rates plumbing levels never seen before (grab our Twitter feed for real time updates), one challenge many mortgage seekers will face is that at many levels, the industry is not equipped to handle to flood of new business washing over the transom.
Across the industry, at every level, staff has been cut, and resources have been pared to survive the relative desert that has been residential lending for the past two years.
There are fewer loan officers, loan processors, appraisers, title closers/examiners, underwriters, mortgage closers, than there were the last time we saw rates at these levels. Documentation requirements are more strict, and every loan is subject to a higher level of scrutiny. There is much fallout, which consumes already scarce “processing” resources.
This, of course, translates into increased turn times for newly originated applications. And it will probably get worse. Every day rates stay at these levels the number of days that elapse between the moment an application is completed and a loan is prepared to close goes up.
Anyway, we need a term for this. We’re calling it the Hipponary effect, in that the lending industry right now has the mouth of a Hippo, and the
ass digestive system of a Canary.
Feel free to add your own in the comments.