Capital Markets

Jessie Houschauser came to speak on capital markets and the rise and fall of saving and loans. He told us about his experience in the business.  Starting out as an engineer that was not so good in school but knew he could work with number, he graduated from college and began his career in banking.  Here he learned how mortgages and the loan business really operated.  Back in the 70's and 80's savings and loans would compete by offering several incentives.  Jessie told us how the lobby at the baks were usually filled with jewelry and toasters, he often acted as a sales man rather than a banker.  Jessie eventually got to travel on the road with his work and met some developers who were working at a home on his assignment.  It wasn't long before he put his knowledge and experience gained from working at the bank into the game of real estate development.  I really appreciated Jessie story because he worked hard and learned from all his experiences.  Being involved with different jobs and experiences led Jessie to realize what he could accomplish in Real Estate.

Capital markets has made its way through some changes over the years.  Back in the day there were only two types of loans home loans and income property loans.  Jessie gave us the history from 1972 to now which started with loans typically coming from the savings and loans and rarely banks.  The competition was like the stock market inside the savings and loans he worked at.  After the war the economy went through a major crisis "similar to the one we are in today" and there was inflation, deficit spending to fund the effects of the war caused savings and loans to crash in the late 70's. (1978) After years of intervention by the government and on the rise insurance back players, the housing market began to get back on track around 1986.  This gave way to mortgages becoming the new way of doing business.  Mortgage lenders originated the loans, service and backed them, home buyers in the market flocked to the low down payments and at the time not so bad interest rates.  But of course with time and political influence there was another crash and the way of doing business switched.  This new was came about when Wall Street stuck there nose into the pot.  Fannie Mae and Freddie Mac came and started to buy up all the loans because they knew the market.  Being able to predict the market gave them an advantage on when to buy/ invest in property.  Today there have been several other companies popping up and cheating the system out of millions.  Being able to hear this from Jessie's perspective is something I can fully relate to and has encouraged me to learn things about politics and the stock market.