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Marc Rubinstein

Mortgage Lenders Timed the Market Perfectly

Home-loan providers sold at the top. Their shareholders are counting the losses.

Is there anyone left to refinance?

Is there anyone left to refinance?

Photographer: Bloomberg/Bloomberg

When people look back on the market euphoria of 2021, there’s plenty to pick over: Meme stocks, SPACs, digital coins — all of them capture the zeitgeist. One candidate for poster-child of the era, though, can be easily overlooked amid all the exciting new financial contraptions: the otherwise-staid mortgage sector. Mortgage stocks avoided the headlines, but they reflect no less of the hype.

Up until 2020, there weren’t many mortgage stocks listed on US exchanges. The last publicly traded standalone mortgage company of size was Countrywide Financial Corp., which was taken over by Bank of America Corp. in July 2008 amid mounting losses as the global financial crisis neared its climax. After that, mortgages were handled mostly by the big banks.