Loan Think

This is yet another column discussing running your mortgage originations business (be it broker or banker) like it was any other business. Successful business owners don't necessarily reinvent the wheel especially when it comes to what might be termed "human resources" stuff.

The Federal Deposit Insurance Corp.is issuing "inquiry letters," followed by subpoenas, followed by lawsuits against brokers as well as the loan officers. Sometimes the FDIC skips the inquiry letter and other times it skips the subpoena and goes right to the lawsuit. How do we know?

Mortgage companies ramped up hiring in October, adding 1,500 full-time employees to their payrolls - but almost all of the new hires came from mortgage brokerage firms, according to newly released government figures.

Late this past week several advisors to the mortgage industry were saying that PNC Bank may be taking a close look at some of MetLife's mortgage divisions. Both institutions declined to comment to National Mortgage News. But one unit that PNC won't be buying is MetLife's warehouse group.

A few short years ago outstanding U.S. mortgage debt had Treasury borrowings beat $10 trillion to $9.5 trillion. But not so anymore. Uncle Sam owes $15 trillion on his tab while consumers have whittled down their mortgage debt to a mere $9.2 trillion. (The latter measurement is courtesy of NMN's Quarterly Data Report.)

This is how a Ponzi scheme collapses: the scammers running the fraud run out of suckers (participants) who stop giving them money. When the cash dries up at the lower (intake) levels there’s no way to pay the people at the top of the investment pyramid.

Now that the Fannie Mae/Freddie Mac loan limit has been whittled down to $625,500 a ton of private sector conduits have entered the market to make it easier for wealthier clients to get a jumbo mortgage. Congress is happy because the "de-risking" of the GSEs has begun.

For those who favor public sector cuts and who also don't like to read newspapers (online or print) perhaps there's a disconnect when the phrase "budget cuts" is aired. But let's get something straight: when a state or federal government talks about cutting costs, nine times out of ten it means a public worker (or private sector contractor) will lose his/her job.

I have some questions for all the owners of small mortgage origination shops: are you running your business like it is a business? Do you have the systems in place to examine what is succeeding in your business and what needs to be dropped or even eliminated? Or are you doing things by the seat of your pants, lacking the proper data to back up your decisions?

In case you missed the big news last week: PMI Mortgage Insurance has filed for bankruptcy protection. Its chances of emerging as a viable entity stand between slim and none. If you're looking for a silver lining here, it's this: its demise means more business for the nation's surviving MI firms, including United Guaranty, Genworth, Essent and the rest of the gang.