Loan Think

Early next week Ally Financial will release its fourth quarter results and chances are the government owned mega bank will post some decent results in its mortgage division. What are we basing this prediction on? Well, first off, Residential Capital Corp. (the mortgage unit) is a top ranked correspondent buyer of home mortgages, a sector in which profit margins have been particularly strong.

It used to be that trade groups were the "optimistic" ones, always putting a nice spin on the numbers. (Remember NAR economist David Lereah?) But the Mortgage Bankers Association has seen the future of the business and the next two years are looking a bit dicey. In a new forecast MBA projects $966 billion in total industry production this year and $976 billion next year.

One of the things I enjoy most is reading books on sales and influence (also known as persuasion). It may sound strange to you at first. But stop and think about it. Isn’t everything we do everyday involved in persuasion and trying to convince someone to do what you want?

Ken Lewis, the former Bank of America chief whose brilliant idea it was to buy Countrywide Financial Corp. is set for life. He's out of the banking industry (thanks to the Countrywide deal) but he has plenty of money to secure a comfortable retirement. But then there's his legacy to consider.

Those of us of a certain age, as they say, remember Bobby McFerrin's song "Don't Worry, Be Happy." And while that might be a personal philosophy on how one should live, to many it doesn't make sense as a business strategy.

Texas Congressman Randy Neugebauer believes that most loan modifications are a waste of time and should be halted now. How does the conservative congressman from Texas feel about private sector mods?

The U.S. Department of the Treasury ("Treasury") gives notice of the establishment of a Privacy Act System of Records primarily for the benefit of the new Consumer Financial Protection Bureau which will become active July 21. Comments are being sought until Feb. 9. This new system of keeping records will also become effective Feb. 9.

THIS JUST IN: April 1 is getting closer and mortgage brokers – and their trade reps -- are getting desperate, urging the Federal Reserve Board to delay the effective date of its LO compensation rule. The common compliant of the National Association of Mortgage Brokers and Mortgage Bankers Association is this: the Fed needs to provide written guidance on key implementation issues

Has the market for nonperforming loans peaked? Not really, but the complaints continue to roll in that the big banks are hoarding their NPLs (thanks to accounting changes made last year that make such a move beneficial) and when they do, in fact, offer their crap it's at unrealistic prices.

Former Texas Congressman Dick Armey has come up with a whole list of ways to balance the federal budget, including eliminating a few cabinet agencies, chief among them the Department of Housing and Urban Development. (His suggestions were published this week in an op-ed piece in The Wall Street Journal.)