Loan Think

If you're wondering why the sale of nonperforming loans is picking up steam this year the answer is quite simple: firms that were smart enough to buy last year (some at dirt cheap prices), want to book their gains while they can. "If you can make a return of 10% by selling right now, why not do it?" one investor told me. In the nonperforming (NPL) loan space we hear that Goldman Sachs & Co. recently bought a few NPL pools and that a unit of Cerberus Capital is eyeing deals. Cerberus, of course, still owns part of GMAC Financial/Ally Financial, which in turn controls Residential Capital Corporation…

Some of the best ideas come from "outside" the mortgage industry-by reading other publications or just simply brainstorm with other business owners.

The warehouse lending picture has improved dramatically over the past 12 months, although there is nothing "easy" about obtaining a new line. For the banks that make credit available to nonbanks the profit margins are still very handsome, or so I'm told. But has warehouse credit to jumbo providers improved during this time? I'm told the answer to that question is no, or very little. If you have any insight on the jumbo warehouse picture, drop me an email. Meanwhile, the new home sales figures are out and April looked like a banner month. Of course, (as we all know) the 14.8% jump in activity is being given to the $8,000 tax credit (and another 'move up' credit) expiring and sales being artifically added to April. My guess is that May and June will be strong months too. But what if the employment picture really does improve and more workers decide to take the plunge because rates are low and homes cheaper than they've been for 10 years? It's something to think about…

Have you ever noticed that as salespeople we sometimes just can't get out of our own way? I was on a call with my coaching group (if you don't have one, consider joining one, your productivity will certainly increase) and the topic of "closing the senior customer" came up. One person in the group lamented that many of his clients recently were talking to two and three other companies (to "compare") before making a decision. This comment, as you can imagine sparked a lively discussion. Why is it that we often don't close the deal when the senior is clearly ready to sign?

INVESTORS SUE MORTGAGES LTD. OF ARIZONA, ITS LAWYERS, ACCOUNTANTS AS WELL AS OTHERS FOR $900 MILLION

Guess who's back in wholesale? As we hinted on Friday a top ten lender is re-entering the space. Its name is Residential Capital Corp., which also goes by the trade name GMAC Mortgage. Details are in the paper edition of National Mortgage News with a version hitting our website shortly. Meanwhile, should originators start staffing up for a refinancing boom or boomlet? The yield on the 10-year Treasury is ready to break through its 52-week low and mortgage rates are sure to follow. Here's an interesting question to ponder: what's a safer investment today: buying Fannie Mae and Freddie Mac MBS or the debt of nations like Greece, Spain and Portugal? One investment yields more than the other. Well, do you feel lucky today?

Ethics statements can serve a purpose in the marketing of one's business. They tell the consumer the values and standards they can hold the sales person to. It helps to give a comfort level.Business ethics expert Christopher Bauer said he hears from people who read his Weekly Ethics Thought e-mails who said they do not have the authority to create a values statement for their entire company. However, he added if even someone can't write such a manifesto for their firm, they are able to do one for their department, division or just themselves."Remember, values statements aren't simply some kind of 'feel-good' exercise, they are a way to both focus and drive your most important priorities in leadership, management, customer-service and branding. Done correctly, a well-written values statement will increase your focus, efficiency, and effectiveness across the board. Surely you will benefit personally from one or more of those. In fact, can you afford not to?"I know that some of you will balk at writing a values statement for yourself or your department because your values are so clear in your mind. Might there still be a reason to write out a values statement, though? Yes! There are many, actually, but among the more important are the following three:"Like with almost everything else, there is simply a difference between having something in mind and writing it down. Writing, in itself, often serves to both refine and clarify your thoughts as well as acting like something of a contract. We are simply more prone to follow through on things we have written down."A values statement written in the proper way will help you build your achievement in addition to building your business because of the sharper focus it will help you create. Would it ever hurt to increase your personal achievement or business' success? Probably not, I'm guessing."Perhaps the value of your values statement won't be lost on others around you and that may give you a shot at convincing your department, division, or entire organization of the benefit of writing one for the whole group. Your increased success may help inspire them to follow the same path as well."Lest it need to be said, remember that once written, a values statement left unapplied will do you no good and poorly written one may even cause harm. Take the time needed to do it right and, if needed, get consultation or training to be sure that you get your values statement written correctly. There is too much at stake to write one that could set you back rather than rapidly moving you forward as it should," Mr. Bauer said.Information on Bauer Ethics Seminars is available at http://www.bauerethicsseminars.com.

Sooner or later, they all come back to the mortgage industry. This week's "hey, I'm back in the business" award goes to The Kislak Organization of Florida. Mortgage veterans of yesteryear may recall Kislak Mortgage was a well regarded nonbank lender back in the 1980s before it exited the industry through a sale. The Kislak family and organization remained in real estate after the mortgage unit was sold but not as a residential lender. But now the firm said it plans to establish "brick and mortar" lending offices to service residential borrowers in Florida and the Southeast. For complete details see the National Mortgage News website later today. Meanwhile, in case you missed last week's delinquency numbers from the Mortgage Bankers Association, I would like to point out that the second "safest" mortgage out there today is the VA loan. Delinquencies on the product were 7.96% at March 31, down from a high of 8.21% a year ago. The safest loan (for lender/servicers) is (no surprise here) the prime FRM. The worst loan? Don't faint but it's subprime ARMs which have delinquencies just north of 29%...

The loan buyback plague continued on unabated in the first quarter. Leading the pack in repurchases was the nation's second largest originator, Bank of America with $4.4 billion. It's almost guaranteed that 75% of those repurchases (or more) are "legacy" loans inherited by the bank when it bought Countrywide Financial Corp. almost two years ago. (I would venture that quite a few are payment option ARMs.) JPMorgan Chase was a somewhat distant second with $2.4 billion. The chief question on the industry's collective mind is this: have buybacks crested or is the worst yet to come? Meanwhile, we understand that concern over buybacks derailed a mortgage M&A deal. For details see the National Mortgage News website later today...

Last week I put out a challenge to all of the readers. There were so many responses. But one gentleman had developed and articulated a plan that won the $100 award.