Loan Think

Editor's note: Today we are rerunning one of favorite Joel Pate columns. We hope you enjoy it.What were you doing in 1999? Do you remember?

THIS JUST IN: That New York hedge fund that's looking to buy a well regarded mortgage brokerage shop in the greater NYC metro area is getting closer to a deal. But the signing of the documents and money changing hands could be two months off. One key to the deal: making sure this lender (which will become a banker) has strong warehouse relationships...

Those wild and whacky Republicans! They want Uncle Sam to make (legally) explicit its guarantee of Fannie Mae and Freddie Mac's debt obligations and put in the budget. If they're successful that would add $5 trillion to the current debt load of $12 trillion, giving our great nation a total "bill" of $17 trillion. Does it really matter if it's on or off balance sheet? Well, you can argue this: a home owner calls up his mortgage company and says, "I know I owe you $300,000 on my loan but I just want you to know I owe another guy $150,000 but it's okay because the debt is backed by a house that's worth at least the same amount. Trust me." Maybe if I had more time I could come up with a better analogy. Sorry about that. And as most you know by now: the White House won't be unveiling its master plan for Fannie and Freddie until next year. I've written in past columns that it wasn't going to happen and now I've been proved right. But I'm not boasting. I don't know of anyone in the Washington (or the industry) who thought that Obama would have a plan this year...

If you want your clients to remember you long after the closing is over, consider sending them a closing booklet within 45 days.

The nation's remaining loan brokers continue to grumble about how they're being treated by certain wholesalers. One loan officer wrote to me, saying she applied to Wells Fargo to become a 'new broker' for the firm and was basically told that unless she could deliver a minimum of 10 loans a month that she didn't stand a chance. "So if they are really wanting to do business with brokers it appears they want all of the business going to them or nothing at all." Meanwhile, Freddie Mac released its fourth quarter results Wednesday morning. It lost a ton of dough -- which was not unexpected -- but apparently its accountants have been making some boo-boos when it comes to calculating loss severity on its holdings...

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.I was recently speaking with an experienced reverse mortgage originator who has a bit more time on her hands than she would like right now. She asked what she could do to keep her activity level up, set her apart, and above all, not spend a lot of cash doing it.

AND NOW FOR THE TOP FIVE MORTGAGE FRAUD STATES AND I BET YOU CAN GUESS FOUR OF THE FIVE

Suddenly, it's deals, deals, deals everywhere in nonperforming land. Of course, it's not like sellers are actively sending out press releases on what they're auctioning but activity has definitely picked up over the past month, we're told by bidders -- and maybe that's a sign that housing has really bottomed. However, most of what is being offered involves pools of $100 million or less -- usually much smaller than that. There are no 'mega' sales out there though sources say GMAC is trying to unload some of its massive holdings of NPLs in privately negotiated transactions. Meanwhile, the new Case-Shiller home price indices came out today and the message boils down to this: home prices are firming up but are way off their highs of a few years ago. Here's a sobering fact: homes today cost the same as they did in the second quarter of 2003. Ouch. That's a lot of hot air (equity, that is) disappearing into the ether...

A survey conducted by Opinion Research Corp. has confirmed what many people have a sense of anecdotally - that two groups, young consumers and highly educated consumers, state online information sources are their primary influence for their buying decisions when compared with the rest of the population.

In Monday's National Mortgage News (the print version) we have a story concerning "counterparty risk" and servicing sales. Since the story posted, one advisor told me, "There is no question that the only way you can sell servicing with a GSE guaranty is if the GSE agrees to waive the reps and warrants. Why would you buy a pool knowing that if the originator is either already gone or may fail in the future, that the servicer is now responsible for the buybacks?" Also, in my weekend column, I mentioned Phoenix Capital. A handful of readers wrote to tell me that the Denver-based advisory firm is alive and well and doing deals. One West Coast mortgage executive noted: "We just used Phoenix to broker some servicing rights for us"...