Loan Think

Social media is a fundamentally transformative and rapidly evolving business tool for sales, marketing, communication, business development and the dissemination of information to today's consumers. What many business-to-business executives question is how social media applies to their business. They say: Maybe it’s right for companies that sell directly to consumers, but I don't see how it would apply to business-to-business transactions. How is Twitter, LinkedIn, Facebook, YouTube or a blog going to benefit my company?

Stop the presses! Interest rates are going through the roof! All the economic pundits were atwitter (and probably on Twitter) this morning after the Federal Reserve hiked its discount rate to 75 basis points from 50 bps. Keep in mind that this isn't a hike in the overnight 'Fed Funds Rate' which is still a hair above zero. However, the yield on the 10-year did rise above 3.8% early Friday and mortgage bankers can probably guess what that could signal. Then again, who knows these days? But if rates do, in fact, edge up that means mortgage servicing rights (in theory) will increase in value. Then again, value is relative when the overall delinquency rate is in the 10% range. Meanwhile, the lead story in The Washington Post this morning says a commercial real estate 'crisis' could smack the nation's capital. Do tell? A few weeks back the Post reported that the commercial RE market in Washington was improving. This time around it quoted stats from CoStar Group of Bethesda, which says the market is going south fast. Hey, isn't CoStar the firm that practically stole MBA's D.C. headquarters recently -- paying just 40% of its original value? It is. Funny, that wasn't mentioned in the Post story. Just a bunch of negative numbers on the market. Of course, all this negativity could create more buying (stealing) opportunities for CoStar. Where's Bob Woodward and Carl Bernstein when you need them?

We have all heard this statement: If I just knew then what I know now...blah, blah, blah.

THIS JUST IN: A storm could be brewing involving so-called independent contractors that are working as due diligence underwriters in the residential mortgage industry. What am I getting at? Here are the basics: some review firms are refusing to pay their contractors via a W-2. Not all firms are doing this, mind you, and we're told one of the "good guys" is Clayton Holdings. But one contractor believes due diligence firms are trying to avoid using W-2s. He writes that such firms are "putting the burden on the contract underwriters. They're also saving quite a bit of money and are able to go back to these investment banks and insurers and offer them below-market-rate fees for their services." That puts these contractors in debt to the Internal Revenue Service "because we can't find anyone who will pay via W-2 status like it used to be when we were in the height of the subprime boom." Stay tuned...

With GMAC's servicing/subservicing chief, Tony Renzi, recently thrown overboard by management, questions are popping up (once again) about the future of GMAC/Residential Capital Corp. One theory has all its mortgage assets being shifted over to its depository affiliate, AllyBank, which is spending mucho bucks advertising its CD rates on television and radio. (The plan could be to eventually sell AllyBank when the market comes back, we're told.) Banks that compete against AllyBank for deposits are none-too-pleased that some of Uncle Sam's $15 billion investment in the company is going toward marketing, but then again, some of those complainers (or most of them) likely got TARP money. It's a crazy mixed up world, indeed...

The average purchase price was $224,000 for a repeat buyer as compared to $156,000 for first-time buyers. Based on the sales price averages, real estate commission income would be over 30% more when you work with repeat buyers (not to mention the listing side of the deal.)

John Kanas, the former CEO of North Fork Bank of Long Island, knows a bit about bank failures. In 2004 North Fork bought GreenPoint Financial, a huge player in the alt-A business, and then a few years later flipped the combined franchise to Capital One. He, smartly, got out of the business while the getting-was-good. A year ago he re-entered with private equity money to reap his rewards by purchasing the failed BankUnited of Florida whose fortunes were sunk by residential payment option ARMs. There's nothing wrong with riding the cycles of financial services. And based on his maneuvers in regard to GreenPoint-Northfork-Capital One, it appears that Mr. Kanas is one of the best market timers around in banking/mortgages. When he says something, people listen. He told CNBC on Wednesday that he is standing by his prediction that a thousand banks will fail in the next year or two. The FDIC's internal projection is for at least 400 banks to fail this year...

For the next few weeks, Broker Universe will feature some of our favorite Sue Haviland columns from the past year.As a reverse mortgage specialist, you probably have a marketing plan and strategy that you can rely on that provides predictable results. If not, we need to talk! I'm sure you use a mix of tools that position you as the local expert and that you can track the effectiveness of each.

FACTS

Essent Guaranty, a new start-up mortgage insurance company, has yet to write its first MI policy but it should be any week now, we're told. Essent is the brainchild of Mark Casale, who resigned as president of Radian Guaranty in October 2007. The new company is based in Radner, Pa. In other MI news, The PMI Group reported another huge quarterly loss ($228 million), this time for the period ending December 31. Its stock continues to trade for just over $2 a share...