Loan Think

In attendance today at the New Jersey Association of Mortgage Brokers show in Atlantic City is a representative of LendAmerica who is probably getting a lot of questions about yesterday's events. He's manning a booth in the trade show. (See the National Mortgage News website for an update on the LendAmerica saga.) Anyway, we're talking to all types of sources in the industry about the company, its history and current reputation. Needless to say, it's certainly turning out to be an interesting story. One fact: its corporate headquarters is out in Melville, Long Island. The building once served as HQ for American Home Mortgage, a now-defunct alt-A and prime lender. We understand former AmHome chief Michael Strauss is looking to get back into the business. Hey, but isn't everyone these days?..

The two most recent articles have been all about how to control your prospects experience so you can close more loans. Let's continue that idea here with what happens when a customer tries to contact you.

Who exactly are the firms bidding on delinquent second liens these days? Answer: it's not exactly your traditional players in mortgage finance. Brokers who work the market note that it's what they call "collection agency types," firms that do not care -- in the least -- about the consumer. These firms have a mission in life: pay as little as they can for a debt and collect as much as humanly possible. "These are different animals entirely," said one investment banker. Most delinquent second lien portfolios sell for pennies on the dollar -- some for less than a penny on the dollar...

Well friends, it's nearly the end of October. The leaves are falling; the weather has begun to change. This signals an important time of the year for me, planning for 2010.

DELIBERATELY ALLOWING THE HOME TO GO INTO FORECLOSURE AND WHY SOME PEOPLE DO IT

Some say the mortgage industry lost its way. Greed and the need for short-term profit was too much to pass up. Lenders took on too much risk. But why? And more importantly, how can these practices be changed so they don’t occur again? It comes down to standards.

We understand there are plenty of willing sellers of mortgage servicing rights these days but mortgage bankers will not unload their receivables because the "bid/ask" is too wide. In other words: the prices being offered are so underwhelming that mortgage bankers would rather hold onto what they have rather than sell at a possible loss. However, now that we're in the fourth quarter some deals could get done. Meanwhile former Treasury Department Assistant Secretary Neel Kashkari was on CNBC this morning discussing TARP and the $700 billion bailout of our credit markets. He hinted that without the money, the U.S. unemployment rate would be much worse than today's 9.8% figure but declined to speculate on whether it might be close to the Depression-era rate of 25%. He admitted that the government "underestimated" the length and depth of the crisis but one of Treasury's biggest problems was explaining this "complicated" mess to members of Congress. In other words, our federally elected officials are intellectually challenged...

In a recent Weekly Ethics Thought, Christopher Bauer has suggested taking a look at four books that aren't about ethics. But each has something important to say, about ethics.

I recently attended the 96th Annual Mortgage Bankers Convention in San Diego and had the opportunity to speak with many vendors and lenders. We discussed technology’s role in successfully navigating the mortgage industry. Many discussions revolved around how technology can assist with compliance, new rules and regulations, fraud and valuation. They also included loan modifications, HVCC, appraisal independence, the new GFE and potential M&A activity to name a few. Lenders and vendors are embracing technology to streamline their operations while dealing with many of the challenges listed above.

You would think that after seeing MGIC post a $518 million loss in the third quarter that stock analysts wouldn't be fawning all over the nation's largest MI firm -- but think again. In a new report, FBR Research says it is maintaining its "outperform" rating on the company. FBR says MGIC has a tangible book value of at least $13.81. On Monday the stock was trading for about $6.20, down slightly on the day. According to the Quarterly Data Report, MGIC is the nation's largest MI in terms of policies in force ($220 billion) and new business written. FBR says MGIC may be over over-reserving for losses...