Loan Think

The other day I was in a real estate office watching a fellow loan officer taking a loan application. The good news is this loan officer was smart enough to take the application in the best place possible to take one, right in the Realtors office.

What's the "right" employee-to-loan ratio for servicing firms that are trying to slog through a portfolio of non-performing or "high touch" mortgages? It all depends on who you ask. One west coast investor I know said his ratio is 1:25. Some firms consider 1:100 sufficient while others think 1:50 is fine. The ratio also depends on just how bad your mortgages are. Any thoughts on the ratio, drop me a line at: Paul.Muolo@SourceMedia.com. Meanwhile, with all this talk of the White House cracking down on executive pay there's a fear the executive branch might even try to clip Realtor compensation. One reader wrote to me saying, "I heard a group of Realtors expressing concern their commissions may also be regulated if the government is successful in regulating mortgage brokers, bankers and other financial providers." My take on this? Answer: I highly doubt it. The National Association of Realtors has a powerful lobby…

I wanted to take the opportunity to talk about the upcoming Memorial Day holiday. The holiday commemorates those who died in military service to their country.

No one has to tell a small business owner that right now is not the best of times. A recent survey conducted for Employers Holdings Inc., a Reno, Nev.-based workers' compensation insurance company finds that 65% of the small business decision makers who responded said worries about their business are keeping them awake at night.They worry most about the economy, growing and maintaining their business, meeting operating expenses and their business closing.Over 70% expect their revenues to stagnate or decline this year while eight in 10 expect to cut costs in some way and 42% expect to eliminate or cut back expenses.But the results of a survey of consumers conducted for Ad-ology Research, Westerville, Ohio, may contribute more to small business owners' sleepless nights.Just fewer than half the respondents believe that a lack of advertising by a retail store, bank or auto dealership during a recession is an indication that the business must be struggling. On the other hand a vast majority perceive businesses that continue to advertise as being competitive or committed to doing business."It is critical to advertise in the current economic climate, to maintain long-term positive consumer perception of your brand. Advertising not only assures consumers of a business' reliability in a soft economy, but it can influence where and what they buy, especially when the ads address concerns about value," said C. Lee Smith, president and chief executive.Meanwhile, a business performance expert said that businesses of all sizes, instead of hunkering down, preserving resources and cutting back, must innovate their way to long-term success, as did a number of firms during the Great Depression.Linda Henman, president of Henman Performance Group, St. Louis, suggested small and large business concentrate on the same things - the evolving market, new ways to help their customers, investment in themselves, more visibility, and added value.She recommended finding ways for customers to work with you more easily.This is the time for innovation, not adherence to the status quo - particularly if that involves sunk costs. "Just because you've always done a certain thing and have perhaps spent an inordinate amount of money on it doesn't mean it's still the right thing to do. Throwing good money after bad never makes sense-makes even less now. Ask yourself, 'If this weren't the status quo, would we still do it?'" Ms. Henman asked.

A REMINDER TO CREDITORS THAT THE NEW TILA PREDISCLOSURE GOES INTO EFFECT ON JULY 30, 2009

What if you could experience the power of the Internet without driving around looking for Wi-Fi access from the local coffee shop, or having the expense and limitations of using cellular modems? What if you could eliminate those outrageously overpriced Wi-Fi fees from hotels and convention centers? Gone would be the days of paying ridiculous Internet fees for one of your employees to have Internet access at your trade show booth. What if you had a personal Wi-Fi cloud that followed you anywhere that your active lifestyle took you?

According to a report in The Orange County Register, servicers are seizing fewer homes along Orange County's coast than inland, but they are taking longer to find buyers for those foreclosures. The newspaper quotes a new report by DataQuick, plus interviews it conducted with local real estate experts. Meanwhile, the nation's unemployment rate will be key to forecasting future home foreclosures. Keep in mind that unemployment checks last for a standard 26 weeks. In some cases consumers are eligible for additional benefits, because, as one analyst noted, "through a combination of federal and state addendums, the maximum eligibility period is over 60 weeks in duration." It's assumed that (some) consumers use their unemployment check to help pay the mortgage. But servicers have to wonder: with more auto layoffs looming and GM and Chrysler closing thousands of dealerships how much more bad employment news can states like Michigan, Indiana and Ohio take?..

In case you haven't noticed the yield on the 10-year Treasury has been creeping up of late which means mortgage rates should be doing the same. A few months back -- during the darkest days of the economy -- the yield on the 10-year was at 2.03%. Of course, everything looks so much better now -- sort of like the Washington Nationals baseball team. Meanwhile: Earlier this past week the telephones weren't being picked up at Precision Financial, a licensed mortgage banker based in Syosset, N.Y. (that would be Long Island). I tried again on Friday and got an automated recording that switched me over to an operator's extension that put me on hold forever. I also emailed an official at the company but with no luck. Precision, according to its website, has licenses to lend in California, Colorado, Connecticut, Florida, Maryland, Massachusetts, New York, New Jersey, Pennsylvania, and Virginia. Its website boasts that, "High ethical standards and integrity have enabled Precision to grow into one of the fastest rising mortgage bankers in the Northeast." Now, if only they'd answer their phones and emails. Stay tuned…

Due to the fact there are only so many hours in the day and regardless of the calendar you are using there are only eight days in the week, you must make the right decisions every day or your time will get away from you without added value.

The big story of this past week? Answer: the Obama administration's plan to take over the entire banking/mortgage/investment banking industry and dictate pay for every executive! Can you imagine: mortgage traders in New York trying to get by on $200,000 a year when their secretaries are making only half that. Surely, I'm kidding but the White House isn't. It can limit pay for TARP recipients but how can it scale back compensation for non-TARP firms or will it even try? I would guess the idea is solely a trial balloon floated by some left-wing undersecretary at Treasury (probably someone who attended Berkeley; hey, wait a minute, my co-author Matt Padilla went to Berkeley), but seriously, folks, it ain't gonna happen. But then again, one can argue that after using $2 trillion in taxpayer funds (or whatever the current figure is) to bail out our financial system perhaps Uncle Sam has the right to dictate pay scales for certain uber traders, especially those involved in credit default swaps, MBS, ABS, take your pick. Again, I don't see it happening, but I've been wrong before...