Loan Think

There are skills you MUST have in the mortgage business that no one tells you about. Most people focus on finding lenders and discussion scenarios. Their focus is on learning the lending, paperwork and real estate side of the business. There is nothing wrong with that knowledge. However, that knowledge doesn't help you earn commissions, especially in today's market.

We're starting to hear whispers that some regional banks might step up to the plate on warehouse lending -- but not necessarily in a major way. One warehouse executive told us that Branch Banking & Trust is looking at making direct lines of credit to non-banks. He noted that "regional banks are dipping their toe in it but they're only taking on a $10 million to $15 million exposure." The wild card for the sector is whether Wells Fargo & Co. will ramp up the warehouse business of Wachovia Corp., which it bought a few months back…

Sustainable innovation in today’s mortgage market is one of the single most important requirements for growth and profitability. The challenge to innovate lies in the current state of the mortgage industry. Downsizing and lay-offs have stretched vendors and lenders very thin when it comes to having resources available to innovate. Can crowdsourcing bring innovation to the mortgage industry while addressing some of the industry’s most pressing needs?

A mortgage brokerage shop is just another small business, and like many small businesses, quite a few are suffering in the current economic environment.

'Scratch and dent' investor Kondaur Capital, an Orange, Calif.-based company, hopes to double its staff size to 400 full-timers by the end of June. According to a recent report in The Orange County Register, Kondaur's CEO is Jon Daurio who used to work for Long Beach Mortgage Corp., the predecessor company to Ameriquest Mortgage. Meanwhile, it was about a year ago that Ameriquest's founder, Roland Arnall, passed away due to cancer…

Colonial BancGroup of Alabama told National Mortgage News on Thursday that it is committed to warehouse lending and would like to expand the business but presently cannot. CBG, whose stock trades for about $1 a share, is trying to raise $300 million in private equity, which would then make it eligible for $550 million of TARP funds. For the full update see the Monday edition of National Mortgage News…

There's a been a quiet battle raging between secondary market investors and mortgage bankers that sold them loans that eventually went into default. One underwriter who has worked on buyback deals told National Mortgage News that two firms haggling with investors include Bank of America (on behalf of Countrywide), Deutsche Bank (on behalf of its MortgageIT unit) and GMAC Mortgage, once a large subprime and second lien funder. "You should hear some of these conversations," said our source. "The fights are ridiculous. There's yelling and fighting and screaming." The job of these "buyback desks" is to re-underwrite delinquent loans to see where they violated loan guidelines. "The idea is to re-underwrite them and form arguments" as to why they should be repurchased, said the source. Of course, delinquent loans cannot be put back to dead mortgage companies. Meanwhile, the FDIC officially unloaded IndyMac to hedge fund mavens Chris Flowers and John Paulson, the latter of whom cleaned up during the subprime crisis by shorting the ABX Index. Even though the deal is closed there's still no specific word on what happened to the $1 billion or so (maybe more) in buybacks that Fannie Mae had with the former alt-A giant. An FDIC spokesman told us the matter has been resolved but offered no details. If you have any tips on loan buyback battles send them my way: Paul.Muolo@SourceMedia.com...

Be, do, have.

How do you spell "reflation"? Yesterday the Federal Reserve said it would pump $1.15 trillion into the housing and mortgage markets by purchasing -- among other things -- $750 billion of Fannie Mae and Freddie Mac MBS. Yowsa. Where is this money coming from? If you listen to the economists, it means that Uncle Sam is effectively printing more money to fund these purchases. The printing of money, historically, spurs inflation -- inflation that affects all asset classes, including land and homes, which leads to this question: how long will it take before all those 'underwater' mortgages are no longer underwater because of what the government announced Wednesday afternoon? Sounds a bit Madoff-esque, but maybe it will work…

This is really two mistakes wrapped up in one. It seems you can't open an email or publication in our industry without being bombarded with solicitations and ads offering you the next "magic pill." Heaven knows that in this market very few have the time or hard-earned money to "piss away" on more boxes of information. What you really need is an edge that works, and works NOW!