Loan Think

The National Association for the Self-Employed gives a word of warning for owners of small business. They need to know the tax classification for any workers they might have. It is not the choice of the worker on whether they are a W-2 employee or a 1099 independent contractor.

Heather Villa, the creator and chief executive of online bookkeeping service IAC-EZ, New York, created a Q&A dedicated to helping small business owners prepare their 2008 taxes during a severe recession.

If it's late February that means it's time for the 38th annual 'Midwinter Housing Finance Conference' in Park City, where the mortgage industry's 'movers and shakers' gather for three days of skiing and industry gossip. The conference ends on Sunday and the keynote speaker is the nation's top GSE regulator James Lockhart. In attendance is none other then Adam Bass, once the vice chairman of Ameriquest Capital Corp. During the height of the subprime boom ACC controlled one of the nation's more (shall we say) "interesting" subprime lenders, Ameriquest Mortgage. National Mortgage News correspondent Lew Sichelman said he'll be having dinner with Bass at the meeting. It was three years ago that Ameriquest agreed to pay $325 million to the states to settle allegations that its retail loan officers engaged in abusive lending practices. (Critics should keep that in mind when blaming loan brokers for the mortgage mess.) Ameriquest was the brainchild of the late Roland Arnall. The lender's rise and fall is detailed in the book, "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis." By the way, Ameriquest used to sell and securitize its subprime loans through Greenwich Capital, which in turn is owned by Royal Bank of Scotland which (now) is 70% owned by the British government. Greenwich now employs some former mortgage traders from Bear Stearns. Funny world we live in…

The large regional bank that is contemplating exiting the warehouse lending arena is National City Corp. of Cleveland. Sources tell us that NatCity likes the business (has for years) but its new owner, PNC Bank of Pittsburgh, isn't so sure. NatCity officials have been told to clam up and PNC isn't saying much about the issue. Early last week one NatCity source close to the matter sounded understandably upset about a possible shutdown. But there appears to be some hope for NatCity and its non-bank customers. One advisor told us this week that because PNC has accepted Troubled Asset Relief Program money it may delay the warehouse shutdown or stay in the game. Officials at Treasury and the Federal Reserve supposedly are aware of the current warehouse crisis - as in a lack of providers - and would not look kindly on PNC/NatCity exiting warehouse. At press time the situation looked a bit cloudy...

If this doesn't revive the housing market in California, then nothing will: California governor Arnold Schwarzenegger signed a billing allowing for new home buyers to receive a maximum tax credit of $10,000. And here's the kicker: buyers can use both the California credit and the new federal tax credit for a total benefit of $18,000. Tax credit means that if a consumer owes Uncle Sam and the state $18,000 their tax bill would be, well, zero. Is this a great country or what?..

KEY ELEMENTS OF THE STIMULUS PLAN FOR MORTGAGE BROKERS TO USE FROM A MARKETING POINT OF VIEW

Now that JPMorgan Chase has decided to exit the warehouse arena the obvious question becomes: who's next? Mortgage advisors tell us that one regional bank that is a fairly large player in the sector is seriously contemplating throwing in the towel on warehouse financing. These are treacherous times for non-depository mortgage bankers. There are hundreds of non-banks still originating loans (mostly Fannie Mae, Freddie Mac and FHA product) but if these firms cannot get financing it could spell the death knell for what was once a thriving part of the residential finance industry. Meanwhile, the Treasury and the Federal Reserve have yet to weigh in on the warehouse issue -- at least not publicly…

Non-depository mortgage lenders are still starved for warehouse credit, according to Scott Stern, president of the Lenders One cooperative. Visiting with National Mortgage News recently Mr. Stern described the situation as a crisis, adding that "If you lose a warehouse line, there is no place to go but out of business." Lender's One, like the Mortgage Bankers Association, favors allowing Fannie Mae and Freddie Mac to become involved in warehouse financing but both the Federal Reserve and Treasury have yet to weigh in on the issue…

The Mortgage Bankers Association recently held its annual servicing show in Florida. An analyst from Friedman Billings Ramsey was there, taking in the color. In a new research note the analyst said he heard stories about how some borrowers do not want to make spending changes to save their homes. He writes: "One servicer claimed that a borrower wanted the servicer to lower his/her $3,000 per month mortgage payment because the borrower was unwilling to give up two monthly luxury car payments that totaled over $3,000 per month." Meanwhile, FBR's stock is trading for 15 cents a share on the NYSE…

I am the cause of the failure or success of my business and family life and the relationships in my life. It's me. Not anyone else or anything else, it's me.