Loan Think

Canadian business consultant Richard Martin comments "Whether as an individual, an entrepreneur, or an executive, there are a number of things that can be done to thrive in a chaotic economy. Within the bounds of prudent risk management, the best defense is always offense.

Much was made in certain quarters of the media to the body language of Alex Rodriquez in his two public responses to allegations he took steroids.

Business consultant Barry Maher writes, "When you fail, when you make a mistake, you might want to try to keep your head - unless you can think of a lot of situations that were actually improved by panic. And, own up to your mistake-to yourself and to any others involved. Anyone who doesn't realize that's the best course of action hasn't been paying much attention to politics for the last 40 years."

It may not be a coincidence: the stock market is selling off yet again (reaching an 11-year low), and traders and investors in 'scratch and dent,' and non-performing loans say there's been a flood of new offerings the past few weeks. One trader, requesting anonymity, said a recent alt-A portfolio sold for about 70 cents on the dollar. Here's the kicker: the loans were performing. The lender sold the package at a loss to "free up his warehouse lines," said the trader…

There's a basic question I've been meaning to ask readers for quite some time and it goes like this: Who in their right mind would ever buy another stock in their lives? Not me, that's for sure. Think about it. The stock market is down 50% from its all-time high, corporations are laying off thousands of workers, real estate markets are still ugly and the future doesn't exactly look bright. I mean, come on now. Yes, I have money in stocks - my retirement money (like everyone's) has been clobbered. Most of my non-retirement money has been in cash and government bonds for three years. Don't get me wrong. I'm not bragging. Every time I thought about bottom fishing (I'm not allowed to buy bank or mortgage stocks) I've chickened out. Why? I don't know. The only thing I can say is that it just didn't feel right. And let me tell you - buying Bank of America (it fell to $2.53 on Friday) at times seems awfully tempting but then I think: Ken Lewis (what did he know and when did he know it?) was reckless enough to swallow both Countrywide and Merrill Lynch - two of the biggest players in subprime - and there's more damage to come. Mr. Lewis was quoted this past week saying Countrywide's residential loan production is "on fire." I assume he means the refi business. In my many interviews over the years with Countrywide founder Angelo Mozilo he stressed that CFC always cleaned up on refis but wasn't as good when it came to the purchase market. It's nice to see that one of CFC's strengths (refis) has remained intact. Anyway, I mention the stock market because the way things feel right now, at this moment in time, that if any bank, S&L or mortgage company wants to pull off an IPO it's just not going to happen. Never again. Not today, not tomorrow and not five years from now. Then again, maybe this is the "capitulation" that old-time stock investors are talking about when they speak of a bottom. A 50% decline in the Dow certainly should represent a bottom. But I'm never buying another stock outside of my retirement account again. Not a one, though I sort of like Microsoft and Intel. And GE looks cheap. No. Must stay away, must stay away, must stay away...

The lack of available warehouse credit for non-depositories continues to be a crisis that's getting little media play outside of National Mortgage News. One investment banker told us this morning, "I keep telling my clients to buy a bank so they can become a warehouse lender. They'll make a lot of money."…

A REMINDER ABOUT NATIONWIDE LOAN OFFICER LICENSING BY AUG. 1, 2009

It’s alive – the Obama Administration’s $75 billion ‘Homeowner Affordability and Stability Plan’ also known as 'HASP.’ Let’s do some math. According to figures compiled by National Mortgage News and the Quarterly Data Report, there are roughly 60 million outstanding residential loans in the U.S., 10% of which are in some stage of delinquency. That works out to 6 million loans. The White House says its plan will help 3 million to 4 million “at risk” consumers or 66% of those who could go into foreclosure. The magic bullet that will help these struggling homeowners is loan modifications. The idea is to lower mortgage payments to no more than 38% of a family’s monthly income. It all sounds promising on paper, but what if the job market continues to worsen and even more Americans become unemployed, causing loan delinquencies to rise once again? And who’s going to keep track of all these loan modifications and police both the servicer and mortgagor? Stay tuned…

In today’s mortgage market, how much is your company’s (lender or vendor) next great innovation worth to your company and the industry as a whole? As the mortgage industry works to redefine itself amongst severe economic conditions and rapidly changing regulations, the answer to this important question could be significant. Just ask Apple the value of the iPod, or Microsoft the impact windows has had.

In the midst of the housing crisis we've all forgotten about RESPA, haven't we? Not exactly. Apparently, several industry trade groups are trying to get the Department of Housing and Urban Development to backpedal on pending RESPA changes, claiming the agency should work with the Federal Reserve Board on making mortgage disclosures complementary with the Fed's so as not to confuse consumers. For the full story see the afternoon story on: nationalmortgagenews.com…