Loan Think

I've become something of a layoff junkie. But I take no perverse pleasure in all the news of companies cutting thousands upon thousands of full-time workers. Lives are disrupted. Families are in crisis. An appraiser I know in Arizona says the "side story" to all this is that the divorce rate is spiking up. Why? Answer: financial stress leads to crumbling marriages. I watch and read the layoff news with rapt attention for this one reason: I figure 50% to 60% of these newly minted unemployed have mortgages. And if I had to guess, I would say the figure could be as high as 80%. It's hard to tell. For the white-collar folks the percentage with mortgage debt might be 90%. Who knows, really? You know the numbers by now: 500,000 U.S. job cuts in December alone and thousands more this past week - Eastman Kodak, Caterpillar, take your pick. The layoff news is unrelenting, which leads me to ask this: when's the last time a publicly traded company issued a press release saying it was actually hiring workers? Google that one. Many households these days have two wage earners but given the high cost of housing the past decade it doesn't take much to send a mortgage into delinquency. Of course, housing is starting to become a whole lot cheaper but there's a Catch-22: if you don't have a job you can't buy. Next Friday, the new unemployment numbers come out. In a few weeks National Mortgage News will release its delinquency numbers for 4Q. The results likely will not be pretty. If you want to look at the 3Q results drop an e-mail to Deartra.Todd@SourceMedia.com and ask about NMN's Quarterly Data Report...

NEW LAWSUIT BASED ON THE CRISP AND COLE FIASCO IN BAKERSFIELD, CALIF.

In case you're wondering Aurora Loan Services is still open for business, or so says its website. As you might recall, ALS was ultimately owned by the new bankrupt Lehman Brothers. But, as a technical matter, ALS (a subprime/alt-A servicer) was/is a subsidiary of Lehman Brothers Bank and not a part of the Lehman Brothers Holding Inc. bankruptcy filing. ALS stopped funded loans well over a year ago but remains as a servicer with a portfolio of roughly $100 billion. Its executives aren't exactly a talkative bunch. As for its future…

When M&A specialist Jordan Brown at MarketWise Advisors told me that we were going to experience the heaviest tech M&A spree ever, he wasn’t kidding. In just the last month there have been three high-profile mortgage technology vendors getting acquired or acquiring others. The goal seems to be who can be more end-to-end as compared to the next guy. With assets cheap it makes sense to buy, but I wonder if the goal of offering an end-to-end technology can ever be fulfilled.

With JPMorgan's recent announcement that it would exit the wholesale channel, rumors have spread concerning which firm might bolt next. Sources tell us that Flagstar Bancorp is committed to the channel, as is Taylor, Bean & Whitaker. One former wholesale executive told us recently that "a couple small, well-run privates are swamped" with applications. Stay tuned…

The mortgage landscape is rapidly changing before our eyes. There is a new administration, increases in regulations and significant layoffs during these tough economic times. Both lenders and vendors are challenged to develop innovative solutions to address these issues head on. In developing these innovative solutions, lenders and vendors may have addressed their specific product and service offerings, but are they positioned for success?

Now that Treasury is once again considering buying troubled mortgages (and placing them in a government controlled "bad bank)some 'scratch and dent' investors are wondering whether such a move will deter banks, thrifts, and investment banking firms from selling their non-performing and sub-performing portfolios. When the TARP plan was first being put together this fall some sellers put their auctions on-hold waiting to see what price the Treasury would establish for non-performing product...

I read with great interest over the weekend an article in the New York Times. It appears the middle class in China, especially those that are educated, are "shocked that prosperity is not guaranteed." I think a few of us in the United States have the same lack of respect for history.

Body language expert Carol Kinsey Goman knows that nonverbal signals play a key role in helping people form quick impressions. "Our ability to instantly read body language is one of our basic survival instincts and can be traced back to primeval origins. But, as innate as this ability may be, not all of our first impressions are accurate," she said.

Consultant Marsha Egan has written a new book calling for people to shed the dead weight from their e-mail inbox and take control of their personal and professional productivity. She declared the second annual "Clean Out Your Inbox Week" for the last week of January. During this week, companies and organizations are encouraged to implement best practices for e-mail use in an effort to boost productivity.