Loan Think

Companies wanting to make the most of their public relations budgets have an alternative to traditional public relations agencies.

Solutions. That is what your market is looking for. Referral partners, including agents, builders, investors and your borrowers are looking for someone to help them solve problems.

A survey conducted at the start of December found, according to its sponsors, that an overwhelming number of Americans are unable to answer some of the most basic questions about borrowing, interest rates, terminology, and even basic math. More troubling is that many Americans admit to making poor decisions with their own personal finances.

The Society for Advancement of Consulting has developed some best and worst practices in current economic conditions, based on the observations of its global membership and the tens of thousands of clients they serve.

Capitalism is a wild and wacky game. And it's not for those with weak guts, which brings me to the case of IndyMac whose long awaited sale was announced by the Federal Deposit Insurance Corp. Friday afternoon. The new "owners" of IndyMac are essentially a bunch of hedge funds that are well known for some of their contrarian bets in financial services. First and foremost among those private hedge funds is Paulson & Co., led by hedge fund guru John Paulson, who made a killing (a $15 billion killing) by shorting the ABX Index back in 2007 and early 2008. The ABX gauges the value of subprime bonds and we all know what happened there, don't we? For some reason the FDIC didn't mention Mr. Paulson's $15 billion winning bet against the B&C market in its press release. The FDIC's original investment banker on the sale of IndyMac was Lehman Brothers, which went bust a few months after getting the assignment. The advisor to the consortium? That would be Merrill Lynch & Co., which helped cause the subprime crisis by financing dozens of subprime lenders, buying their loans and packaging them into securities (CDOs) for sale to institutional investors in the U.S. and overseas. (Lehman did that too.) Like I said, capitalism is a wild and wacky game. But who knows any more, really? If John Paulson is putting his reputation (and a little bit of his money) on the line, maybe this actually signals a "bottom" in the mortgage and credit crisis. For the full story on the sale of IndyMac visit: http://www.nationalmortgagenews.com/...

Surely it’s a relief to most that 2008 is done. But what will 2009 bring? For one, there’s going to be a new administration in town that has promised sweeping change, literally. That same administration recognizes that re-election depends on if it can make good on those promises. So, there are uncertainties for sure, but I’m hopeful. I think the industry can and will come back even stronger. How? Here’s how:

Over that last 10-15 years the mortgage industry has seen a number of technological innovations, DOS to Windows based LOS systems, Window’s to web-based LOS’s, AUS systems, rules based workflow, online origination, imaging, and decisioning technology, to name a few. The majority of these innovations have been primarily loan centric. Loan centric systems focus on the specific loan or transaction. But what about the customer?

Planning expert Erica Olsen said, "Conducting business in today's world almost always involves some type of risk, but never more so than today. The recent world market upheavals have left most of us unsettled and uncertain about the future. In your planning, risk is best defined as how you perceive the likelihood of suffering a loss, and the perception of the impact of a particular risk varies from person to person. Assessing risks in advance allows you to determine the most cost-effective strategies to handle each type of risk. This is another exercise that doesn't require hiring a professional facilitator, and it is a great opportunity to include your team since they may have different perspectives.

Richard Martin, a consultant based in the Montreal area, comments "Unless you've been on Mars lately, or you're a troglodyte, you may have noticed that the whole world has been going through a major financial crisis. People are, rightly or wrongly, worried about their livelihoods and their futures.

Private lenders have extended nine mortgages to residents of the San Felipe pueblo in New Mexico. While that may not sound like a lot for a village of 3600 people, it's a start. It's a lot harder lending in San Felipe than it would be in most rural villages of its size. That's because San Felipe is Indian Country, one of 19 such pueblo (village) tribes in New Mexico. So it has complicated land issues even before the issues of poverty and credit and federal bureaucracy and perhaps some deep background racism are factored in. It's a long process to get private lenders on a reservation, but San Felipe has made a start with nine mortgage loans through Bank of Albuquerque, Wells Fargo, Gem Mortgage, and Aztec Mortgage. Others are pending the tedious lease approval process at BIA. "That number needs to increase dramatically," said Isaac Perez, executive director of San Felipe Pueblo Housing, a "TDHE" or tribally-designated housing entity. The pueblo, halfway between Albuquerque and Santa Fe, has also done some housing-related loans through the state housing finance agency, the New Mexico Mortgage Finance Authority, which runs a "Primero" loan program for affordable housing loans. The tribe is leveraging HUD Rural Housing and Economic Development money through NMMFA on 17 rehabs and 18 single-family homes being done on the reservation. The rehabs combine a $6000 RHED grant with a 4.5% mortgage of $23,500 through NMMFA's Primero loan program. The single-family homes are financed with a $6000 RHED grant (provided through NMMFA's Revive program) and money the tribe gets from the Indian Community Development Block Grant program and the Native American Housing Assistance and Self Determination Act. According to Eric Schmieder, NMMFA's Native American housing consultant, 13 of the rehabs are done, as well as ten of the single-family homes, with another five under construction. Perez said the pueblo receives between $480,000 and $550,000 a year in federal ICDBG and NAHASDA funds, enough to finance 20-25 rehabs a year. The tribe has used this annual money to leverage another $5 to $8 million in funds. "We're out there as much as we can, trying to get money," Perez said. His goal is "to provide every tribal member some housing assistance regardless of income, status or anything else," he said. His agency, has also constructed 25 stick-built houses since 2003, and done another 11 constructions through the Bureau of Indian Affairs' Home Improvement Program. The tribe has also built ten houses for emergency housing for families that have suffered a fire or some other emergency. The TDHE has also done construction for tribal non-housing projects, such as San Felipe's new Administration building. In addition, it is planning a $7-$10 million housing development that will build more than 100 homes to put a dent in the "huge" housing need on the tribal homeland. It likely will partner with the NMMFA on homeownership counseling and downpayment assistance to support the ambitious project. The tribe and the NMMFA are currently partnering on projects to build or rehab 35 houses on the reservation, with more than 20 already completed. Perez said more than 150 families are on the SFPH new home waiting list, and another 50 are waiting for rehabs. The 104 home project (28 of which will be modular) will be located south of the pueblo's elementary school on a 100 acre site, and 80% of the project is planned to be built in-house. Perez said the project may be done in three phases. The bulk of the financing would come from the Department of Housing and Urban Development, in the form of section 184 or Title VI loans, and HUD's RHED program. The NMMFA Revive program has leveraged RHED money in several other New Mexico tribes, Schmieder said, including the Mescalero Apache, the Alamo chapter of the Navajo Nation, and the Tesuque and Laguna pueblos. Fourteen rehabs have been financed at Mescalero, 8 at Zuni, and 12 new homes at Alamo, he said. Eleven are being done at Laguna through RHED and NMMFA's Housing Trust Fund. Revive has also been used for rehabs at Tesuque and San Idlefonso pueblos. According to NMMFA, "the Revive program is designed to be as flexible as possible to meet the housing challenges in New Mexico Indian Country." That means that Revive "is a process for combining various federal, state, tribal and MFA resources to address housing needs on reservations in New Mexico." The program seeks to increase capacity for TDHEs and non-profits working on New Mexico tribal land, give tribal members greater access to credit and financial literacy training, and providing more housing money for tribal members. "With Revive, the housing partners gain skills in loan qualifying and processing, homebuyer and financial literacy skills are enhanced on the reservation and additional housing repair funds are provided to the tribal members."