It's the end of the year and what better time to take stock and throw out three "wishes" for 2010. Most of these - as you might expect - are mortgage related. So, here goes:
Employment. I have a theory about our nation's economic meltdown which accelerated in the fall of 2008. Thanks to the Internet and "mass media," companies today are better informed than ever before. When they saw the stock market and economy heading south like a bullet they moved to trim expenses as fast as humanly possible. Unfortunately, those expense cutbacks involved humans. Companies shed workers faster than ever before. The unemployment rate stands at 10% and in two weeks we'll get the results for December. The national job picture is essential to mortgage banking. Every executive that works in this industry knows it. The quicker the American public gets back to work, the better it will be for lenders and servicers. If you wonder why the housing and financial services industries became so powerful over the past three decades the answer lies in not just political donations but jobs. As America "de-industrializes" shipping as many blue-collar jobs overseas as they can (how's that for patriotism?) it leaves homebuilders in an enviable place. The workers who build and repair homes in the U.S. cannot be replaced by foreign workers who earn a fraction of what they earn. If you're thinking of cutting workers in the next few months, ask yourself this: Do I really need to do this? Each employee is a potential customer.
Smaller houses. How's that? Living in the Washington area the past two decades I've seen too many homes constructed with total square footage ranging from 3,000 to 5,000 feet. This would be fine if each family had four kids or more but that's not the case. Big homes are expensive to build and costly to heat and cool. (And finance.) What does a white-collar computer engineer living in Bethesda need a "mud room" for? Most couples around here have two kids or less. What are they doing with all those extra bedrooms? Many of these mini-mansions sit on small lots meaning there's little or no backyard. Going forward, builders should think "green" and incorporate solar panels in all heating and electrical systems. Going "green" isn't just good for the environment, it sends a message to our oil-producing "allies" in the Middle East. Small can be good.
The "mortgage cartel" issue. When two firms - Bank of America and Wells Fargo - control 45% of both the servicing and origination markets that's not a good thing unless you happen to work for them. I've touched on this topic before in other columns but some type of federal restraints should be placed on how many housing receivables (mortgage servicing rights) can be housed at one firm. I'm not sure where you draw the line, but if you look at commercial banking industry, the deposit cap is 10%. Discuss this issue amongst yourselves and send an e-mail to
That's it for the wish list. I'd like to highlight two quotes that I think all industry professionals should keep in mind during the coming year. One comes from MBS co-inventor Lewis Ranieri who once said, "Mortgages are about math." For information feel free to read the Michael Lewis book "Liar's Poker" and the one I co-authored with Matt Padilla of The Orange County Register: "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis." (Matt, by the way, writes the "Mortgage Insider" blog for that newspaper's website. It's a must-read for Orange County mortgage pros.) The other quote I'd like to highlight comes from mortgage researcher David Olson who recently hit a chord with brokers and small mortgage bankers everywhere when he uttered these words to me: "Maybe someone in the federal government will realize that what they've been doing is very anti-small business." He was commenting on all the federal and state regulations and capital requirements beginning to be heaped on loan brokers.
Lastly, I'd like to pick on one of our competitors who gives his stuff away for free. (One of their so-called columnists took a pot shot at me some time back and now it's time to reciprocate.) The other day, this website incorrectly reported that Interactive Mortgage Advisors is requiring bidders on the Thornburg servicing portfolio to have a minimum net worth of $50 million. The actual number is $15 million. National Mortgage News has been breaking stories about the Thornburg auction for well over a month. Feel free to visit the NMN website at
OTHER COLUMNS TO READ: Let's face it: this is the only mortgage column you need to read and advertise on. But if you need to be entertained on other nonmortgage issues there's always the "Mr. Gripes" column penned by former NMN salesman Jim Israel-Hollander or as the late great Stan Strachan called him: Mr. Hollandaise Sauce. Jim's tirades can be found at
SPEAKING OPPORTUNITY: SourceMedia, the folks that own NMN, American Banker, Credit Union Journal and other publications is looking for topics and speakers for its fourth annual mortgage servicing conference in Dallas. We already have some "topics and talkers" but we're looking for more. For more information contact
DATA NOTICE No. 1: Planning for next year and need soup-to-nuts statistics on the nation's top residential (and commercial) lenders and servicers? The new MortgageStats.com data product might be what you're looking for. The user-friendly M-Stats is Web-based and incorporates both the Quarterly Data Report and our annual Mortgage Industry Directory. Among other things, it has annual rankings on the top 400 lenders and servicers, including breakdowns on retail, wholesale, and correspondent - and news archives. There's contact info, too, and plenty of data on servicing. And here's the best part: you get quarterly updates. To see a sample send an e-mail to
DATA NOTICE No. 2: Even though we offer MortgageStats.com you can still subscribe to the Quarterly Data Report and Alternative Products QDR, spreadsheet products that provide readers with quarterly rankings on the nation's top lenders and servicers. The new 3Q edition of both is now available. For more info shoot an e-mail to
THE LAST WORD: Merry Christmas and Happy Winter Solstice. Drive carefully.
