Based upon our calculations, this month marks the two year anniversary since this current industry correction cycle began and the 'easy money' one ended (it had started August 1998). You'll remember that last one, that was the one where even a monkey would earn a six figure annual income, because lenders recklessly 'gave money away' to borrowers (of course it wasn't their $$$) and everyone got a piece of it (from the securitization sources). Today however, during this punishment phase of this new cycle we're all in right now, those secutritizers, many of their investors, several of their insurers, lots of wall street big-shots, most (middle-man) lenders, and a great many borrowers are all having to pay it back one way or another!
The sorta good news now, is that you more than likely are not being compelled to do that same thing, and if this cycle is as short as the last one - only seven years in length vs. more typically 10 years like the two before that, then all we gotta do is hold out 5 more years as this current group of industry employed people get a taste of what the business really is like ... hard work ... not an easy money tree to simply shake! Whoppie.
Far as more good news, for all of the friends of Secret! University, (no matter what your industry job is) we offer up two central areas for you to focus on as you move through this difficult period, and want to have a long multi-year career afterwards:
1). Ethics: More than anything else - this issue is critical for you to be able to stay in business over time. Your behavior needs to be bulletproof and above reproach; remember what it means ... Ethical behavior is what you do when nobody is watching <-- that's the real measuring stick!
2). Credibility: Generally speaking, credibility results from evaluating multiple dimensions simultaneously; most of researchers identify "trustworthiness" and "expertise" as the two main components of credibility. At the same time, it's important to differentiate between trust, which is related more to "dependability" and credibility, which is connected to the idea of "believability".
Over the years, I have been invited to speak at many local, regional, and national conferences and conventions – about a wide range of topics having to do with the mortgage lending industry. One reason for that, is simply due to the fact that I've been kicking around this industry since 1966 as a subprime mortgage broker/banker (and lately as a Mentor/teacher) – after a while "things" rub off on you, and you pick up a bit of knowledge and understanding here and there. Maybe I'm sharper than a lot of people, have learned from my own numerous mistakes, or … maybe I'm just older that's all. But, take it from me ETHICS & CREDIBILITY are what matters.
Register then post your views here on our Discussion Board
Freddie Predicts 'Credit Costs' of $16 Billion
Freddie Mac officials, noting that they are being "conservative" in their loss estimates, on Tuesday forecasted $16.4 billion in future "credit costs" to cover writedowns but believe the actual loss experience will be $10 billion to $12 billion. Discussing its poor third quarter performance, company officials predicted dismal fourth quarter results as well. It also was hinted that Freddie tried to obtain a regulatory waiver on maintaining a 30% excess capital ratio but was rejected by the Office of Federal Housing Enterprise Oversight. All the bad news was not what stock analysts wanted to hear. During the conference call, company CEO and chairman Richard Syron suggested that a preferred stock offering to bolster its capital position was imminent. CLICK HERE if you want to give us your opinion on our Discussion Board
Mortgage Reform and Anti-Predatory Lending Act of 2007
Lots of dialogue and positioning going on over this recently passed House Bill. Whether the Senate will OK, it and then it becomes Law, well ... that's another subject. You should take the time to carefully read it, I have now four (4) different times; there's a lot of good for the overall industry in it.
The many issues it addresses do need fixing; and from what other industry advocates and I think - either this or something close to this Bill will become Federal Law soon. Give us your two cents on our Discussion Board
Billions in Subprime Securities Downgraded
Fitch Ratings announced it initiated a formal review of collateralized debt obligations backed entirely or partially by trust preferred securities issued by real estate investment trusts, homebuilders and residential mortgage lending financial institutions. Among the factors prompting the review were that the credit profiles of many of these issuers continue to decline. Subprime loss forecasting assumptions Fitch updated to better capture deteriorating performance reportedly led to downgrades on hundreds of millions of dollars of a number of deals from various issuers in 2005. A number of scratch and dent mortgage-backed deals reportedly received lower ratings by Moody's Investors Service on certain classes because the proportion of severely delinquent loans has been increasing while the amount of available credit enhancement has been reduced from losses and stepdown. Tells us what you think about this on our Discussion Board
MBS Investors Return to Market
Mortgage-backed securities investors shook free of some of their liquidity concerns and staged a notable return to the market Wednesday afternoon. While the sector had given up some of those gains as of Thursday morning, MBS continued to trade relatively well. "We didn't give it all back," Art Frank, director and head of MBS research at Deutsche Bank Securities Inc., said of the improvement in the MBS market Nov. 28. "It was quite a spectacular day." What do you have to say about this? Sound off on our Discussion Board
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