As the industry calms down from dream levels of production and profits the last several years, where are you heading? Are you thinking down stream a year or more, or focusing only on tommorrow? This cycle's gona be around for a while longer.
Even now with countless numbers among us running scared, many of the more hardy soles with some foresight, are considering seeking investment capital; approaching investors to either build and develop an organization, or to expand existing ones as the market continues the shake-out. Hopefully they will recognize a need for a very specific and detailed proposal about how they plan to use the money they are trying to raise and what it will do to the bottom line, because investors will expect to see it, and also understand that raising capital is an expensive and very time-consuming activity. Many have tried this option, most fail at it. No matter what you may think about your special plans, it's not a slam-dunk.
On the other hand, some may be considering selling their firm one day soon. Many who are broker/originators, naively feel their production these past few 'dream years' and relationship contacts (who will disappear when they sell & leave), plus their used computers & old furniture may be worth hundreds of thousands of dollars to potential buyers. That group should instead, be cautious to center their thoughts on retaining earning inside their company (and not pull most of it out), and focus more closely on 'long term and steady' production numbers, so they'll really have something saleable - since most interest from serious buyers is directed on organizations with $500 Million+ in annual production for some time, and not in Mom & Pop shops!
Maybe you're in the third group. Not considering raising capital in these times of many opportunities, nor thinking about selling out - but instead simply going along with the flow! That bunch will have the most difficult time of the three, what with the constant changes in this industry which will continue to catch them flat-footed. Their long-term survival is suspect without a plan of action. Historically, at this point in the cycle of a contracting market, just bobbing along clueless won't work! They can look forward to being part of the 50% employed in the industry today, who will be out of work within one year. You gotta have a plan - and work that plan - to survive and prosper; you can't wish it will simply all work out fine! Register then post your views here on our Discussion Board
Clayton Gets Immunity for Due Diligence Info
"New York Attorney General Andrew Cuomo has granted Clayton Holdings immunity in exchange for providing information on its due diligence work for Wall Street firms that securitized subprime mortgages. The publicly traded company says it has provided due diligence reports to the New York AG since it was first subpoenaed in June. "Now, at the request of the New York attorney general, we have entered into a cooperative agreement with his office," said Frank Filipps, Clayton's chairman and chief executive. The New York Times first reported the immunity agreement. The New York attorney general's office has not replied to requests for confirmation. Clayton performs due diligence on loans purchased by conduits, and identifies "exceptions" to the issuers' loan guidelines. The Shelton, Conn.-based company also evaluates the performance of loans once they are securitized. A company executive said the percentage of loans securitized in 2006 that had exceptions was about 30%."
... I gotta finish off this new piece ... so these guys (who were the 'gatekeepers') KNEW 1/3 of the loans didn't even meet the loose reckless standards that were being employed by the wholesale lenders, but they went ahead anyway and gave them a pass, then stuffed those loans into securities, and sold them to suckers! And, they want/get ammunity! ... OMG. CLICK HERE if you want to give us your opinion on our Discussion Board
Mortgage Licensing Registry Launched
States have a new tool to regulate mortgage companies and access their track records, including information on companies punished in other states for fraud or predatory lending.
The Nationwide Mortgage Licensing System is an online database that will make it easier for states to monitor mortgage companies. If a firm operating in multiple states is sanctioned in one of them, other states will know immediately. And if that firm applies to open in new states, officials will know about the infractions and could deny the company a license.
“The ability to hide a blemish is gone,” said Steven Antonakes, Massachusetts’ state banking commissioner. In the last two years Massachusetts has issued more than 215 enforcement actions against lenders and brokers.
So far, seven states are participating in the registry, which kicked off Jan. 2: Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island. Another eight are slated to join by July, and more than 35 states are expected to participate by the end of 2009. By then, the public also will be able to use the portal to see a company’s state record.
All states require that mortgage companies be licensed, though licensing standards vary in each state.
“This will enhance our regulatory supervision over the mortgage industry. … We’re sharing resources, trying to focus our efforts into providing the most bang for the buck,” said Jeffrey Vogel, chairman of the Conference of State Bank Supervisors (CSBS) and the banking commissioner in Wyoming, which will join the registry in July.
The two groups that set up the system, CSBS and the American Association of Residential Mortgage Regulators, say the depository is a one-stop shop where mortgage companies and loan officers can fill out a standardized set of forms to apply for a license in all participating states. For example, if a firm already has information in the registry to operate in New York and wants to open in Kentucky, it only needs to make a few clicks on the Web to apply for a Kentucky license instead of filling out a new set of state-specific forms.
Planning for the database began four years ago, before the mortgage crisis began dominating headlines. The current wave of foreclosures stems partly from shady lending practices in the high-interest subprime loan market. Some unscrupulous lenders hid the true cost of subprime loans, tacked hidden or excessively high fees onto the loans,or included prepayment penalties for borrowers who tried to refinance. Last year, 1.5 million homes entered foreclosure.
The database will include unique identifiers for each company, its branches, owners and loan officials. Similar to Social Security numbers, these identifiers will follow that firm or person throughout the industry. This is to prevent fraudulent loan originators from escaping punishment by moving to another company, companies from changing their names, or owners from setting up new firms to avoid disclosing past infractions.
On the registry’s first day, 289 companies began filing applications, and 55 submitted them. Eventually, the database could grant more than 370,000 licenses to companies, their branches and loan officers.
One group critical of the registry is the National Association of Mortgage Brokers (NAMB) because they say it doesn’t go far enough. The system only oversees state-regulated banks and lenders, not the largest banks that are regulated by the federal government.
“From a consumer standpoint, this isn’t the perfect scenario because if there’s a bad originator out there, they can easily fall through the cracks and work for someone else,” such as a federally regulated bank, said George Hanzimanolis, NAMB’s president. “If this is about consumer protection, there can’t be an argument that anybody should be left out of this.”
He supports a bill the U.S. House of Representatives passed in November that would require state-regulated banks to join the registry, while loan originators at federal banks must register with the system and receive a unique identifier. See for yourself - HERE's a Link to it. CLICK HERE and Tell us what You Think about this on our Discussion Board
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