With troubled Mortgage Banks like Countrywide, First Magnus and Greenpoint all over the news, many people are only seeing the negative press on the Mortgage Industry. While I understand that negative items sell more papers and get more hits on websites, there is still some good news that gets passed by and I feel like I have to get it out there!
I can't say it enough, there are still PLENTY of strong Mortgage Banks out there out there. The nations largest lender Countrywide may be in trouble but, is it because of the market or bad management? Quite frankly, I believe its both! They put themselves in a position to get burned by a market turn around and guess what happened, they did! I am not here to slam CW, I am here to make sure people understand that there are still many Mortgage Banks that are in very good financial positions. For example, Bank of America has been attempting to buy CW for a couple of years now. They are liquid enough to do so. B of A has always maintained very strict underwriting guidelines.
Also, I have recently posted about Hudson City Bancorp and how strong they were financially because they maintained such strict underwriting guidelines through the boom. Well, guess what HCB is two-thirds the size of CW. Another report has surfaced on housing wire.com about HCB regarding the low risk equated with their underwriting. See story below:
- Hudson City Touts Prudent Underwriting, by housingwire.com
- Hudson City Bancorp, the nation's third largest thrift, said today that its mortgage operations were recognized in a recent study as among the least risky in the nation. Citing a study by SMR Research Corporation, the thrift said it was ranked in the top one percent among large lenders assessed for mortgage quality.
- From the press statement:
- SMR used a risk factor weighting system to calculate an "Overall Risk Score". SMR's study identified a mortgage lender as "an average credit risk" by designating the lender with a score of 1,000. A score below 1,000 indicates a lender is a lower credit risk than the national average and a score higher than 1,000 indicates a greater risk. The scores of mortgage lenders nationally ranged from a high credit risk ranking of 2,704 to a low credit risk ranking of 243. Hudson City received a score of 302 ...
- I've checked with SMR's Web site and the study is not publicly available, and doesn't appear to have been made available to the press for comment and coverage. Here's the prospectus for the study.
So basically, what I am trying to say is that when one giant falls you can rest assured that there will be another to take it's place! Bank on that!
Your mortgage partner for life,
Rey "Steak Dinner" Gallegos
Senior Loan OfficerFive Star Mortgage
Website: http://www.steak-dinner.com/Your complete community mortgage broker Approved in NV, CA, UT, NM, AK, and FL
Proud member National Association of Mortgage Brokers
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The media is eating it up. The can build you up and then tear you down! In the meantime rents are rising steadily here, prices are dropping and another buying frenzy couldn't be out of the picture in the future (next year)