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Remember the good old days? Countrywide, WA. Mu., etc?

By
Industry Observer with Responsive Pest Control

Hi all: I was thinking it wasn't too long ago that everyone in the real estate business made money; In some cases, it was an almost obscene amount. Remember the good old days? Countrywide, WA. Mu., etc?

Last week I visited Cedarbrook Lodge which was constructed by Washington Mutual in 2006. What a beautiful place. Opulent would be a better word. Obviously, Cedarbrook Lodge was built in the height of the real estate frenzy. I'm sure it cost upwards of $20 million to construct.

I started in the mortgage business in 2006. Almost everyone who applied could get a loan. I worked for a broker at the time. Our office had over 15 loan officers and they were all doing on average 2-3 loans/month. I know loan officers who had at least 5 years in a row of great production (2002-2007) and did in excess of 10 loans/month. I know realtors who did in the neighborhood of 50 deals/year.

Cut to 2010. Most of the loan officers I worked with then are no longer. They never really learned the business and couldn't handle the guideline changes. Washington Mutual is gone (busted in 2008) and Countrywide was consumed by Bank of America or they would have fallen as well. My small little brokerage used to have wholesale loan reps. calling on us every day. Now, almost everyone is either a correpondent lender or works for a bank.

How the times have changed. Will it ever be like before? Maybe not but those of us who ride it out will reap the rewards. It may just be a couple more years. What have you seen? What do you remember? Feel free to chime in. Thanks for reading!

 

Posted by

Paul McFadden

Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

...back then we hated a loan that came from Wells Fargo...they were so picky...no it appears they were the only smart ones.

Oct 19, 2010 06:48 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Jeffrey: I hear you. Actually Wells is so backed up these days you probably wouldn't like them for a different reason! Take care.

Oct 19, 2010 06:53 AM
Deborah "Dee Dee" Garvin
C2 Financial - San Diego, CA
C2 Financial

Paul,  Will things moderate?  Yes.  Will we see market and product innovation return?  Possibly...but it will more likely come from new portfolio investors.  I believe the Financial Reform Bill (among others) will prevent any sort of real stated programs coming from traditional banks.  Will mortgage brokerage survive and/or rebound?  That is hard to say....if, and when, consumers ever figure out they have been basically led to slaughter by the big box banks...possibly. Will income to mortgage peeps ever return to robust levels?  Again, hard to say....working for a big box bank is likely to become a pretty palty salary, but the only option for peeps who can't or won't pass muster for national testing.  To survive and thrive I think a MLO must morph into a true financial consultant.  

What will really be telling over the coming year or two is whether or not people will get into the mortgage industry.  If you and I start seeing college grads or career changing people swarming to take the tests and jump into the industry it will be interesting...and, it would be refreshing.  Of course, if that doesn't happen the real estate community and consumers better get used to seeing their MLO using a walker and a sippee cup!!! LOL!

Oct 19, 2010 07:04 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Deborah: Thanks for commenting. I agree with a lot of your sentiments, especially the one about us becoming a true financial consultant. I look forward to that if we can ride out the present storm. I'm not sure we'll be seeing too many entries into our world over the next couple years but the wave is coming. That will signal a return to better times although I don't supposed we'll welcome the increased competition. It's been nice to be the only one in some cases right now! Take care.

Oct 19, 2010 07:36 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Paul I am sure that things will be booming again, when I don't know, but they will happen.  I just hope that we have learned something from this last go around, and avoid of few of the mistakes.

Hopefully licensing will help, and make it tough for the rift raft to get into the business.

Oct 19, 2010 11:00 AM
1~Judi Barrett
Integrity Real Estate Services 116 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

It is difficult to imagine that things will ever return to what they were before.

Just out of curiousity, what is the list price on Cedarbook Lodge?  You mentioned 20 million probably to construct..

Oct 19, 2010 03:09 PM
Phil Stevenson, CRMP
PS Mortgage Lending 305-791-4874 or 888-845-6630 - Miami, FL
"Mortgage Nerd" in Miami, Florida and Texas

CW retail was guilty of a ton of fraud, then again so were brokers.  I doubt we will ever get back to those days when it comes to loan volume, but as individuals we might.  This would be because a ton of people will leave the biz and it is getting harder to get in. So the hope is that you and I will be able to take a larger share of the market when the loan volume increases due to s steadier market.  Great post!

Oct 20, 2010 08:10 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Phil: I don't know that firsthand but am not surprised. There were a lot of shenanigans back then. You may be right about barriers to entry. We shall see!

Judi: Cedarbrook Lodge is not for sale. It is being operated as a business conference center where the public can also stay overnight. It is a beautiful place and I wish the new owners well.

George: I think the barriers to entry are tougher this time around. When we'll get back to a more normal market is anyone's guess. Ok. I'll hazard a guess. I'm thinking in either 2012 or 2013. Take care.

Oct 20, 2010 10:30 AM
Kevin Hancock
Evergreen Home Loans NMLS 3182 - Poulsbo, WA
The Hancock Mortgage Team

Great post Paul!  Ahhh, the good old days... although I must say I am more excited for the future than longing for the past.  I think our industry will be much stronger in 5 years for those who stay in the profession.

I love the idea of Mortgage Lenders becoming true financial consultants... it makes a lot of sense if you think about it.  Why would you seek a mortgage from somebody who wasn't?  That is certainly how I try to position myself with my clients and business partners.

Oct 26, 2010 11:45 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

Kevin: Good for you. Make sure you say hello if you're in Bellevue. Have a great day!

Oct 26, 2010 11:55 AM