With all of the attention in the marketplace today Originators are beginning to understand the challenge investors have on the secondary market. They money is running out of town so quick, what is here today might be gone tomorrow. So we have to sit back and evaluate our business model, and find exactly who we are pandering too? The folks that specialized in subprime are obviously looking for something if they are even here at all. They are all hard pressed to find an FHA underwriter that isn't on a 10day turntime, or trying to find that investor that will still take an EA2 or EA3 loan. MI companies are killing loans even after the investors approve them. No more 95%???? 680 Ficos only????
The best part is that almost all FAST TRACK SISA is gone on the secondary market. People will only be able to get these loans retail direct to the investors and banks themselves. Who knows how long that will last. Our CEO put it best. Its like the drumming game of the movie Jumanjii. That drumming gets louder and louder each day.
So what is next? Where are these originators going to go for business? I IMPLORE them to take a fresh new look at what they are selling. I know that it is challenging to get a loan closed these days. I live everyday with the fear that i might wake up in the morning and have no more money to lend. We only lend to the highest tier of borrower available, with a product that has almost a ZERO default rate, but it could still end at any moment. The only answer is to secure outside investors. I want to scream off the roof "Hey Anyone want to buy closed loans and make a good lateral spread on your money?"
The answer is going to be volume. The more good deals i get, the more attractive we become, and the more likely others will follow. It amazes me the folks i talked too last year that thought the HOA was just another gimmick. Now they are coming back for that second look since they see we are still here. Our competition is all but dead for the product. Even the MLM folks trying to sell software can't get the borrowers a HELOC. Their answer is to run all of your cash through a credit card. MY GOSH!!!
We are all thinking differently these days. Phase 1 of the mortgage revolution done. Now into Phase 2, time to think HOA. http://www.thinkhoa.com/
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