Because you sometimes can be blind sided. Case in point, I had 2 clients this week get caught in a very tough situation because their national title partner filed bankruptcy protection on the afternoon of the 25th. This was a huge blo to their current production and they had genuine concerns. Fortunately we were able to help, but it underscores the importance of having strong relationships. You have to have some level of disclosure and trust to make sure they have the financial stability to make it through these tough times.
Most economists and economic forecasters agree that we are in for a very prolonged recovery. I have read everything from 6 months to 5 years. My opinion, I think we are looking at 2years. The sub prime assets are pretty much already worked out and have moved through the system accounting for roughly 50% of the riskier paper placed over the last 5 years. The other 2 trillion or so is going to come from the other risky and exotic instruments like Pay Option Arms, Teaser Arms, and similar programs offered to better credit borrowers that are just now starting to experience resets of their adjustable rate mortgages. In most cases they are seeing their rates go up 2 and 3 points resulting in payment increases of 20% to 100%. This round has the potential of being significantly more troublesome because of the fragile state of where our financial system is currently.
SORRY, that was an ugly picture I just painted.
My point is that the stability of many of our partners is going to be tested and no one is immune from it. Currently there are over a dozen medium and large banks that are in the hands of the FDIC, 1 very large title company just filed for chapter 11, 1 of the major mortgage insurance companies has closed their doors and literally over 300 lenders are gone.
The good news is that if you have made it this far, you are probably in decent shape. It is going to be hard as the dickens for another year or so and although there will always be exceptions, most of us are in a retooling and /or survival mode.
Your partnerships and network alliances are the exact remedy necessary to get you through this. Look for alliances with vendors that can bring synergies to the network Think out of the box and bring in people or companies that help maximize your current business model. If you find yourself in one of those relationships where one of the partners is showing signs of trouble or already are have an exit strategy in place.
You have a great resource here on Active Rain. It is always preferable to be prepared than get caught when it is too late to make the right move. This is something that we are all going to have to work together to get through.
Stay Sharp and good luck!
Your ActiveRain partner and national title agent,
Until next time my friends,
LEADING EDGE TITLE SOLUTIONS
Matching experience with technology to give
you the edge to be a mortgage industry leader
Bo Hussung
Vice President of Sales
phone ~ 615-438-7300 fax ~ 678-261-1594
email me ~ bhussung@cogentca.com
web ~ www.cogentca.com
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