FHA and Investor Specialist

This stuff in tongue in cheek, but there is a lot of truth in it.

Actually about half have actually happened, and most of that half occurred more than once.  They also happened in 1998 and in 1994.

Well done!!  It is so true.  My colleagues like it, you never know with some of these investors.

For me it was the FAX machine didn't work twice before the closing.

My favorite was "The underwriters got food poisioning at the company picnic and there will be a week delay." Turned out they were frantically shopping around for another lender.

I had a lender go out of business on me in 1998 when I had a loan cleared to close through them, and vowed to never go through that again.  The irony is that wholesale lenders want financials from a lender/broker in order to do business with them, but never does the wholesale lender provide financials.(Unless they are publicly traded)

What's scary about this list is that I've actually seen some of the items done by mortgage companies in recent months.  We do live in "interesting times."

I was laughing so hard as I read these, i have heard a lot of stories about things like these actually happening!

That is pretty funny.  Kudos.

Truth is stranger than fiction!

Very Funny...I'm sending it to a Lender I work with...do you think he'll think so??

Very funny! But, so true unfortunately!

Joan- Yes, they should find this funny.  All mortgages co.'s have had to deal with at least significant guideline changes as of late.

Great Information. I just wish the AE wouldn't do that stuff to us. Say they are doing fine then there gone

 Ben

Benjamin- I agree. Unfortunately, the AE is usually kept in the dark about the financial status of the company.  They usually find out they are done the same time we do.

That's scary!  I know that this has happened to people.

Yes those are all great points, don't forget the fax machine just ringing and ringing.  It's a pretty scary thing that you can have files working with a company and they close the doors but won't finish the file they have had of yours for weeks.

In 1994, some states and closing companies would allow a mortgage company to send a regular check for closings.  A few companies went under went rates went up a bit, due to playing the market as well as lack of business.  A few closing checks bounced and from then on certified funds or a wire had to be sent.

LOL...good one.  Bit I do feel bad for the Reps who really believe that their company is fine (because they live in a mushroom factory)

Ann- I agree, I saw a posting by one wholesale rep on a different site swearing up and down about the strength of his/her company for weeks, only to see them become one of the first major subprime casualties.

If you are a privately held company, there is no disclosure necessary.  Even to employees.

Oh, such true words.  Not only is it happening on a weekly basis, but it will probably increase in the next few months.

Being a lender, I have experienced some of what you have listed.  It ends up making us look like an idiot when we can't get the loan funded and then later it doesn't get us back into the Realtors good graces when we show them the investor closed their doors.

I got the rug pulled out from under me on some pre-approvals I had done.  I just explained that product was longer available, took my lumps and moved on.  Better than having someone go to contract on an unavailable loan product!

Another one...excuse me if I'm repeating:

Getting an email saying "We're Here to Stay"

 

Nice (but all too sad) post

Jeff

Jeff, good one.  I will add the "We're to stay" e-mail is usually prefaced by a quick offering of condolences to the competitors who went under, then is followed by the lender soliciting the files from the other lender who went under.

I'd say that finding them on http://www.lenderimplode.com/ would be a pretty good indication.  Good list Michael.

Another one that apparently actually happened: Subprime Company runs a ridiculously low rate quasi-A paper "rate special" (and ends up taking a huge loss in the process due to inexperience in "A" paper) in a desperate move to book more business to offset buybacks. 

Great list, Michael. Love the lenderimplode.com link! LOL!!! It's a shame for all the employees that lost their jobs though. Thanks for posting.

The best and longest standing AEs actually tell the truth. My AE from New Century a few weeks before they went down the toilet told me to hold off on submissions.

Eddy

You forgot  11. They starting calling thier customers looking for loan payments on the 3rd and 4th of the month :)

That's funny. But there is actually another way. I was watching the stock price of one of the major subprime lenders. The stock price was falling rapidly each week. It was just a matter of time before the company filed for Ch 11, which it eventually did. I closed a loan for it shortly before it announced that it wouldn't fund any more loans. So another way to tell is, when the title company that hired you to close the loan tells you that you didn't get paid because the loan didn't fund.

Leon and Eddie- True, publicly traded firms have to report earnings etc., and it is much easier to get financial information.  Nonetheless, Wall Street did not downgrade firms like Freemont and New Century until their problems were insurmountable.  Wall Street firms were also buying an nterest in many subprime companies right up until the collapse, proving even Wall Street Insiders did not see this coming.

It is mainly with privately held firms that don't trade on any exchange that do not have to disclose income or fianancials that keeps their AE's and the general public in the dark about their financial status.

I had Silverstate come after my brokerage because the borrower didn't make first payment....Somehow this was in the broker agreement. I should have had borrower pay 1 month perdiem instead of backdating the docs.

Has anyone heard anything about silverstate?

 They did a 90% stated/stated on a 3.2 purchase, they didn't even source the (hard money borrowed) downpay. Credit wasn't good either 654. I knew they couldn't stay in business doing loans like that, even if they sold them off.

 This is my first comment, Im a commercial and residential banker from Los Angeles, and finance just about everything. Look forward to hearing from you,

Marc

Marc, are you a broker or banker?  Typically brokers do not have to buy back loans. Never dealt with Silverstate, but that deal sounds like bad news.

 Out of curiousity, didn't you wonder how the guy was going to make his payments on a 3.2 million property, after having to get a hard money loan to come up with the down payment? 

Hi Michael, Well said this is so true.  I had a closing 2 weeks ago and the lender went out of business the day before.

Great top ten list.  Some of the truth is funny and sad at the same time.  Great post.

Here's an idea I for another I got from a 2006  ad in a National Trade Mag:

11.  The CEO goes on a speaking tour telling people how to adapt in a changing real estate loan market.

Very funny!  Should I be worried that I a couple of these happening right now?  lol

#11. You call the ocmpany and the person that answers says. "What company?" and you know you have the right number...it's on  your speed dial. :/

Funny post, oh so true.

Thanks for the laugh

Scott: Or a borrower "thinks about it" for a few days, then the program is no longer available.  Or you pre-approve someone for a purchase, they go house shopping and the program becomes unavailable.

I have to agree with a previous comment made about a #11...yes calling the customer on the 3rd or 4th of the month is truly a sign there are problems! I guess with all the changes...you have to find room for humor otherwise you will lose your mind. Thanks for the post!

Thank you Mr Letterman.........good job....lol

 

DOMINICK GACCINO

Branch Manager

First Suffolk Mortgage Corp

 

Michael, Great post.. It is so true when the CEO says we are financially solvent... Buh Bye...  But you should have attitude a hiring freeze..

Another one: Announcing breaking ground on a new facility.  I know MLN USA had done that about a 1/2 year before going under, as had I believe someone else as well.

Also, if Chris Hansen of "Dateline NBC" does a report on

"To Catch a Predatory Lender"....

And your Mortgage Broker is seen entering the kitchen of a set-up make-believe client... 

oh-oh!!! 

I would watch it..

 Paul David- That is funny!  I wonder what a real estate agent version of that show would be?

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!

Very funny Michael.  Especially number 3 and 2.  I've got some old friends that worked at Argent in White Plains and all they ever heard was "Everything is fine. We're going to make it."  Then the whole office got canned.  I guess by "We" they met "Not you guys."! = )

Jason 

As funny as some of them sound...it is unfortunate that they are true.

Michael,

Great posting!  There is a fair amount of truth to this.  One you left out is when the company changes the comp plan for the sales people.  great motivational tool.  Go sell more and by the way we are cutting your commissions.

 

David

David-Good Point!  Many times a last ditch effort is to cut commisions or "revamp" the cmp plan for AE's.

#11  You call the 800 number the CEO answers the phone.

Great post, I have ideas flying through my head like crazy.

Laugh while you cry :)

Not sure whether to laugh or cry either!

Laughter is the best medicine!

This still is relevant and I am sure there are plenty more things to add to the top ten.

Michael,

Your list is great. One of the better ones is the Google search putting them on the implode site. And their threat to pursue legal action if you talk about them. That's a classic. And that we are sound from many different mouths.

 

Great List Michael! I had a subprime loan closing earlier this month and you bet I was panicked when I tried calling the lender several times and got a 'this line has been temorarily disconnected' message. Scary times!

Michael:  Several of the comments on your post talk about laughing as they read your list, and mentioned that much of your top ten were "tonge-in-cheek."  I am thinking that just about all of your top ten are true to some degree.

I think much of the current mortgage "situation" is a result of both the eagerness of many CA and AZ investors to gobble up "bargains" in other markets, and the accompanying eagerness of lenders to investors to do the same... thinking the years of double-digit home price increases in "their" home market areas was also going to happen in the market areas in which they were gobbling up "builder specs."

A very sad story for what was very ill-advised for many of those above-mentioned investors.  The best rule of thumb... What Seems Too Good To Be True, Often Is!

Yep, that all sounds pretty familiar.   Also sounds like a blueprint for every one of the lenders that "imploded".

Karen- The current market mess received contributions from everyone who profits from a real estate transaction and resulting mortgage from the consumer, to real este agents, to mortgage brokers, to mortgage bankers, to wholesale lenders, to warehouse line providers, to Wall Street Securitizers, and to everyone else in-between.

The funny thing is that mortgage brokers are the easiest ones to point a finger at, but ultimately its Wall Street that determines the flexibility of loan guidelines based on what loans they will ultimately purchase.

There really is a lot of truth to your post.  Funny...but true.

You forgot

• The AE returns your calls RIGHT AWAY
• Your underwriter ask you what other lenders you use

Good List!

Words of wisdom, albeit humorous

Your words are oh so true!

all too true -- my listing was set to close 3 weeks ago - the lender closed their doors just before we were going to settlement.  Now, 3 weeks later, we're rescheduled to close this coming Friday -- I'm holding my breath and crossing my fingers that this lender will keep their doors open!!

 

Thanks for your post - humorous, but true!!

You forget the best one... The signature line from your account executive forwards you to his new MLM/Network Marketing site.

 

 

 

Good post!  Even better comments!  Even though I'm laughing, I know I'll be keeping my eyes out for these...

BK

GREAT POST , IF IT WASN'T SO BAD , IT WOULD BE GREAT COMEDY

The sad thing is many of the executives of defunct lenders will end up creating new companies or land executive jobs new mortgage companies, but most of the employees will have nowhere to go.

How about #11: The CEO is disturbingly tan and has sold tons of his stock in the past year?

Pretty funny list...how about"Wholesale Lender harasses you about deal you might have 'to get it funded asap'"?