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We're
living through some interesting times in
our industry. First, the passage of the Housing
and Economic Recovery Act of 2008
(Public Law No. 110-289) was a very good
idea, it will help a wide-cross section
of Americans in so many ways (I
translated it from Lawmaker/legislator
back into English over a 3 week period
in my Blog
during August in case you don't want to
read the seven inch stack of paper
containing all the words in that
legislation); it enabled the subsequent
take-over (and a $200 Billion 'cash
injection') of Fannie & Freddie
which was long overdue (gotta straighten
them out, they both been plagued with
scandal and 'looting from within' for a
decade), and THAT keep the CEO's of
Fannie & Freddie from leaving with
Big severance packages (they tried to
get out of town with $25 Million, but
110-289 stopped that).
 Because
of the heavy risk AIG has in
insuring-backing many mortgage
instruments (CDO's, MBS, etc.), they
would have made a much bigger mess in
our economy had they failed, they
were/are too important to fail
(plus all the Government did was make
them a BIG [well secured/
collateralized] loan). Given what's been
happening in the credit markets, all of
this was necessary ....
Today's $700 Billion capital markets
stability deal (TARP) now re-named the Emergency
Economic Stabilization Act, Hank
Paulson is trying to put together with
Congress, it will make capital flow once
again (in a lot of places here and
abroad), but especially in the mortgage
finance sector (that's been choking
lately) ... and THAT'S real good for
homeowners and everybody in our
industry. We'll get through this, and
then on to long over-due regulatory
reform.
If you are on the origination/production
side of the residential real estate
mortgage lending industry yourself, you
may very well know the sort of
individuals who can help with this mess.
The single biggest issue facing the
Treasury Secretary and all those that
will vote to make his proposal (as
modified) into Law over the next couple
of days is … HOW to value those TOXIC
assets. Although that is merely the
first step, which will be followed by
who and how to ‘hold’ them, the
‘wisdom and timing’ necessary to
off-sell them at a later date, plus the
‘re-regulation of the oversight’
that we all saw was lacking the past
several years (we don’t need any new
laws - what we need is ENFORCEMENT AND
AGGRESSIVE PUNISHMENT of wrong-doers who
violate any of the 253 laws that
regulate our industry already) … all
of those challenges and others, will
have different skilled player needed, so
those tasks can go relatively smoothly
… but back to Today … WHO’S the
sort of individuals the TARP people will
need to leap over this first hurtle?
Lower, mid-level, and administrative
supervisors - those who have been in the
trenches - who have been in residential
mortgage underwriting for most of the
past 10+ years (definitely since before
the Aug ‘98 correction) and those with
residential mortgage servicing
employment during this same period, are
the exact types that will be needed to
work and guide those who are attempting
to Value those Assets, so a sensible
number can he offered to sellers and
backed up by the logic of knowing the
facts at the level of the people I
encourage the TARP folks to engage.
If you know people like these, I
strongly encourage you to influence them
to make contact with their Congressional
representatives, send their Resumes in,
and follow through so they get
considered as resources of Country needs
to help get us all out of this mess ….
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