The Current Mortgage Industry

I have been in the mortgage industry for 25 years. When I started, rates were 16.5%. Now rates are 5%. I lived with and through the real estate debacle in the late 80's and early 90's. The nightmare we are living through now however is the worst.



Alot of the problem now is the fingers pointing in the wrong direction and mis-information about the causes of our current predicament. One cannot broad stroke this blame on the Sub prime mortgage failure. I have worked both the retail (for the consumer) and wholesale (for the lender) sides of this business. Sub prime, by itself did not cause this. A new category of loan products evolved from greed and lack of fore-thought. Alternative "A" loan programs offered:

• 100% financing
• up to $1MM
• with 620 credit scores and
• Stated income (no income documentation).

On no level did it make sense to lend someone $1MM without a down payment when they didn't prove their income. This type of loan brought many opportunists into the market that flipped properties and profitted while they caused false ceilings on real estate values.

So if we isolate the main problem on these 2 reasons for failure, it becomes a little easier to make the right adjustments moving forward. Legislators have clumped it all together and called it a Sub prime mortgage failure. The fact is, we offered Sub prime loans for 30 years and before these new loan programs evolved into high risk insanity, they performed with certain consistency.

The fallout now includes:

• An appraisal ordering system that allows or invites low quality cut rate appraisals that stunt growth
• Banks that have tightened credit which also stunts growth
• Banks that have received bailout money from taxpayers
• Government bailouts and takeovers of the previously government sanctioned secondary mortgage market monsters Fannie Mae and Freddie Mac
• $111 Billion to date to Fannie from Taxpayers
• Rates are low, Fees are high
• A realization that the Mortgage Industry needed a makeover.
• Blame for this horrible Financial Time should include EVERYONE that was involved.
• People who would like to own a home again or for the first time, stuck on the sidelines
• A real need for fresh ideas

I have gathered some good people together and its really time for a Mortgage Revolution. We are looking to implement new and fresh answers to making loans which make sense. New Generation Lending is a wholesale lending company that will use their own proprietary guidelines. We are a start-up with the answers that will make us an Industry Transforming Legacy.

A friend of mine suggested that people are always looking for something out here in the keyword universe. Maybe one of you who reads this will know someone that would like to be a part of the replacement for Fannie Mae.

We are looking to change the industry with private equity investment in our intact Mortgage Pool Offering which will deliver the lowest Prepay Risk in the MBS market due to our proprietary risk management and servicing abilities. So, if you're in the mortgage business and would like to make a difference starting something new or if you're an investor that wants big returns, look me up.