New Subprime Player - Want a Name?
OK, it's time for a little self-deprecating humor for those of you that don't know my witty side ... here goes ... guess what a genius I am!
In this article immediately above, I talked a little about a new business paradigm and subprime wholesalers a bit, and in several previous pieces here in my personal Blog, I refered to them, have said they're here now, BUT you just don't know what they are! Well guess what? Want a NAME?
Now comes the "Genius" part, I actually READ THE WORDS regularly in several industry publications (you've only heard me tell you to do that - what - about 10 dozen times or so?) AND because I've 'been there and done that,' I often can recognize stuff others might miss.
So ... today I'm reading my dead-tree (paper) version of the National Mortgage News (my favorite industry publication for nearly 30 years, comes out every Monday) --- and low and behold --- on the front page is an article about WL Ross & Co. LLC (a name you'll all hear a lot about soon); who last year purchased the servicing platform of bankrupt American Home Mortgage, Melville, NY and last week they closed on it's $1.3 Billion purchase of Option One Mortgage Corp, Irvine, CA (a $55 Billion servicer of non-conforming paper).
TRANSLATION: Many of you have heard me say for several years, that the serious money in this industry is NOT as a Mortgage Broker, but as a Mortgage Banker Seller/Servicer. Over time, the stable servicing income out paces origination income many times over; this I know from several decades of personal experience from my own company.
CONCLUSION?: WL Ross & Co. LLC is clearly gonna be one of the next generation subprime wholesalers, on that you can bet your future career (says me, that 4 decade subprimer dude you know).
In this article immediately above, I talked a little about a new business paradigm and subprime wholesalers a bit, and in several previous pieces here in my personal Blog, I refered to them, have said they're here now, BUT you just don't know what they are! Well guess what? Want a NAME?
Now comes the "Genius" part, I actually READ THE WORDS regularly in several industry publications (you've only heard me tell you to do that - what - about 10 dozen times or so?) AND because I've 'been there and done that,' I often can recognize stuff others might miss.
So ... today I'm reading my dead-tree (paper) version of the National Mortgage News (my favorite industry publication for nearly 30 years, comes out every Monday) --- and low and behold --- on the front page is an article about WL Ross & Co. LLC (a name you'll all hear a lot about soon); who last year purchased the servicing platform of bankrupt American Home Mortgage, Melville, NY and last week they closed on it's $1.3 Billion purchase of Option One Mortgage Corp, Irvine, CA (a $55 Billion servicer of non-conforming paper).
TRANSLATION: Many of you have heard me say for several years, that the serious money in this industry is NOT as a Mortgage Broker, but as a Mortgage Banker Seller/Servicer. Over time, the stable servicing income out paces origination income many times over; this I know from several decades of personal experience from my own company.
CONCLUSION?: WL Ross & Co. LLC is clearly gonna be one of the next generation subprime wholesalers, on that you can bet your future career (says me, that 4 decade subprimer dude you know).
posted by Secret! at 11:28 AM
2 Comments:
Now I'm feeling old...
Definitely good news to all of us. It is making a come back.
Now I feel old: I used to work with Tom Fidler, who owned Chicago-based Legacy Financial which merged with Chicago-based First Home which then American Home acquired in '99. Fidler was a veep at AHM and last I heard was considering moving to CFC.
Am I right on this WL Ross is none other than Wilbur Ross? He's been on the move for about a year now: (http://www.businessweek.com/bwdaily/dnflash/content/aug2007/db2007088_157817.htm)
He is in complete agreement with you, SECRET!, on just about everything. Of course, Ross is going to downplay his beliefs in front of the microphones. After all, he is arguably one the savviest investors around, and he is putting his chips on our number!
On-the-other-hand (President Truman is quoted as insisting that his staff bring him a "one armed economist" because his economic advisers would re-qualify their statements with the preceding), Ross has some pretty deep pockets and said back in summer '07 that it was going to be a rough couple of years. Sure, eventually things will even out, but as John Maynard Keynes used to say, "In the long run, we're all dead...".
Then again, maybe I spent too much time paying attention in school...
Thanks,
-l
Happy you liked this piece, I see your name is "-l" and I'm sure that has meaning, love to hear that story!
Far as getting old, at my grand-daughters game week before last week end, my oldest (he's going to be 41 this coming Monday) said that same phrase to me, "ya Dad, I think I'm starting to get old!" - you can't imagine how funny that sounded to me ... it seems like it was only last month when he was just that high (holding my hand out at my waste) and in Little League!
You've heard the phrase, 'those that don't pay attention to history are doomed to repeat it' -- well, to paraphrase that ... if you know history, and I do, you generally aren't as scared as the next guy when predictible things happen.
Tomorrow I'll tell you a WHOLE LOT more about the secondary ... stay tuned!
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