Secrets from Secret! University

We've Moved This Blog!

2008-05-24T13:17:00.000-07:00

This blog has been moved to our main website, you can click this to visit at our blog's new home:
http://americasmoneycenter.com/blog

Long Week-End

2008-05-23T09:53:00.000-07:00

For all my fellow Veterans, have a nice Memorial Day holiday!

Just about 10 days ago, I decided to move this blog to our main website, utilizing WordPress, as I have seen and heard many positive things about that blog software/system. So I download it's software to my hard drive and discovered I am not skilled enough to install it; began a search for someone to help me, found a great guy in Canada to do it, but first had to upgrade our old server to be able to accomodate WordPress requirements -- that bagan the saga!

For the last nine full days, I have been wrestling with our Host (been with them since 1999!), since the site move to their new server had troubles. Evidentially the new spiffy Linux Developer Series server/box was/is faulty ... result? Our main site's been off and online ever since, PLUS the Canadian guy 'quit' out of frustration trying to install WordPress! I hope to get him back, since I'm right now, changing host's to the firm he recommended in the first place!

Thankfully with all this down-time on my hands, The Mortgageland Journal's June 1st edition has been completed and is ready to go, plus our May 17th Secret! Master Seminar was well attended (next scheduled for August 16).

The Teaming Masses

2008-05-19T13:31:00.000-07:00

Along with the teaming masses, yesterday my brother and I went for an air conditioned Metro Rail Blue Line train ride from Long Beach to downtown Los Angeles at Noon for lunch at World Famous Philippe’s; then on the subway from there under Wilshire Blvd to the end in that direction. It was a lot of fun, especially since when we got back to Long Beach it was 92 degrees at 4PM, and 94 degrees @ 4:15 when I got back home to San Pedro ... WordPress coming soon.

Moving To WordPress soon!

2008-05-15T13:02:00.000-07:00

I've become convinced that it's smart for me to move my Blog from it's current blogspot location (where you are now), to right inside our own main website http://www.americasmoneycenter.com/ - for the past 2 days I've been learning about 'WordPress' and upgrading our server to accomodate this blog utilizing WordPress along with it's bells & whistles on our site.

I've discovered, I've become used to the theme (colors, etc) of this standard choice I had when I started this Blog a year ago. I've liked it from a branding viewpoint, it's similar to our main website. With WordPress, there's a Zillion choices to select from (maybe a HOT Pink would be nice?), looking at them one at a time and my brain's RAM memory is almost full!

You'll notice some changes soon, but I won't trick you -- you'll get plenty of warning!

Secondary Market - Follow Up

2008-05-13T09:51:00.000-07:00

As promised this morning I'm going to reveal some immediate instant gratification information about this hot topic, along with some long-term sound career advise, that will earn you many hundreds of thousand of extra dollars IF you follow it (it did for me).

First off for the immediate. Contact the California Mortgage Bankers Association (cmba.com), and pay the money for your entry into their July 9-11 Western Secondary Market Conference in San Francisco. For non-members of CMBA, before June 9 it's $459 and after that it's $509. I myself can unconditionally guarantee you that anybody you know, who's been a mortgage banker for longer than 20 minutes, will tell you this is the premiere conference on this subject in the entire Nation. I started going to this way back when I was a mortgage broker, its helped me grow-up my career; I attended probably two or 3 dozen of them and I know you should too!

Here's what happens there ... you'll attend this and that session on a few of the topics which interest you, you may make a new friend or two ... BUT you'll take the time and slowly walk around the Exhibit Hall and you'll see and speak with every single secondary market player in the Country - they'll all be there looking YOU right in the eyes!

The education you'll get will startled you - once you see the magnatude of this industry that's been over the horizion to you, so far.

Now for the Long-term: I saw the ad for this in the latest National Mortgage News newspaper, which I have been reading every Monday edition for almost 30 years, (1). You need to subscribe to it and READ it carefully 800/221-1809 it's $259 yearly. Reading this will give you a much more well-rounded view of your own career and where it can go. (2). Join and attend (at minimum) the Annual Convention of the Mortgage Bankers Association - you'll be equally stunned at what you can learn there, I first joined them about a year before my own company evolved into a mortgage banker and was a member for a couple of decades after that.

These simple things, read that particular industry publication, go to the Secondary Conference mentioned above yearly, join the MBA and go to it's annual convention and you'll GET SMART!

Mortgage Brokers & Their LO's Charge More

2008-05-12T09:29:00.000-07:00

This morning, I finished off the paper I referred to yesterday, and I saw this:

In one recent major study by the Center for Responsible Lending (CRL) of 1.7 Million individual 30 yr fixed subprime mortgage loans originated between 2004 and 2006, it revealed borrows pay significantly more for getting a loan from a mortgage broker as opposed to a retail lender. In fact, the typical borrower pays $5,222 more during the first four years of a $166,000 mortgage compared to a similar borrower who received a loan directly from a retail lender (TRANSLATED: Higher Fees & Higher Rate due to YSP). This study among others, cry out for the complete ban on YSP’s being paid to mortgage brokers. It’s co-author said, “… there is a need to remove incentives to mortgage brokers that do not correspond to borrower interests ….”

When you see article after article, after article like this ('cause I do), what does it make you think? Is it possible a Federally mandated real fiduciary duty to customers by originators is long over due (although it has become Law in more than a dozen States this past year or so), or are news pieces like this just like kicking a dead horse now?

My feelings? Facts like this are no surpirse to me whatsoever, most of you have heard me screaming about this for a long time ... but today I honestly believe a most honest people know in their secret heart of heart this practice is/was absolutely true, and that it was stupid ... AND that it contributed to the mess we have now. HOPEFULLY, those that agree with me, will try and do something about this during this cycle. Widespread YSP (from my viewpoint of many years in the biz) has been a new thing, an is just over a decade old ... mortgage brokers and their LO's don't NEED it.

New Subprime Player - Want a Name?

2008-05-11T11:28:00.000-07:00

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).

My Prediction – A Case Study

2008-05-10T16:06:00.000-07:00

It’s sorta like John McCain telling us ‘we may be in Iraq for 100 years,’ when you take data out of context, you can make it mean anything.

It’s like what one of our readers said to me a couple of days ago. He was an LO who left the business, similar to the stampede that entered during the Gold Rust days of the last cycle, but in the other direction. He’s considering jumping back into the industry, and asked me what I thought about that. He’s a pretty intelligent young man, he pointed out to me, he closely follows ‘The S&P/Case-Shiller® Home Price Indices’ who have reported the value of residential real estate held by households and non-profit organizations totaled US$ 22.4 trillion in 2006, so it’s real big. These indices capture and measure a vast and largely untapped U.S. housing asset class, and are designed to measure the change in the price of homes that have not undergone significant changes in quality. So, he strongly values them.

BTW, in April they reported Feb results, where there was a steep decline in values, and he said to me they’ve indicated the housing market will take something like ‘10 years to rebound.’ He’s also heard the secondary market is a real mess and his former friendly yet irresponsible non-conforming funding sources are all gone. Therefore I could hear in his voice, loud and clear, he’s worried about feeding his family!

Given that focus on two (2) seriously important factors, he’s scared to return to the residential real estate mortgage lending industry, as a self-employed mortgage broker. He’s not alone, I’m sure.

Now for my perspective today, yes I agree timing is vital and it looks like a moving target on the surface; in my view it’s not … consider these pieces of industry publication news and information:

In a blog posting I made two (2) weeks ago - http://americasmoneycenter.blogspot.com/2008/04/secondary-market.html#links - I pointed out, that contrary to what the press and more specifically industry publications seem to be focused upon, (between January 1st and March 31, 2008) there was $323,338.1 (in US $ Millons) securitized (that's well over a Quarter of a Trillion Dollars) in 'non-conforming' production! … so, NO the secondary market for non-conforming is not dead, it’s sick and yes a train wreck, but the end of the world is not at hand.

In June we had “Brokers Turning to FHA For Loans”: http://americasmoneycenter.net/phpBB2/viewtopic.php?t=1551

Then in August we saw “Brokers Migrate Back to Prime” http://americasmoneycenter.net/phpBB2/viewtopic.php?t=1574

We all intutitively know, mortgage bankers/ mortgage brokers and Loan Officers are skidish about where to turn, what to believe and which ‘guru’ to believe, given all I see myself, that surely doesn’t surprise me.

And let’s not forget the oft quoted ‘Bureau of Labor Statistics’ who tell us the overall industry is now down to 360,000 ‘Mortgage Bankers and Mortgage Brokers’ – even though HUD (inside it’s latest RESPA proposal says at year’s end we had more than 600,000 workers in the business). OK then who’s right? Consider this (use your own common sense) we both know there have been a lot of unlicensed originators working for net branches, etc., we also know the vast majority of employers (unlawfully in most cases) pay their LO’s via 1099 and not W-2, so both the Labor Dept and HUD stats simply couldn’t be correct, and in my opinion, not even close! BUT, yes a whole lot of people have left the indsutry; but I know you can lie with ‘real’ numbers and slant them to mean anything. So, yes lots are gone, we all agree that’s good for the biz, and more will come and go all the time, since that’s the nature of this business – say my 40+ years in it.

On, so now that I’ve ran far afield to provide you with several of my random thoughts on some of the circumstances of the industry today, and of course I read on the conforming side Fannie, Freddie, and the MI firms are clamping down hard as well (‘cause they’re supposed to be conservative!). Let me please say, you need to read a whole lot of industry publications to soak in the whole picture, which is in part some of what I’ve tried to do today for you (I’ve got another 10,000 words in my head about all of this, but too lazy to type them all out, and it would bore you to death anyway)!

Things are a mess, conforming will get uglier and stay tight for a little while, before they come to their senses (after being pressured by legislators soon to loosen up, and fulfill their Congressional mandate to be a viable secondary market for the Nation’s conforming lenders and ‘Stop Pushing Away Good Loans - http://americasmoneycenter.net/phpBB2/viewtopic.php?t=1709
), FHA will not be the end all of everyone’s subrpime dreams … and not nearly as wreckless as the last decade – more new subprime/non-conforming wholesalers will emerge THIS year and the bottom of the housing crisis will start to reverse THIS year.

You know that old saying of your father’s or your grand-father’s … “been there done that” – well, guess what? I’ve been there and done that, the punishment portion of this industry wide correction/cycle (just like the four I’ve been in the middle of) is coming to a close, and it’s on to the new paradigm way things will be done this pendulum swing in the opposite direction from the last cycle/swing.

So if you’re like this former LO I’m speaking about, or if you’ve stayed in the biz during these tough times, and you feel that you would be a credit to the industry to continue on Ethically with your career, then it is my pleasure to welcome you back, or to encourage you to stay.

FHA Approval In!

2008-05-09T15:18:00.001-07:00

Today we got word that the long awaited FHA Approval for our affiliate Loan Officer Opportunity Program, has finally arrived. Over the last several months we have had scores of inquiries asking when this would take place; we're pleased it happened today. It's my guess, once the boss returns from his overseas vacation at month's end, the FHA portion will be rolled out; if not then, shortly thereafter we anticipate. Many of you know, we have endorsed this organization for more than six years. I know them to be honest, genuine, and all they purport to be; financially strong and no 'tricks' unlike many other similar type opportunities available.

Siete de Mayo!

2008-05-07T09:30:00.000-07:00

Here in So Cal this is a big celebration, as today's my Birthday! Leaving in 20 minutes to go to see our Los Angeles Dodger's end a three game winning sweep of the New York Mets. Our team's in second place here in the West, and is looking real good for a strong pennant run again this year; especially with our new Manager.

Looks like that HUD RESPA propsal is dead on arrival once again, even with all the hard work that was done in their attempt to be fair and well balanced with the modifications they suggested. I myself would like to see far less new regulations being enacted, and instead a warp-speed increase in aggressive punishing enforcement of the many laws that are on the books already. We've had too many people who didn't know things they were doing was unlawful, and far too little publicity reporting enforcement, that would have not only detered some folks, but enlighted more as to the rules we/they should operate by - heaven help us their bosses didn't help much in that vain at all.

I see that 'education' side the most important, from all I've seen and heard ... and I'm trying

I'm Becoming Hopeful

2008-04-30T11:07:00.000-07:00

Beginning our series "Industry Checks & Balances" this month in the May Edition of The Mortgageland Journal - titled The 3 Legged Stool (the story of what a good loan approval credit decision is all about), my mind's been exploring several sectors I plan on speaking to in future issues. As I've been focusing on these topics, I keep getting reminded about the many positive signs I see each day too.

In addition to a wide range of industry publications I read regularly, for more than 8 years, I have been a religious reader of at least a half dozen industry discussion boards, some of you know I have also participated in posting to many of them as well. Behind this activity of mine, I have been able to suppliment what I have learned directly from current and past students of Secret! U - since these boards support many thousands of fresh remarks/questions, thoughts, etc. all about what people on the street are thinking and doing. The result of this research of mine, is I have been able to keep a 'fresh and well rounded view' on the true nature of what's happening, far more than a narrow view from only our students.

Lately I have noted a significant increase in sound attitudes from many many posters, they're beginning to display the sort of mind-set which I know to be the one they must have to continue and have a long and successful career in the industry. Previously, far too many of them were seriously ignorant questions (scared me about the level of brains their bosses had/or should I say didn't have) and remarks about their vision of their own job activities, and the industry as a whole. The one that I really have gotten a big kick out of is when someone would add ... "... there are no stupid questions ...." (because their surely are!) I would be laughing out loud normally at that point. But today, most of these are (finally) gone, and what's we're left with are thoughtful and knowledgable people! THAT'S GREAT NEWS. (translated: It looks like most of the riff-raff are gone).

AND, for those of you that know me, you know I LOVE to help people who want to learn and grow, I've always been attracted to that type of employee, student, client, biz associate. So, I'm getting exicited about the near term future of our industry and the fine people that appear to be the ones left standing!

3 Legged Stool - What's a Good Loan?

2008-04-25T11:35:00.000-07:00

Beginning our series "Industry Checks & Balances" - at it's core are reliable credit decisions. In an era where most on the origination side know little about how sound credit decisions are arrived at; due to the advent of credit scores and matrix's of scores vs LTV vs DTI ratios, this issue is critical for the long term survival of individual careers and the industry as a whole. We'll explore most of the necessary 'checks & balances' over the next several months.

Sound credit decisions are based upon the 3 Legged Stool custom - NOT ON A COMPUTERIZED CREDIT SCORE ALONE. Character, Capacity & Collateral - it is just that simple, yet that complex. As in a three legged stool, the stronger each leg is, the more solid and reliable it will be.

In a nutshell ...

Acceptable Character is basically a detailed analysis of the credit report of an applicant, along with their stability of residence and employment. On balance, there is a scale here - from top-notch gold plated all the way down to lousy. The further away from lousy, the stronger that leg of the stool is. And, this one is considered the most important leg by many long experienced credit grantors (like me BTW).

An applicant's (proven verified long-term historically stable) Capacity to good lending decisions is critical, as it is essential any new customer has the ability to repay their debts. The Character leg's strength tells us their willingness to take care of their obligations in an acceptable manner. This Capacity leg however, measures their capacity - their ability - can they afford it? This leg of the stool needs the support of a likely reliable and steady available future income stream so the customer has the funds to make timely payment.

The Collateral which secures the transaction is the third leg of this three legged stool. Obviously, the more security which collateralizes the loan the better, and the stronger the stool will be. This is thought of by many however, as the least important leg of the stool, as it can lose value and is not always of satisfactory quality/marketability, or accessible, upon default.

With two sturdy legs for our stool, with only one weaker, even though not ideal, is still an adequate formula for a more conservative loan approval. Two of the legs weakened is generally a recipe for disaster. Having all three of the legs fragile at origination, barring a miracle, is most certainly a future loss.

An ingredient missing from the recent training regimen of most employers in our industry, is teaching this concept to all personnel. Sure, processors may get a small bit of it via osmosis; naturally underwriters and institutional investors should all be intimately familiar with this sort of thinking; yet it is our observation far too many of them are not. All too regularly, unfortunately mainstream Loan Officers don't have the first clue what it's all about. They see themselves as sales experts - closers, and regrettably not loan analysts as they should be. Yet those very LOs are the face of our industry to nearly everybody outside the business!

It's time for them and everyone else to understand what a good loan is.

Who Do You Think You Are, Anyway?

2008-04-22T09:46:00.000-07:00

I want to tell you who I think you are. I think you're a true industry professional looking to improve your own career, with good morals, sound ethics and admirable integrity as you engage in your activities here in the consumer residential real estate mortgage lending industry (or you wouldn't be among the Friends of Secret! University readeship). Further, I'm reasonably sure you joined our industry since August 1998.

Given your years in the business, being raised somewhere along the timeline and the environment of the Aug.'98 to Dec.'05 cycle ... that gives you certain characteristics which differ from the people who grew in the cycle before that time - the '88 to '98 one, or those of us who entered the industry well before that (BTW, I hope you saw the September 2007 newsletter, it contains one of the best pieces I feel I have written about my eye-witness account of the last four (4) 'corrections').

Right now, you're enjoying the initial cleansing period, a sort of 'punishment phase' of today's overall cycle - that began in late Dec.'05 until ... (my guess 10 years in length) - the much shorter harsh 'punishment' portion of this new cycle should be over shortly, by the way.

Therefore considering your entry and exposure to both conforming and non-conforming loans during that period, your 'take' on what's needed today by you and others of your industry generation, is far less limited than say, mine.

At Secret! University, we pride ourselves on having a comprehensive mortgage education and training instructional curriculum, where you can Reach Higher because We Do More!

One such method of providing certain mortgage lessons, is via our CDs. Below is a listing of what's available today:

Emerging Mortgage Banker 101
LO Orientation 101, 201 & 301
Working at Home Originators 101
Secret! Resource Guide 101
Commercial Loan Brokerage 101
Advertising 101
Personnel 101 & 201
Going Out on My Own 101 & 201
Subprime 101 & 201
98 Ways to Find Customers 301
Superman's Cape 301
Lesson for the Times 301

We're open to your suggestions, made to order tailored projects, etc. Today I want to ask you to please let us know, which additional CDs do you think we should offer. Are there other topics you feel you and your friends in the business would like to pick up from us, if only they were offered. Help us expand the CD lessons we offer

Secondary Market

2008-04-20T10:13:00.000-07:00

OK, let's focus for a minute on the period Jan 01,2008 until March 31,2008. During that period, we all have been reading that Fannie & Freddie have continued to purchase 'conforming' production, just like in previous years (although quality standards are being properly tightened here and there), but as a secondary market for lenders for 'conforming', they're still there.

Now so I can be clear, if it isn't 'conforming' then it's 'non-conforming' do we all agree on that? Non-conforming over the years, has been labled B/C, Atl-A, subprime, and now (the latest cutsie phrase), non-prime. And, further the industry and the general press have been telling everybody who can read, things are being screwed down tight in this sector (long overdue I know you agree), and that the secondary market for this sector of production (non-conforming) is completely gone.

This week, I finished up our May 1st edition of The Mortgageland Journal, so I got a bit behind on my reading. But this morning, I did finish my April 14, 2008 edition of the National Mortgage News dead-tree paper weekly newspaper (which some of you know I have been reading weekly for 30+ years - it's been my favorite). Guess what chart's on page 16, bottom left?

The chart is titled U.S. Asset-Backed Securities and it lists the top 14 issuers ... folks like, Countrywide, UBS, Bear Stearns, HSBC, Washington Mutual, ABN AMBRO, General Mortors, etc. These folks securitized (in US $ Millons) $323,338.1 ! That's well over a Quarter of a Trillion Dollars in 'non-conforming' production!

So ... it ain't dead ... don't let the hyped-up press fool you! It's a mess, yes, but not dead.

Yesterday was Tax Day!

2008-04-16T14:25:00.000-07:00

I hope you all got your income taxes prepared, and sent in your checks to the Government, so they could send the money over to Wall Street to help bail out several of the bad actors there!

Finished up our May 1st Mortgageland Journal newsletter this morning, looks like it's gonna be a good one. The lead article is a repeat of my '3 Legged Stool' piece authored last year; detailing what a good loan looks and smells like, since many in the biz still don't khow. In the newsletter, I also plugged in a small handful of keyword/phrases that link back to our #1 Ranked position in Google - might get some remarks from it (in my brain - the jury is still out on whether or not that's a good idea).

In case anybody has a comment about my Housekeeping - Follow Up post of the 4th, I would still appreciate a comment here, or private e-mail if you like.

Press Release - Encouraging Signs

2008-04-07T10:16:00.000-07:00

In case you didn't happen to see what we issued this morning, please take a look at it on our main site's Press Release page.

Housekeeping - follow-ups

2008-04-04T11:52:00.000-07:00

I promised you stats on Subprime, in the article about it's future, you would have noted that back in 1998 1,021,676 individual transactions were funded and in 2007 it was 933,480. What's somewhat interesting about that, is there were 300% more workers in the industry in '07 then back in '98 ... so people definately worked a lot harder before!

On the issue of our Seal of Approval, so far I've received only two suggestions, if there are more out there, please send them in to me!

The Linking our Website back to certain Search Engine Results issue, so far is TNTR (too new to rate). I ended up placing seven different keyword/phrases on four separate pages of our site - all linking back to the search engine results of Google & Yahoo (where we are ranked #1). On our main/index page I also had included ask.com (where we had the top four slots) on this major industry key words phrase 'mortgage industry education' - yet the ask.com results I have seen change three or four times since I did that (checked 30 seconds ago, and there we are back in the top positions again), so I have left off the link to ask.com for now. What the ultimate marketing value of this novel idea will turn out to be, is anybody's guess at this point.

As to our Master Seminar May 17th, at this point I am skeptical about the degree of turn-out, still maybe too many people staying close to home and saving every penny ... we'll see.

Future of Subprime

2008-04-01T10:09:00.000-07:00

A few weeks ago, I gave you a little on this subject and later promised to come back with some stats! Well, today the following article was published in The Mortgageland Journal's April edition (in case you still don't get it directly into your own e-mail Inbox):

Future of Subprime

I frequently read a handful of industry discussion boards, and post on some of them from time to time, as some of you know. I see this particular question being asked and discussed often, so I thought I would take a stab at it this morning for you.

Based upon what I read, the conventional wisdom seems to be that it will 'come back' (like it was the last several years) and that it will probably take a dozen years or so to do that. That 'conventional wisdom' I speak about, looks like it's coming from people who joined our industry during the last industry cycle Aug '98 to late Dec '05, so in my view they lack a clear picture in the broader context of the business.

I want to give you some of it's history, so you'll have a well-rounded view of the horizon. Subprime, formerly called B/C paper and/or 'non-conforming,' began in 1914 (with my initial industry employer and others). As an eye-witness, I know it was a around in 1966 when I started as a twenty-something LO. Fannie Mae and her snot-nosed step half-brother Freddie Mac (labeled 'conforming') began in 1972 and BTW, I went to their baby showers, etc. and drank a lot of beer!

Since then, Fannie (FNMA) & Freddie (FHLMC) - let's call them by the initials they like to use these days "GSE's" - during their history have stumbled badly a couple of times and ONLY because they are Government Sponsored Enterprises, they haven't exploded all over everybody like 'non-conforming' has a couple of times (but been real close).

The way in which 'non-conforming' was done - 'originate to distribute' - during the last 20 years (not before that), and especially the reckless way it was handled the last decade, is at the core of what it's going through, and what you all have seen recently.

The last full year of originations before the Aug.'98 to Dec.'05 cycle when rates plunged and home values soared to the heavens, give us a production volume of $65.693 Billion for Subprime's 1998 annual total. While the 2007 annual total for Subprime was nearly three (3) times that at $181.289 Billion, and as has been reported just 2 weeks ago on the front page of the NMN, "B&C Vanishes as Volumes Fall to 7-Year Low."

News reports from December '03, were reporting that a Mortgage Broker shift to Subprime had started, 'conforming' was off by 1/3. Therefore, for the 5 year period 1998 through 2003, mortgage brokers (60+% of the market) were concentrating on 'conforming' loans; then subprime took off like a rocketship, only to slide backwards significantly as we moved into the current industry correction.

I sware, I'm not trying to make your head explode. Actual number of individual loan transactions closed/funded in 1998 was 1,021,676 – 2007 it was 933,480. So, back in 1998 (we worked harder not smarter), we closed more individual transactions, and made a whole lot less money for our troubles!

It is my observation Subprime it will not be back like it was during the '98-'05 period (ever again), but IS back (if you thought it left) right now ... only YOU don't know who the players are, and who the big-shot players are going to be (nor do I) ... because they are starting/building/growing/ developing, etc. right as we speak. It's my sense going forward they will operate nearly as they did during the period immediately prior to the start of the last cycle in August '98 with annual production totals for the next several years (about 1/3 of today's numbers), and similar to that period.

Our Seal of Approval

2008-03-28T12:58:00.000-07:00

By now, reading my thoughts here in my own personal Blog, I'm quite sure you can tell my attitude towards a lot of things in our industry. I bet - whatever the topic or issue - you could most likely guess what I would say about it, most of the time, couldn't you?

Today I'm asking you to please let me know which organizations, industry supplier vendors, etc. which you feel would enjoy the 'endorsement of Secret! University' (again, you probably know who/what I would favor already). Maybe you work for one of them, or you work closely with one or two, that would be good candidates for us to consider.

You could have them contact me directly, or let them know and I'll contact them (and give me the individual's name to reach). It's all together possible, perhaps we could do something reciprocal with them.

Linking Website back to Search Engine Results!

2008-03-27T07:44:00.000-07:00

I had a new idea this past week-end, one which I haven't seen in any other website, nor have I heard about in any of the several webmaster newsletters I frequently read.

Since I have a forward looking/pioneering type brain - I have been on the Internet bandwagon for nine (9) years now, and how best to utilize it for business purposes (when I first built our own mortgage lending/brokerage operations site). Matter of fact, some of you may know, initially I developed Secret! University as an off-shoot of my original 6-year old Live class on Website & Internet Originations, back then mortgage website SUCKED and even today most who have one, don't make use of it like I know they can.

Today's new concept has a potentially sizable draw back, in my opinion however. And, that is my own long held believe that sending a website visitor off your own site (by providing them with a link on one of your pages) to visit elsewhere is plain foolish! They might never come back!

Even with that in mind, plus the fact that SE key word/phrase rankings are dynamic and can change at a moments notice ... here's the concept.

This paragraph is now incorporated inside the main index page of our website: "In mortgage industry education & training we're Number One in Google, Yahoo! and Ask.com ...."

On our available Services & Materials page, this sentence is now predominate: "Google says we're #1 in certified mortgage professional classes - the link also appears on our CMP course page as well.

The indivdual page for our Website & Internet Origintions Live class, now says: "Go ahead and Google internet originations - you'll discover this class is Ranked #1."

This may prove to be a great idea. OR it could drive potential future students to more easily locate our competition! We'll see ... I'll keep you posted as I figure out how it goes over an extended period of time.

Master Seminar - May 17th - 'Early Bird Pricing' Part DUEX

2008-03-25T11:43:00.000-07:00

Today I wanted to follow-up with you for our upcoming Master Seminar here in Southern California, which I offered you last Monday. So far, we have not received checks in the mail for this very special live event from any of my Blog readers.

I am hopeful you can send it off right away, as I’m looking forward to meeting you face to face, and next week the event will be announced in our April 1st newsletter – which could result in a rush of RSVP’s … I don’t want you to miss out!

Thanks.

HAPPY EASTER!

2008-03-23T08:13:00.000-07:00

RESPA Changes – HUD Proposal – Observation

2008-03-22T12:29:00.000-07:00

First off, let me please tell you my comments (2000+ words) come from reading this 75,215 word HUD proposal (to modify a rather small section) of RESPA. Thankfully my head didn’t explode after three (3) readings.

Although the font size is the same on our Discussion Board vs. this Blog, the area to read is much wider (so it wouldn't be sooooo long), I stuck it over there - click HERE and you can see it in all of it's mellifluous splender!

This and That

2008-03-20T04:01:00.000-07:00

Now, just a minute. Who do you think you are anyway ??

Over the years, we have enjoyed a loyal readership of our monthly newsletter, The Mortgageland Journal; in fact I will finish up the April 1st edition probably this afternoon. I also enjoy a nice group of folks, that I consider Friends of Secret! University (that's YOU), who follow my more personal thoughts and developments on this Blog.

I want to tell you who I think you are. I think you're a true industry professional looking to improve your own career, with good morals, sound ethics and admirable integrity as you engage in your activities here in the consumer residential real estate mortgage lending industry (or you wouldn't read my stuff). Further, I'm reasonably sure you and those who read our newsletter, joined my industry since August 1998 (did you catch I said MY industry?).

Given your years in the business, being raised somewhere along the timeline and the environment of the Aug.'98 to Dec.'05 cycle ... that gives you certain characteristics which differ from the people who grew in the cycle before that time - the '88 to '98 one, or those of us who entered the industry well before that (BTW, I hope you saw the September '07 newsletter, it contains one of the best pieces I feel I have written about my eye-witness account of the last 4 'corrections'). Right now, you're enjoying the initial cleansing period, a sort of punishment phase of today's cycle - late Dec.'05 to .... (my guess 10 years in length) - the harsh punishment portion of this new cycle should be over shortly, BTW.

Therefore considering your entry and exposure to both 'conforming' and 'non-conforming' loans during that period, your 'take' on the subprime niche is far more limited than say, mine. I've put some industry statistics together, along with certain empirical evidence and my own observations ... all mixed together to form the lead article in our April newsletter - Future of Subprime - be sure you read it, it will clear things up for you about that important subject.

Next ... I finished my first read of the dreaded RESPA change proposal put forth by HUD this week; you should take a look, it's fascinating to see what and how they think, and especially the extent of the studies and research they conducted to come up with this. I like it. If passed, it will be very good for your career. Any day, you'll start to read opinions from everybody about it. Over the week-end I'll give you my initial thoughts on key areas in it (after I read it again today and tomorrow).

RESPA - HUD's Proposed Partial Revision

2008-03-19T12:56:00.000-07:00

The long awaited RESPA rule was published day before yesterday along with the new 4 page good faith estimate, HUD-1, and the sample scripts the settlement agent will use at every closing. There is a 60 day comment period on the proposed rule. Below are links to the new GFE, HUD-1, the closing scripts, closing instructions, and the proposed rule in its entirety.

GFE http://www.fambpalmbeach.com/5180GFE.pdf

HUD-1 http://www.fambpalmbeach.com/5180HUD1.pdf

Fixed Script http://www.fambpalmbeach.com/fir.pdf

ARM Script http://www.fambpalmbeach.com/arm.pdf

ARM Discounted Script http://www.fambpalmbeach.com/armdisc.pdf

Balloon Fixed Script http://www.fambpalmbeach.com/firballoon.pdf

Balloon Interest Only Script http://www.fambpalmbeach.com/firballoonio.pdf

Hybrid Arm Script http://www.fambpalmbeach.com/hybrid.pdf

Closing Instructions http://www.fambpalmbeach.com/instruc.pdf

RESPA RULE http://www.fambpalmbeach.com/RESPARULE.pdf

So far today (4+ solid hours of reading) I've covered the first 9 lnks here, and am on page 38 as we speak (of 131 pages) of that last link.

Future of Subprime - A Primer

2008-03-19T07:26:00.000-07:00

I frequently read a handful of industry discussion boards, and post on some of them from time to time, as some of you know. I see this particular question being asked and discussed often, so I thought I would take a stab at it this morning for you.

Based upon what I read, the conventional wisdom seems to be that it will 'come back' (like it was the last several years) and that it will probably take a dozen years or so to do that. That 'conventional wisdom' I speak about, looks like it's coming from people who joined our industry during the last industry cycle Aug '98 to Dec '05, so they lack a clear picture in the broader context of the business, my view.

I want to give you some of it's history, so you'll have a well-rounded view of the horizon. Subprime, formerly called B/C paper and/or non-conforming, began in 1914 (with my initial industry employer and others). As an eye witness, I know it was a around in 1966 when I started as a twenty-something LO. Fannie Mae and her snot-nosed step half-brother Freddie Mac (labeled 'conforming') began in 1972 and BTW, I went to their baby showers, etc. and drank a lot of beer!

Since then, Fannie (FNMA) & Freddie (FHLMC) - let's call them by the initials they like to use these days "GSE's" - during their history have stumbled badly a couple of times and ONLY because they are Government Sponsored Enterprises, they haven't exploded all over everybody like 'non-conforming' has a couple of times (but been real close).

The way in which 'non-conforming' was done - 'originate to distribute' - during the last 20 years (not before that), and especially the reckless way it was handled the last decade, is at the core of what it's going through, and what you all have seen recently.

It will not be back, like it was during the '98-'05 period (ever again), but IS back (if you thought it left) right now ... only YOU don't know who the players are, and who the big-shot players are going to be (nor do I) ... because they are starting/building/growing/developing, etc. right as we speak. It's my sense they will operate nearly as they did during the period immediately prior to the start of the last cycle in August '98.

BTW, you can take this assesment to the Bank ... and you're more than welcome to quote me!

Subprime History & Future

2008-03-18T12:42:00.000-07:00

I mentioned previously my friend Paul Muolo, writer and reporter for the industry's premiere publication, National Mortgage News for the past 25 years or so, is writing a book on the history of Subprime (which he's interviewed me about several times so far). He had a synopsis in his on-line 'What We're Hearing' column on there main website this past Friday, about his front page piece in the paper yesterday "B&C Vanishes as volumes Fall to 7-Year Low" where he says "subprime originations were virtually nonexistent. " In a nutshell, his synopsis Friday said in part "... In Q4 lenders funded just $6 billion in subprime mortgages. In 2005 -- the peak year for subprime production -- the industry originated $807 billion in A- to D loans. It's safe to say that the subprime industry has been wiped off the face of the map ...."

To that end, and as a remark to him, I suggested he should be comparing recent stats not as against the biggest boom years for Subprime in all of history, but more accurately more like a usuable comparison to 1998 (the final full year of usual/normal production before the boom in the industry during the '98 to 12-05 cycle), as those numbers are more real-world (vs. the dream numbers of that 'easy-street' cycle period) and probably the levels of subprime's future production going forward.

I've asked him to get me those stats - which I'll report to you - since it is my belief they will reflect what you can expect for the next several years. Hopefully, he'll consider my opinion and write more with this viewpoint; I sure will.

Early Bird Pricing

2008-03-17T11:01:00.000-07:00

From the records of our recent newsletter mailing, I selected a small group of people to make a Special Offer to this morning – and I decided to also extend it to my loyal Blog readers also!

Our Saturday May 17th Master Seminar I expect to be well attended due to circumstances surrounding everyone in the industry these days. It is my current plan to have exclusive seating and Early Bird Pricing for this elite group (that's YOU)!

We have held these get togethers here in Southern California off and on for more than 6 years, always on the same week-end as our $1,500 Website & Internet Originations Live class.

The Master Seminar’s usual fee is $125 per person. Until April 17th, I am offering you an Early Bird price of $100! This price is not reflected on our website, so you’ll need to mail us your check (address bottom of the page).

I hope you’ll attend, it will be my pleasure to do all I can to help you with your mortgage lending industry career.

Peter

PS: If you happen to be interested in our (next day Sunday) Website & Internet Originations Live class, you can get that one via check also until April 17th, while you’re here for $1,150.

Is it a Grand-father's clock or the 4 Season?

2008-03-10T11:20:00.000-07:00

There I was, trying to explain to my (non-mortgage guy) Brother about the swinging pendulum of a Grand-Father's clock, and how that is like the 'corrections' in the residential real estate lending industry. I was explaining how all it seems I see being said by other industry training/guru's, is that you can survive todays's tempory condition and things will be back to normal (reckless wholesaler loan products, easy money, borrowers so plentyful they seem to fall from the sky, big commissions, etc.), if only you improve your sales and closing skills! BULL.

I told him, the entire business is moving in a different direction now (all those things are now history), and industry personnel must change to adapt to the new ways ... he's a little slow sometimes, so he didn't get it!

So, I said think about it this way, the last cycle '98-'05 was Summer time, free and easy - you got to ware short pants, sunglasses, and engaged in a lot of outdoor activities ... now it's Winter, and the coldest one on record with WAY Way too much snow, etc. So you dress accordingly and must do a whole bunch of things differently as well. So ... ya gotta adapt to the new climate!

Those good old days are gone - now's the time to get some serious training GET SMART!

More SEO thoughts ....

2008-03-07T09:54:00.000-08:00

Some of you have followed my frequent remarks on this subject, as you blunder through getting your own websites to perform for you (of course you could take our Website & Internet Origination class - but that's not my point today) ... so ... check this out! Look how deep some people will go to find a search result they like and click it - all I can say is WOW

loan officer programs #34
realtor seeking mentor #47
mortgage banking du lp #149
money needed for real estate mentor ohio #161
mortgage net branching all states #257

All of those phrases we do not specifically highlight as key word/phrases we push - they were picked up out of our content by the SE. This data is from our internal records on generic search terms folks used, where we ranked, and the fact that they click onto our website -- so do ya think you always need to be #1 ?

The Mortgageland Journal lead article March 1, 2008

2008-03-06T10:30:00.000-08:00

I plugged this article into my Blog this month, as it struck me as information which so many folks just don't get! As I read article after article, and topic/threads here and there, in several diifferent industry-wide internet discussion borads (I probably read all the stuff you get too 'cause I want to see what you see, and keep myself grounded by listening to other viewpoints), I continue to see people lament about the conditions today by saying " ... when will it get better, I don't think I can hold on much longer ...." - that's why I wrote this piece, to help bring some clarity to them.

A bit on this clarity point: I had a sorta business mentor/friend in my mid-thirty's, who was a merchant banker from London, he was wise beyond his years I used to think. One day I asked him, how do you see these things so clearly? He had a great example for me. He would tell me life is like climbing a mountain, and he was merely a half dozen paces or so ahead of me up that mountain side, "From up here," he would tell me, "I can see the horizon better than you can ... I'm not any smarter than you Peter, I just got here first and the view's better than down there!'

Now, back to the article - my own conclusion: I would say, probably 98% of everyone I speak to about this (and almost all of the industry "guru's" I see), don't really understand we're now moving in another entirely different direction ... meaning, surviving this is merely accomplished by lasting until the turbulence is over - then returning to how it was (by holding-out) isn't how it works ... it doesn't return to how it was (or even close to that)! And, THAT'S a rather profound point, when you don't understand it.

CAN WE HELP YOU?

How it Was is not how it Will be

2008-03-02T08:35:00.000-08:00

Below is the lead article from our March 1st newsletter, The Mortgageland Journal, I trust you’ll find the reading enlightening! BTW if you don’t get them sent to your own e-mail inbox every month directly, you can see it live HERE and sign up to get them also. I've added this one here, because I feel it's an especaially important message - at just the right time for our readers.

How it Was is not how it Will be

Picture an old grand-father’s clock in your mind, with it’s pendulum swinging back and forth. That’s how the residential real estate mortgage lending industry trends have historically performed. The pendulum swings in one direction for a time; then it reverses itself and goes back the other direction. With each ‘correction,’ the newly changed course brings fresh and innovative ways to operate; many new concepts develop that were not a part of the former path.

After the last correction that started during the Fall 1998, several original concepts evolved. As we think about that period, we need to remember through the 7 years of that pendulum swing, home values soared nationally and interest rates plunged to historical lows, inspiring mortgage brokers and LO’s to think ‘short-cut’ and ‘easy money’ was the way to go (and thus keeping them from growing in business knowledge and realizing they should have been learning their trade – but the Greed was intoxicating). With property values and rates acting like they had never done before, it encouraged the scheme of refinancing customers 2, 3 or even four times over a short period – stuffing large YSP’s and raising loan balances each time, effective burying many of them in their homes; all the while persuading every Tom, Dick & Harry to jump into our industry so they could make Big Bucks! Unlike the more traditional way of thinking, Integrity and Ethics seemed out of place during that cycle. Also among the more startling ones that grew, included the idea of paying LO’s and AE’s commissions (six plus figure incomes!) vs. previously customary salaries + bonus – which made them transaction and commission check focused and it took away from a fiduciary duty to place the customers interests ahead of their own; the notion of permitting unsupervised and unqualified LO’s operate as independent contractors working out of their home; wholesale funding sources, overcome by greed, offering one irresponsible loan program after another chasing production; the net branch biz plan often utilizing unlicensed and always poorly trained loan officer/agents to uncontrollably operate nationwide … I could go on and on about all the changes that came to pass during the 98-05 pendulum swing. This was a most regrettable period for our industry, thankfully, most of the careless concepts are disappearing as we speak.

Let’s not forget, the Aug '98 - Dec '05 swing brought us astronomical production numbers all up and down the line – however, those were not true loan volume numbers, but really GIFT stats, as most transactions were a present/gift to the borrowers as there was very little resemblance to real lending being done, given the major deterioration of the vital checks and balances from LO to broker to processor to underwriter to lender and up stream from there. I have never seen the amount of total industry destruction these and others ridiculous practices have caused.

Since the current ‘correction’ began during the Winter 2005, at the moment we’re just over 2 years into the current pendulum swing; on this new path you’ve already seen a great many changes – there’s more to come ... don’t look backward for what’s now gone, instead look forward to up-to-the-minute ways of doing things(*).

A great many new State and Federal laws are being enacted to protect the public from the Wild West ‘out of control’ attitudes of the mortgage industry recently, with regulators looking at those they license more closely and enforcement of existing laws being stepped up. By and large, the barriers of entry into the industry should return. A return to previous foolish programs being offered by wholesale lenders is not likely; neither is the business model of permitting unsupervised LO’s to be our 'front-line' with the public; optimistically the general idea of avoiding industry education and training should disappear since the ‘big easy money’ has stopped at last. Wholesalers accepting new business from mortgage brokers without performing appropriate due diligence first, should vanish. Traditional/ conservative underwriting standards (some of you vets I'm sure remember the old 28/36) will resume (including across the board LTV reductions); and along with hundreds of other important areas to consider, the upstream warehouse funding sources, the wall street conduit developers, pool & bond insurers, etc. all should return to the previous checks and balances each were designed for and must perform, to maintain a viable secondary market.

To be expected during this swing, would be rates increasing and property values declining, the beginning of things returning to a more normal and balanced way of doing business. Today however, since the Fed is artificially pushing rate lower in an effort to boost the American economy, that variation in this correction will have an unknown effect on business in the long run. We’ll therefore, likely see a rush into the conforming arena by most, with subprime/non-conforming taking a bit longer to transform itself into what it will look like, during the rest of this present day cycle the next seven to 10 years. And when it does, it won’t look at all like it did during the 98-05 period; probably more like it did preceding the '98 correction. They’ll be all new players, novel hot loan products, etc. Thankfully, long gone are the Low score high LTV Stated GIFTS!

I have seen in previous 'corrections,' nearly all of the formerly weakest areas tend to come to recognize how they contributed to problems and then they make adjustments and improve! Adapting to the changes, is the key to any long-term success in this business. Those 'good old days' of fast & easy money are gone.

PS: (*) loans will stay on the books longer than they had been during the 98-05 swing (where many borrowers refinanced regularly, frequently traded up on home purchases, etc.) to the more historical 5 to 7 year loan durations. Therefore one example would be that due to the changes in loan life, if you have been churning your former customers for new loans or trying to survive on referrals from them, you’ll discover in this new climate, the number of loans you’ll be able to get funded will be significantly reduced.

Even though well thought-out articles like this one, and the friendly help you get from discussion boards like this - they are no substitute for some real focused industry education and training by qualified people. Visit Secret! University and see how we can help you today!

Never did glow in the dark

2008-02-28T11:23:00.000-08:00

Last Thursday I mentioned we were gonna get with the SallieMae folks and possibly offer financing (LOOT) from them to our Students to get $$$ for their training & related expenses with us. After these many days of wrestling them to the ground to get any info out of them, I learned what we charge for our most expensive training, education, and materiual isn't enough money to interest them in any student/customer referrals from us (makes me think we need to raise our various tuitions, costs & fees - hahahaha)!

I go to my primary care physician in an hour to get the results of all the tests he subjected me to earlier this month; hopefully they were all negative. Never did glow in the dark by the way!

Don't Glow in the Dark

2008-02-24T10:01:00.000-08:00

I know it's Sunday ... just leaving for breakfast and to check out the new movie Vantage Point, trailer looks exciting, we'll see through.

Far as the residential mortgage training & education business is concerned, it's DEAD - if you check out that link you'll see one of my own favoriute terms - one I use frequently to friends and family in my real world life.

As I was leaving my last 'test' with the nuclear medicine folks, the tech told me I would be radioactive for 60 hours! The results from all of them, I should hear more about this Thursday at my next doctor appointment; whatever's up with all these tests (inside the suspicious mind of my primarty care physician) I'm sure it's not more Cancer. That ship saled almost 10 years ago now.

Student Loans?

2008-02-21T13:15:00.000-08:00

Was contacted by SallieMae this morning about our offering/referring new students to them for student loans ... here's some of their info: "... you can borrower the class tuition, and any special costs you may incur, such as travel, lodging or any other special expenses you might have while taking our classes. The minimum loan is $1,000 and can be used for class cost for any combination of our courses or you can enroll in our Fast Start programs to accelerate your learning. You can borrow 100% of your educational cost plus an additional 60% for additional or special expenses you may have while taking the classes. Interest rates are low and you can take advantage of the deferred payment option if you wish. With a Career Training Loan, you can save over the life of your loan with variable rates as low as Prime + 1% and fees as low as 2% for borrowers with excellent credit ... interest rates are structured so that you get the best possible terms based on your credit history." It all sounds pretty good to me. We may be offering this new feature on our website soon.

I sorta feel like a pin cushion, yesterday they did a Thyroid Needle Biopsy (you can look it up on WebMD), and believe me, it hurt (like Real genuine PAIN) far more than the internet and the doctor suggests. Doctors call it "discomfort" - I called it screaming throbbing deep anguish!

Tomorrow I get the Nuclear Medicine folks gonna pump me full of radiooactive juice, while they scan me three differtnt times, 2 hours apart. They even told me to stay away from children and small pets for a day or two because I'll be radioactive! WOW, what fun. I'll report back.

How it Was is not how it Will be! - Part 2

2008-02-19T10:47:00.000-08:00

Finished up the newsletter lead article for the March edition of The MortgageLand Journal, it turned out to be more difficult than I had imagined. This is its opening paragraph:

"Picture an old grand-father’s clock in your mind, with it’s pendulum swinging back and forth. That’s how the residential real estate mortgage lending industry trends have historically performed. The pendulum swings in one direction for a time; then it reverses itself and goes back the other direction. With each ‘correction,’ the newly changed course brings fresh and innovative ways to operate; many new concepts develop that were not a part of the former path."

From memory, I then went on to detail what the major changes were that happened to the industry during the '98-05 swing (I kinda wished I had some old newspapers, notes or whatever to look back on) - events and innovations that were not a part of the previous cycle/swing.

Next as a contrast, I described what's been different since this Winter 'o5 swing began, and what I see that will come to pass as well as a result of the effects the '98-05 cycle has had on the business. Overall, I found this one of the most challenging pieces I've written in quite some time.

Continuing my aim at mortgage broker/owners that entered our industry since the Fall '98 swing began, the second article describes how to select the best candidate when hiring an LO, and where to find them.

(Doctor appointment this afternoon, and several tests scheduled for tomorrow).

How it Was is not how it Will be

2008-02-12T09:13:00.000-08:00

Nope, haven't figured out how to specifically attract the mortgage broker/owners with 10 years experience or less.

Our primary outreach methods to influence industry personnel to consider Secret! University as THE industry training & educational resource to date has been: (1) well placed key word/phrases in generic search engine results (we've now got over 3 dozen of them where we rank between number one and #3 - so when folks are looking for help - there we are!), along with (2) our monthly newsletters (we've sent them out 51 months in a row).

Staying on top of our SERP and keeping our website up to date are essential tasks - so when a potential student/visitor arrives at our site, they need to find it engaging. Both tasks take an enormous amount of time and effort.

The MortgageLand Journal newsletter, as well, must be a timely and interesting read since there's a great deal of industry news and information available everywhere. I have tried to focus on my own unique perspective on relevant issues and topics. As I read other residential real estate mortgage lending business newsletters, articles, etc. I see that, yes indeed, my viewpoint on most subjects is distinctive - hopefully that should translate into a positive feeling toward Secret! University.

We are now more than two years into this latest industry wide 'correction'; the punishment portion of it is coming to a close. During this period I have watched our newsletter "read-rate" plunge to an all-time low this month. It has been painfully obvious, those industrywide readers of ours continue having a difficult time surviving the changes that effect everything they do.

I have seen in previous 'corrections,' the formerly weakest areas come to understand how they contributed to previous problems and they make adjustments and improve! Dealing with these changes, is the key to any long-term success in this business. So, 'How it Was is not how it Will be' is going to be the lead article in our March 1st newsletter's edition . I'm going to try and draw a contrast to how things generally were during this past 10 years, and how they are likely to change - along with how they have already changed. Those 'good old days' are gone.

Mortgage Broker/owners - 10 yrs experience or less

2008-02-04T11:54:00.001-08:00

In part, Saturday I said "... would be those owner/operators who themselves began in the industry since the Fall of '98 (when the last 'correction' began). That group has grown up in the atmosphere which developed since then. Most seem to have a similar attitute and view of the industry, and it's one that needs to be tweeked for them to continue on through periods in our industry that are not 'easy money' operating times." and I 've received several e-mails asking me what the heck am I talking about 'need to be tweeked'?

Hopefully, you've heard the story about the blind man who walks up to the front end of an elephant, and after touching his trunk all over for quite some time, then trys to describe the animal. I'm sure you'll agree that from his limited perspective, his distription won't be an accurate one, will it? That's the tweeking part I'm speaking about.

Today's (10 year or less) mortgage brokerage shop owner/operator who began in our business as an LO just after the last 'correction' begun, was raised in an industry that he/she saw was a business driven by sales commissions (a business concept that had just begun right before they got hired), easy big money, not all that much work, shallow training and industry education was the norm, back-office personnel were second class workers; everything centered on their EGO and sales/closing skills.

As owner operators themselves, they have run their firms that same way - and they got to enjoy paying out hundreds of thousands of dollars (millions in some cases) in commissons, baby-sitting all those LO's they brought on board, how they were treated when the LO's left their company (stealing company property - loans in pipeline, contact lists, suing for unpaid over-time, pirating employees to follow them to the promise land, etc.).

On the other hand, the animal doesn't resemble a snake at all! In the lead article of our August 2007 newsletter I describe what an LO actually is! And, that's not a commissioned sales/closer. If today's (10 year or less) mortgage brokerage shop owner/operators, hired the proper attitude/skilled LO's in the first place (shovel people) and invested(*) the time & effort training and educating them on issues of ethics, integrity and everything else that goes on in a mortgage brokerage operation ... NONE of the issues I mention above would happen!

And, what would they do with the (formerly paid out commissons) hundreds of thousands of dollars (millions in some cases)? They keep it in the company checkbook, pay salaries and small bonuses to the new LO's, increase and have a solid back-office staff (who carry the heavy load of operations anyway) and buy advertising to attract applicants - because to stay in business in our industry over-time is NOT easy; it's Hard Work.

This paradigm is what works, not the biz model they were taught and have been following. If you're one of them and have had many LO's, then you know exactly what I'm talking about. The way you learned WAS great when anybody could earn a six+ figure income - due to the fact that rates were at historical lows, property values were soaring, wholesalers were reckless with dozens of stupid loan programs to pick from, and it was easy street for everybody!

Today's the real world.

(*) they could also engage someone to handle those tasks for them, since most of them probably couldn't handle that range of tasks themselves.

Training the Shop Owners

2008-02-02T18:41:00.000-08:00

It's been almost a week since I've had anything to add to my Blog here; did a lot of thinking today though. Got the Feburary edition of The Mortgageland Journal out on time Friday morning, and finished up the last minute touches on some new 'bullets' for our Website & Internet Originations live class web page, which I'm hopeful will make that read easier/clearer.

As I have focused a great deal these last 6 weeks or so, on updating re-writing much of our website's content/text and also updating all of our lessons - I have come to realize a concentration on owner/operators as students as well, is lacking. I have been thinking about how to help their personnel, loan officers and newer broker owner shop owners; but I've missed an audience that we could do a great deal to aid and support in operating their businesses. And, that would be those owner/operators who themselves began in the industry since the Fall of '98 (when the last 'correction' began). That group has grown up in the atmosphere which developed since then. Most seem to have a similar attitute and view of the industry, and it's one that needs to be tweeked for them to continue on through periods in our industry that are not 'easy money' operating times.

I have to concentrate on how to get their attention, so we can be a helpful resource for them.

Website & Internet Origination ... and still being sick

2008-01-28T14:06:00.000-08:00

Ever since I announced last Monday that I had been ill and that I felt better -- I've been able to spend no more than a handful of hours on Secret! University activities - maybe 20 hours total this last 8 days! Finally kicking this thing completely, at the rate of three or 4 hours a day, is sloooow going. Still working on the February edition of our free newsletter The Mortgageland Journal today.

One thing that's bugged me most of the last couple of years (as mortgage brokers & bankers have had their focus elsewhere) has been the dwindling attendance at our ground-breaking Website & Internet Origination live classes (my favorite BTW - I like the classes smaller sized anyway, but ....). This class session has been at least 10 hours of information coming at you like a drink out water out of a fire hydraunt! Plenty of info, background, and answers to WHY.

Just now I took a peek our our Press Release page, and noted that it was exactly six (6) years ago this coming Friday, that I mentioned this class. Needless to say, it' s been long-running and actually was the underlying reason I stopped operations and got into teaching. As I (or you) Google - internet origination - we're still in the Number One position for that SERP, in and of itself not an easy accomplishment in the first place. You would think that alone would be one heck of an endorsement, when added to the nearly three+ (3) dozen we have posted from alumni of this class on our Testimonials page. So, even though I'm somewhat bummed out about attendance, I think the specific reason is the presentation on our Class Detail page about this one. Looks like I'm trying to say too much there, people read it, and say HUH? Go ahead, click it and see what I mean.

I'm gonna spend the necessary number of minutes this week (if I can), before the February newsletter hits the streets, and re-word the entire page so it hits the various points in fewer words and more to the point; as everybody in the industry should take this class! Finding and dealing with potential borrowers via a website (if utilized properly), and through the internet is the easiest thing I have ever done in my career - so ..... YOU should pull the trigger yourself.

Been Sick - real sick

2008-01-21T11:32:00.000-08:00

I've set a Record. I've taken more colf & flu medicine than is humanly possible for me to actually take! Since just before lunch time Thursday the 10th, I have beeen in bed 24x7. I won't bore you the the details, but think back to when you felt really crappy - then multiply that by a factor of at least 3, that's what it's been like. I rarely catch things like this, but for every 4 or 5 years so so ... should be completely gone in a few more days.

I've been able to keep track of our main website visitor traffic; and through this point, Jan. vs Dec. 65% fewer people have looked at our curriculum, venues, etc. to considering signing up for some help. Web searches are way way down, and it's really sloooow out there in Mortgageland.

Even though I do think (so far during this correction) the majority of the damage has already been done to our industry, with the 'punishment portion' slowing begining to wind down late Fall. From everyone I speak with in originations, vendor suppliers to the business, other long-time industry veterans including several trade-publication editors and publishers I know personally and who have lived through 3 or four of these corrections as I have - it's the consensus 2008 is going to be another terrible year for the residential real estate mortgage lending industry across the board.

Our upcoming Master Seminar set for February 23rd here in Southern California, will provide those in attendance with a variety of past solid survival techniques (that I have watched work one on one!)

Sign up today and I'll buy you Breatkast, Lunch, and show you EXACTLY how to save your beacon.

Lost & Confused - Residential Mortgage Lending Business - 2008

2008-01-09T11:49:00.000-08:00

This is exactly how I see the residential real estate mortgage lending industry today!

I have spent much of the last day or so, reading the latest dead-tree (paper) editions of National Mortgage News, Scotsman Guide and Origination News - in addition to the several online news sources I look at regularly.

The news is confusing and all over the place with this or that proposed new rules and regulations, and opinions all over the map about where we're going and what to do about it!

It's easy to see how difficult it can be to draw from the available information and set the proper course. Given the variety of venues we have available for industry training & education at Secret! University, I do hope we have something for everybody (I'm happy to add any new material anyone may want BTW) . I seriously hope our upcoming February 23rd Master Seminar will be well attended, because face to face I know I can help those that attend.

As I hear and read about other industry seminars, they seem to have an agenda, whereas the speaker sets-out their agenda and sorta speaks to that narrow topic, pretty much exclusively. Over the years I have learned I am a pretty good open field runner, and that I can 'bobb and weave' with the best of them. Our sessions are more like a old fashioned town hall meeting, when everybody is involved with a question and answer type conversation, and not someone simply giving a speech - it is that range which I know industry people need and not merely a narrow focus in one area ... and difficult to do, unless the speaker is well versed on all of the potential topics, I know I am.

2007 - A QUICK LOOK BACK

2008-01-03T12:15:00.000-08:00

Beginning December 2005, we entered the fourth industry 'correction' in my long career in the consumer residential real estate mortgage lending industry. This correction is proving to be as serious as the industry collapse of 1988, which was a result of the far reaching S&L crisis. As cycles go, the punishment portion of this one should bottom out this Fall, and slowly start to begin to improve. By then, many of the new players that typically emerge during these cycles, should be at hand. However, much like 2007 - until we hit that point, 2008 should be as ugly as 2007 was; maybe even worse.

December 2007 proved to be the most active month on our website in the last 22 months; a strong website visitor showing that we are quite happy with. Unfortunately, even with all that action, our current student base as well as potential new ones are themselves in financial trouble, so very few of them actually took advantage of our products, services and materials in December, or even much throughout the entire year. As with almost every industry vendor/supplier I've spoken with, 2007 was a financial disaster at Secret! University ... we're looking to better times ahead.

Updating our Main Website - SEO revisited Again

2007-12-31T12:19:00.000-08:00

Back on December 4th, I posted a dozen or so keyword/phrases where we were in rank position one, two or three on several different search engines, results that pleased me to no end! Since I completed our main website's update for 2008 - this morning I re-searched each of those keyword/phrases to see where we are on those particular ones now.

Since we know SE results are dynamic, naturally it's all together possible that our postions could have changed either up or down, because of course other webmasters are working to improve their own results too.

I'm happy to report that even though some of our previous ranking keyword/phrases in the one to three positions have changed somewhat - I noted several of our other pages (recently updated) now rank within the same first page as well ... so I'm a happy camper!

And speaking of happy ...

Happy New Year!

Wraping up 2008 Updates

2007-12-27T11:42:00.000-08:00

I trust you all had an enjoyable Christmas with friends and family ... I sure did!

One good thing about this dreadfully slooooow time, it's given me plenty of an opportunity to update our main website (which I finished a couple of days ago), and time to get started on modifying all of our mortgage educational training lessons so they're fresh for 2008.

At this point, I am looking for a full Google site index - so I can use my Google webmaster site Tools and study what they now see on our site (after the many many changes I made). I think I might be a little worried I could have made some mistakes, that may have resulted in a negative effect on the ranking of some of our key word/phrases. I'm sure I'll know for sure in several weeks.

Merry Christmas & Happy New Year!

2007-12-21T09:45:00.000-08:00

Updating our Main Website - SEO revisited - Part DUEX

2007-12-20T12:20:00.000-08:00

This is what I want to do this afternoon, after 3 hours last night and five hours so far today. I got up close and personal with the Google Webmaster Tools - and what a delight that was!

They showed me that I needed to closely examine and properly modify all of our Title and Keyword Tags, along with longer more percise Descriptions for each page (they say it will improve clickability)! Google has 88 pages indexed for our website, and boy oh boy, I'm now REAL familar with each of them and HTML (yawn).

I was fascinated to discover they showed an external links table which provides a list of pages on our website, that have links pointing to them from other sites. Sure I knew that, but since the Page Rank of our index page SUCKS, I knew it couldn't be too good - regardless of the efforts we have put forth to get theme related back-links with suitable PR's. When I saw 2,116 of them (and I mean each and every single one, from whoever, to this or that page on our site) I nearly fell off my chair.

Of course all this background work nobody will even notice, but it's the 'heavy lifting' that will help us endure through this devistatingly slow punishing crisis our industry is in right now. This task is gonna take me weeks!

Mortgage Mentor Program - update 2008

2007-12-18T11:32:00.000-08:00

I was able to blast through the modifications on this page on our main site this morning; finished what I wanted to accomplish in just under 3 hours! Sticking with the same theme of updates, modified META Tags, some Title tags, etc., and I reduced the word count to 59% of it's former size, and (again) kept sufficient detail so a potential student will understand what this program is all about.

Like our CMP program, our Mentor program is one of the most popular individual pages on our site, with several key word/phrases in organic searches within the top three, so getting these two pages completed initially I think was a smart move ... I can only pray I didn't goof up any of our prior SEO hard work.

Certified Mortgage Professional - 2008 update

2007-12-17T11:42:00.000-08:00

I spent most of the day yesterday and all of this morning, putting the finishing touches on the modified CMP course page on our website. I think I kept all of the SEO elements which the page had before my update ... search engine results this week will tell me if I am right.

Cleaned up the META tags a bit, changed the copywrite info from 2007 to 2008, plus the 'word count' I reduced by just over one third (so it's now 67% of its former size), kept the necessary detail for those that closely read it, re-arranged the order of the newly shortened paragraphs, so it should be easier to skim - plus (with the smaller word count now) the 'optimal key word density' should be even better!

I selected the particular web page, because it's one of the most popular viewed pages by our web visitors AND (most importantly to me) because it ranks either first or second on organic web searches ... it's now in the hands of the Google gods.

Updating our Main Website - SEO revisited

2007-12-15T13:00:00.000-08:00

So ... this morning, I decide to revisit the search results for those highly ranked key word/phrases I revealed here last week. Naturally, since searches are not static, many of them changed their relative page positions, nothing drastic I'm happy to say (but it does look like maybe a few of our competitors read this blog, and did some extra work on them as well)!

I click each of them, found our listing on the results page, copy & paste what the search engines highlighted as the relevant text which they selected to show, and then plugged all of this in another excel spreadsheet. Theory being, as I make changes to our pages, I want to be sure to not change any of the text that contributed to nicely placed key word/phrases ranking. Therefore any changes I make, should only improve our positions and not necessarily harm any future search results ... but we'll have to see about that, because the 'optimal key word density' of each page is going to be compromised by my modifications ... this stuff confusing you? It sure as hell is confusing me!

Finished my Christmas shopping day before yesterday - sent my children and grand-children out those Gift Cards, so they can get what they want ... I really miss the days when they were all still at home, and we could open up real presents from under the tree Christmas morning. I just loved to see their little eyes light up ... no better feeling than that for me.

Keyword/phrases SE SEO ... more

2007-12-14T10:45:00.000-08:00

Ok, so I'm getting myself all worked up over making changes to our main website as a kinda new years update; let's call it freaked out!! I have been obsessing over even some of the minor changes I have planned ... and then this morning it hit me as I looked at todays's stats.

I went back a few days to copy and post here, some of the searches people did, where we were ranked in a terrible position (with that particular key word/phrase) and yet, they click over to our page anyway ... here ... you take a peek:

Google Search
thank you to mentor teacher #57!!
inurl:links mortgages #75!!
mortgage brokerage training #45
mortgage site templates #63
mortgage industry loan programs #39
free mortgage loan programs training #107

MSN/Live Search
education mortgage #52
education mortgage #80!!

I thought I would put these here to help teach you a lesson - and me too! Here's what these search results tell me. They tell me at least some people will click over to a website even when the keyword/phrase is 'buried' in their results. As I study what the SE's saw that put our pages up in the results of these random searches, I have learned even the most casual non-focus content, can attract visitors to a website - not many - but some.

So now, I'm really freaked! In an SEO newsletter I got yesterday - this quote LEAPED off the page at me: "It's common knowledge that visitors tend to glance at, and scan, pages rather than study them in any great detail." Again, I want to shorten up our content, yet be thorough enough, that the potential student will get the full story before they decide to engage this or that service or materials from our learning center.

I'm confused and need some help.

Philosophical Differences with 'Sales'

2007-12-10T14:19:00.000-08:00

I’ve been thinking a great deal about the magnitude of the 'content' updates I am planning to make on our main website for 2008, their effects on our SEO key word/phrase placements, along with the significant philosophical differences I see that I have with most others in our industry, are on my mind a great deal.

As I think through the differences I have with so many, I have been able to break it down fairly clearly in my own head. It appears the preponderance of those I interact with, whether they are students, folks inside an industry discussion board, those that I speak with who author industry publications – it looks like everybody started in our business since the cycle ‘correction’ of August 1998.

It appears to me, the generation of people that started during this post-98 cycle, entered the industry for the big easy money that was at hand via the new big-commission biz notion that developed then. Looks like compassion toward customers, has been substituted for selling & closing clients with this bunch.

In my adult lifetime I have seen too many sales pros use various props, scripts, and tricks of all sorts to ‘close’ people. I’m still too idealistic about our industry, so this philosophical aversion to ‘sales’ I have, as evidenced by most of my writings which highlight the need for Integrity and Ethical behavior ... I think many want to have faith in my approach ... yet our competition all seem to market themselves as sales guru’s and promise to show their seminar attendees how to earn the big bucks! And, considering they came to the industry for the 'big bucks' and 'easy money' in the first place, those motivational speaker types, who prey on pumping up everyone’s ego, looks like the sort of industry education and training they are attracted to vs the more career minded approach I offer through Secret! University.

The fear I have is that the theme I intend to promote throughout our site in ‘08, may drive many of them away – it can be summarized this way: ‘from stranger to 1003 to funding and beyond are all included within the many important moving parts of the residential mortgage lending industry – DON’T STOP AT SALES. At Secret! University, our curriculum range and our teacher/Mentors have far more know-how than mere ordinary sales skills, you need to reach higher!'

So … what-do-ya-think?

PS: And I know why this is; when I started it was salary and small bonuses, and face to face with customers, not websites & e-mails like now days. We were never promised the opportunity to earn enough income in a year or two, to purchase a house outright, so the big-bucks wasn’t the draw like lately – it was a ‘career’ I entered. We signed-up customers, hundreds and even thousands of loan customers face to face; seeing their fears, desperation, and relief when approved, made a lasting impression on me from my early days in training. I believe these two major differences are why I think so much like I do.

Keyword/phrases SE SEO

2007-12-08T11:23:00.000-08:00

Tuesday of this past week, I told you a bit more about some of our website organic search engine results. I can tell you, the more I study terms words/phrases people search on the various major search engines (SEs), the more fascinating it is to me to see the differences as between them. Although our pals at Google run the SE that is widely reported to do 70% of all Internet searches, I am frequently surprised to see what their crawler/spiders pick up on our site, that they rank as relevant. Frequently, the exact terms are searched on the same day on multiple SEs, which result in different rankings on our keyword words/phrases within them.

It may very well be that the various page TAGS help in increasing ranking for a particular searched keyword/phrase, but I see eveyday the SEs pick up text (content) from our pages that they use, as they rank and sort what we have to say on the different pages on our site. And of course they're not static, they change from day to day sometimes too, from what I see. I wonder about the extent to which I'm going to punish our search term rankings, when I re-write most of the pages on our site at years' end; do ya think I'm gonna want to kill myself after I do that?

Below are some of our less than delightful recent searched terms, which resulted in bringing SE visitors to our website. Like last Tuesday, as you click them and you can see the actual search page that someone looked at, just before they clicked our link, and visited our site:

Google Search
planning a company mentoring program #7
mortgage loan officer training #25
mortgage training store #25
secrets of successful mortgage brokers #10
mortgage ceo duties responsibilities #15
cmp designation #6
loan officer education #10
mortgage classes in ohio #3 and #4
mortgage loan officer 101 #6 and #7
whats it like to be a mortgage broker? #6
loan broker training #30
mortgage bankers coaching programs #6
secret society tattoo #3
mortgage lesson #3 and #4

Yahoo Search
affordable training for mortgage brokers #5
loan broker mentoring #9
loan originarator training center #2
mortgage lesson #1
cmp designation #4

MSN/Live Search
secret hands shake #7
best mortgage originator mentoring #2 and #3
mortgage industry in ohio #8
loan officer 101 #31

The residential real estate mortgage lending industry niche that we at Secret! University are in, is a highly competitive one - yet I see our competition focusing mostly on 'sales' - how to make a 6+ figure income with little or no work, or motivational seminars all about pumping up the egos of those in attendance, a very narrow spotlight in my view. Our curriculum; Mentor/teachers have far more know-how than mere ordinary sales skills, so our focus is much wider, and it is my hope it is more attractive to potential students - as THE place to visit for top-notch industry training & educational needs.

More on SEO & PR

2007-12-05T13:22:00.000-08:00

I was gonna tell you more today on the dozens and dozens of key word/phrases which we try to get a good ranking on, but they have resulted in a page (ex.) 319 or 1,756 placement ... but I was embarrased to show you that list too - it's longer ...

On an industry discussion board I enjoy, today someone was speaking about Page Rank (PR) and I gave him this answer I though was important:

"I'm starting to think this PR is an ego thingy, I even find myself spending quite a bit of time seeking relevant sites with good PR to link to us - which MIGHT bring us a customer from the other's guys site - 'cause they're sorta 'curious', but for that to happen I won't hold my breath ... I think what one search engine (Google 70% of all searches on the planet) thinks about how revelant our site is - its PR - means less to me that what potential customers think evey day of the week! BUT, remember this Jake -- out there in the real world of Internet YOUR 'serious' future customers (and mine as well) don't give two hoots about your PR in my view - they find you because they search specific words and phrases on any number of search engines, so they can be lead to a website which will help them solve their problems, one with solutions and good information.We have been focusing on getting first page key word/phrase ranking (on as many different words/phrases as we can) on all the major organic search engines -- with some reasonably good results so far. I speak about this and our stats from time to time in my Blog -- could be some good info for you there, check it out when you have the time!

We Don't Need No Stinking SEO ... or do we?

2007-12-04T10:45:00.000-08:00

All of you who have your own website, struggle from time to time with 'organic' key word/phrase placements, as I do. There's loads of good information out on the Internet on how to get your website to rank high on Google, Yahoo, Live, AOL, etc. and not in position 45,487 on page 28,942 on this or that search - the location we've all been in at one time or another. What the guru's don't happen to mention to you and I, is that our residential real esate mortgage lending industry is a very difficult one to get a first page ranking on.

I myself set out to develop a retail residential real estate mortgage brokerage website, attract applicants exclusively via the net, and get them closed all through the 21st Century technology, the Internet and my website back in 1999. Over the 39 months I created and fine tuned it, I talked about it daily, inside the Mortgage Grapevine industry discussion board many thousands of time, both the successes and the failures as they unfolded - then stopped operations and 5 years ago began teaching a live class to show others how - that's how and when the Secret! University mortgage training center began (just a small bit of historical context).

With that accomplishment under my belt, and remaining anal about statistics from my early days with The Mother Company. I changed over the website to the one you all see today - a learning center with a wide variety of venues for potential students to choose from.

I've become a student of SEO -- -today I wanted to share some of our recent results with several different search engines - this info came from my daily study of our web visitor statistics (which I sort inside an excel spreadsheet):

Google Search
mortgage broker mentor #1
mortgage finance certification courses #1
mortgage instruction #1
mortgage training master #1 and #2
certified mortgage professional #2
residential real estate mortgage lessons #1
mortgage industry publications #1
step by step mortgage lesson #1 and #2
mortgage professional mentor #1 and #2
certified mortgage banker #1
certified mortgage certifications #2
mortgage lessons #1 and #2
cmp certified mortgage planner university #1 and #2
requirements for cmp designation #1

Yahoo Search
mortgage professional training #1
mortgage officer lessons #1
ceritified mortgage professional #2
loan originarator training center #2
looking for a mentor loan officer mortgage industry #1
mortgage lesson #1

MSN/Live Search
best mortgage originator mentoring #2 and #3
certified mortgage professional #1
certification mortgage professionals #2

AOL Search
mortgage lessons #1 and #2

What I find interesting about these random entries above, is how similiar the words/phrases seems to be and yet ranking different from one search engine to the next. Although I am quite proud of how well we rank on these and other key word/phrases, etc. I wanted it point out that it is my opinion that even though 'placement' is indeed an exact science, and I don't know what it is yet ... so if you're having difficulty ... join the party!

Subprime History ... more

2007-12-03T09:26:00.000-08:00

Last week I mentioned my friend Paul back in New York, is in the process of writing a book on the History of Subprime. Here's a cut & past of an e-mail exchange we had this morning, thought you might get a kick out of it:

Pete,
track for me, if you can, the phrase 'subprime.'
--When I started covering this stuff in the early 90s the industry then was calling it 'B&C' lending. Then in morphed into 'home equity' and 'subprime,' then 'non-prime.' What was it called in the 60s and 70s?

Paul

Paul: Those phrases were all invented by the conventional residential real estate mortgage lending industry who seemed to have the need for a label to show it was different from them. We never had a cute little label for it back in the day. The one you missed, which is what I myself have used is 'non-conforming' - it seems to be the one that best describes the animal. 'Snooty' 'A' type lenders choke on all of those (because that sort of lending is beneath them), so they made up ALT-A !!! hahhahahaha

Contact me anytime pal.

Peter

Merry Christmas

2007-12-01T11:56:00.000-08:00

Got the Christmas lights all up and working on our main website, go take a look - they're pretty nifty if I do say so myself!

November turned out to be the second most lively month for unique visitors to our main wesbite in the last six months; a full 39% of all site visitors specifically looked over our CMP and Mentor pages. Continues to support my opinion that, those who remain left in the industry, want to learn more and have an edge, so they can have a long and fruitful career after they make it through this difficult patch of the present 'correction.' Translated, unlike today, that make me feel like our future at Secret! University looks pretty good, as soon as they have more discretionary money to investment in training & education.

Subprime History

2007-11-30T13:06:00.000-08:00

A 25 year friend of mine, writes a column for the National Mortgage News people, it's called What We're Hearing - and is one of their principal Editors as well. Paul wrote a Best Seller about the S&L crisis of the mid '80's and is just now doing his research to do one on the history of the Subprime lending industry (something BTW I have had many people tell me over the years I should author, since I have lived it first hand - except I'm clueless on how to do that).

Anyhow, it's been fun going down memory lane for Paul, recalling when Countrywide was brokering subprime seconds to my own wholesale company back in '85 (if I remember the date correctly), when a major subprime consumer finance organization (The Mother Company) bought a German Bank ('76 as I recall) who later entered the subprme market in the US as a warehouse lender (mid '90's) to Danny Phillips and the boys at FirstPlus in Texas, along with when that same finance organization purchased the largest thrift in Dallas (First Texas Savings - who I did a great deal of business wth then) - later a part of the notorous 'Southwest Plan' (Ron Perlman of Revlon) courtesy of M. Danny Wall and the Government's RTC kids.

I also explained to him the core belief that 'subprimers' were credit lenders and that the conventional residential real estate mortgage lenders are more property/collateral lenders. A distinction I told him probably only a handful of old dudes like me could articulate that distinctively. By illustration I told him, hand a loan file to me and the first document I would look at is the credit report, hand that same file to an "A" lender, he'll turn to the appraisal first - every single time!

I asked Paul for a signed copy of his book, and also if I'll get a footnote!

The Mortgageland Journal

2007-11-28T10:29:00.000-08:00

Our newsletter, The Mortgageland Journal's December issue is complete, finally. As I mentioned earlier, it's going to go out on the 4th this time, instead of the 1st - going to see IF Tuesday is really a better day (more readership) to send out newsletters as I have seen others comment.

I'm about to undertake a major challenge in that, I 'm going to re-write/update/expand each of our CD mortgage lessons for 2008. I doubt much has changed from what I had initially authored (but the times have changed), however I think this exercise will be appreciated by our students ... besides rewriting several of the pages on our main website.

On the website issues, I'm going to try and go with my brother's advise, which is "people don't read - you've got too many words on your pages, they'll read the headline and casually scan the text." My thoughts have been the exact opposite from that; I have assumed potential students want to know as much as they can before they commit. Still, expanding and updating the individual lessons and shortening up the webpages will be a big job.

A witty new friend/relative?

2007-11-24T16:15:00.000-08:00

About a month ago, I signed up for the beta version of Google Alerts. I plugged in my unusual last name, and receive Google e-mails from time to time, showing me various internet pages that contain my last name. Todate, I have seen many pages on things I've authored, some stuff my brother's done (mostly about his recent teenaged daughter's double lung-transplant fundraisers) and some things from a gal who's first name is 'Katie.' Katie, as it turns out, is an 8th grade (English?) teacher in Hawaii, and her blog postings turn up inside my Google alerts. So this afternoon I read her blog over the last several weeks - I don' think she's a relative, but is definately witty and an interesting young (apparently) gal. I enjoyed it while listening to MOB HITS (CD) by Dean Martin, and I polished off yet another turkey sandwich!

My brother's daughters is having her ups and down, but generally is doing better, Thank you. Been working on the final version of our next newsletter. I 'm going to have it sent out on the 4th instead of the 1st this next month - I read somewhere Tuesday is best for newsletters, so we'll see ...

Happy Thanksgiving

2007-11-22T09:24:00.000-08:00

Mortgage Reform and Anti-Predatory Lending Act of 2007 - PART DUEX

2007-11-20T11:22:00.000-08:00

As I continue to read and speak with other industry advocates, the consensus is that something does indeed need to be done, but that most think this House BILL won't get past the Senate, and therefore not become Law anytime soon.

Due to the many positive benefits this potential law would bring to our industry, IF I had the final tie-breaking vote, I would vote for it with no reservation - even though that position goes against what most originators, loan brokers and loan officers (our clients) seem to feel ... from all I read, they don't seem to notice this BILL as written, brings a lot of other people into line (parity) with them, in many areas.

Mortgage Reform and Anti-Predatory Lending Act of 2007

2007-11-19T15:42:00.000-08:00

Today I took the time to read the text to this Bill as Passed, it hurt my brain. Ya know, it's amazing how lawyers - who speak the same language I do - can write things which I will have to try and translate into English for my brain, after I read and re-read them 3 or 4 times! Thankfully it won't become effective for six (6) months - that should give everybody enough time to understand it!

This is how it made me feel ...

This industry correction's getting really UGLY

2007-11-14T12:37:00.000-08:00

I was sad last month when my 42 year long friend Paul and his MLSG Home Loans (Reno) wholesale company went under; last week my 20+ year long buddy Jim, got canned by Thomson Media (his New York employer of 25 years), and just yesterday my buddy Bart tells me he thinks his 35+ year old mortgage training school (Orange County) may yet become a statistic also! I'm sure most of you have had experiences like these lately with many people you know in the industry as well, but these particular 3 guys I know pretty well and they're not amateurs, nor are they poor businessmen either - the collateral damage is getting seriously ugly out there. Having been an eye witness to the last four industry corrections, I initially predicted this one was gonna be real bad, but not as bad as the one in 1988 - when most of the investor/buyers of residential mortgage loans ALL went under, as did most of the pmi companies - but I feel I was likely incorrect in my original assesment of the ugly degree this 'correction' will reach ... looks like you can't even gird your own loins and make it through!

I do have some happy news; my brother's daughter Acacia is recovering nicely from her double lung transplant last month - yes, of course it's up and down, but looks like she's out of the woods now -- hoooray!

Increasing website traffic! It's GOOD

2007-11-08T11:12:00.000-08:00

For the first 7 days of the month, we have had a 16+% increase in traffic to our main website as compared to the first seven days of October - I translate that to be a GOOD thing!

As I have previously reported, the increase in referrals (via organic searches on AOL, YAHOO, LIVE, GOOGLE, etc.) to our learning center give me a good feeling: 1). that our SEO activities are effective, and 2). that industry people are 'out there' looking to improve their career skills. My next assumption is that once they stop being scared about their own survival during this serious industry wide correction/crisis, more of them will pull the trigger on more of our materials, services, and products.

Last night was the Big Event for Acacia medical 'fund raiser' for my brother's daughter at Smooth's in downtown Long Beach, CA. It was very well attended. I was the door-man/ticket seller at the door, so I got to speak with each person as they got their tickets. The tone & warmth of the crowd was very encouraging and loving toward my brother and his little girl - there were a lot of tears. Thank you for your help and support.

Soliciting for more Mentors!

2007-11-05T16:32:00.000-08:00

This morning we sent out a mass e-mail to all the members of our industry discussion board; since some of them maybe didn't yet read our November newsletter from last Thursday, where I asked for new potential Mentors to check in with us to see if they may qualify to be added to our faculty. Today's e-mail blast got us a few more inquiries - in addition to those we received last week - so I guess it was a good idea.

I know I keep beating this drum, but there's just no other place I can find on Google, that's worth a damn, for industry people to go for indepth Mentoring type help with their careers. And, I want Secret! University to be THE place to go!

We added our second new Mentor in as many weeks to our faculty this afternoon - meet Charlie Fitzgerald!

Thanksgiving 'Specials' Revealed

2007-11-02T18:12:00.000-07:00

Our November 1st newsletter issue revealed we're offering several nice 'specials' that are available all month long for our students. In the newsletter, we reported we have a new Mentor/Teacher (Andy) and have launched the Secret! Society on-campus fraternity!

Yesterday and today we received several inquiries my potential new Mentors to add to our faculty; I am hopefull they will all make the grade and come aboard, so far it looks like they will.

Students sign-ups have been very slow lately with the industry in the midst of this 'crisis/correction' - still plenty of inquiries though, in fact October was the busiest single month on our website since we remodeled it February '06 ... seems like people are just afraid to pull the trigger.

The Mortgageland Journal November issue

2007-10-30T09:58:00.000-07:00

I've been working nearly non-stop the last several days to bring this edition to a conclusion; our newsletter's November 1st edition will be the busiest issue in many many months.

We've got two lengthy seriously thought-provoking articles, a small piece soliciting for new Mentor inquiries to be added to our faculty, an announcement on (Andy) the latest Mentor we added to our group in October, our Secret! Society on-campus fraternity is introduced, PLUS an un-announced Thanksgiving Special is mentioned as well ... quite a busy issue, and I'm not finished with it yet!

Gotta go ... I heard on the news last night that the former Yankee Manager Big Joe is talking with ours Dodger's to possibly replace that loser Grady Little -- Horray!!

New Mentor at Secret! University

2007-10-28T09:59:00.000-07:00

He's a recent graduate of our Certified Mortgage Professional program (CMP); an owner/operator and strong competitor with his organization of 20+ LO's and several office locations in Wisconsin - we welcome Andrew Campell to our Mentor faculty! In addition to his Bio and Resume on the Mentor/faculty page - you can read a bit more about Andy, right here!

Fraternity Update

2007-10-22T17:34:00.000-07:00

While working on the final deployment steps for our Secret Society decoder ring, we have created our own secret hand-shake, and have begun to design our own fraternity tattoo (for those new pledges that want one). Things are coming together nicely.

The Secret! Society - our new on-campus Fraternity

2007-10-20T16:27:00.000-07:00

Have been putting together the Secret! Society, our new on-campus fraternity. Plan on launching it in time to be announced inside the November 1st 2007 edition of The Mortgageland Journal. Am having a slight bit of difficulty getting the secret decoder rings to funtion properly for our first pledge class, they may not be deloyed until the second semester 2008.

2007-10-14T11:32:00.000-07:00

Our main website visitor stats as of this morning, are running just about like they were when I reported last to you back on the 6th; the Mentor program has pulled ahead just a smidge though. I have made the final decision that all of our Mentor/Teachers must have our CMP certification and designation going forward, that will be yet another area where we will be unique as compared to the others that offer industry Mentoring (I have Googled them and have been carefully reading what the other guy offers). Even though all of ours are TopNotch people, I will be making that requirement known to those few Mentors we have today that are not CMP designated.

After the October 1st newsletter, where I did some soliciting for people to inquire about becoming Mentors for us, so far it's boiled down to two that I believe we will be adding by month's end. I'll be announcing who they are, both in a Press Release and also in our November 1st newsletter. Again, I want a dozen or more qualified Mentor/Teachers for potential students to select from by year's end. I've got big plans for 2008!

I'm also still thinking over a new idea 'Insider Membership' - I'm trying to come up with WHY should anybody want to join up (for the small fee I'm considering charging) and what they would get out of it - I've been doing the Ben Franklin close (for those of you that know what this is) on myself, to see what it looks like from all sides.

My little brother's BLOG on the day-to-day situation of his daughter's health situation, seems like it's getting some pretty good 'reads' according to what he tells me (I know I enjoy it very much) - you can check it out too! Acacia Updates ... THANKS for your Support!

2007-10-11T09:31:00.000-07:00

PressRelease

SMOOTH’S TO HOST ‘BIG EVENT FOR ACACIA’
Fundraiser Set For 16-Year-Old In Need Of Double-Lung Transplant

Long Beach, CA. – Smooth’s Sports Grill will be the location to host the ‘Big Event for Acacia’.

Overlooking Pine Avenue in historic downtown, Smooth’s Roof-Top Terrace will be the setting for a fundraiser to help Russ Cugno and Lisa Rizzo-Cugno's sixteen year old daughter, Acacia.

Acacia has been diagnosed with Primary Pulmonary Hypertension -a serious life threatening heart and lung condition. She and her mother, who’s had to leave work, recently rushed to Pittsburgh where she had a life-saving double-lung transplant surgery last Friday night.

The non-insured expenses for pre and post-operative care are astronomical. The financial impact on the family is severe and continues to grow daily.

The event is planned to be a fun filled evening with food, music, prizes and a giant silent auction and is to raise money for Acacia to help with expenses for her and her family.

Smooth’s ‘Big Event for Acacia’ will be held on Wednesday, November 7th beginning at 5:30p.m. Smooth’s Smooth's Sports Grill is located at 144 Pine Avenue, Long Beach, California.

The donation at the door is $25. per person.

If you are unable to attend but wish to make a contribution, or wish to purchase tickets early, please visit: http://www.americasmoneycenter.com/eventtickets.htm

For more details and updates on prizes and celebrities planning to attend please visit http://www.lofan.com/acaciafund.htm - for updates on her condition visit http://acaciaupdates.blogspot.com/

2007-10-07T09:30:00.000-07:00

Yesterday I added several Unannounced Halloween Specials on our website, you can read more about it on our Press Release page.

Late last night my brother reported to me that his daughter Acacia had a touch and go day. Her new lungs crashed, and she was in a very bad way had to hook her up to a Heart/Lung machine, and also a Kidney Dialysis machine too. By day's end the machines had given her little body enough relief that she was responsive, had more color in her face, and was able to communicate with him a little. For those of you that have helped me pray for her, we both very much appreciate it. I intend to add the upcoming Findraiser press release for Acacia on our main website along with a page so people can buy tickets online.

2007-10-06T10:20:00.000-07:00

Both our Certified Mortgage Professional designation program, and the Mentor program pages on our main website, are neck and neck @ more than 16% each of the total page reads the first 5 days of this month. I continue to be encouraged at the level of interest they continue to have with our website visitors, where more than 80% so far this month have come from organic searches on Google, Yahoo, Live, etc.

I've been thinking about offering an annual 'Insider Membership' arrangement to our students, whereby they will receive special pricing on many tuitions, services, materials, and products we offer at Secret! University. In fact, I've almost decided to do that - still chewing on the details of how it could work, so it would be best for all concerned.

Been having a hell of a difficult time recently, with the situation surounding the tragic medical condition of my brother's little teenaged daughter Acacia. He's added THIS page to his website about what's been going on with that recently. In point of fact, I'm probably going to add a page to our main website, where people can purchase tickets to the upcoming Smooth's Big Even Fundraiser for Acacia November 7th.

As of 10 minutes ago, he's updated me about her condition (I took him to LAX yesterday to fly to Pittsburgh). After the 12 hour surgery where she finally got the double lung transplant she's needed for some time, at 3AM this morning he got the good news that the surgery went well. Seven hours later, he was told they had to put her under, and hook her up to a heart-lung machine, as the lungs weren't working too well initially. At this point, while hysterically crying on the phone to me (it made me cry too), he told me they don't know how long she'll be on the machine, and may need yet another set of lungs to replace these! Needless to say, friends and everybody in the family are extremely concerned right now.

2007-10-01T13:27:00.000-07:00

Our October 1st newsletter got out on time this morning; a good 'read rate %' so far in the first day. And, we received 2 inquiries about becoming new potential Mentors (I solicited for inquiries in the newsletter) - I hope the two guys that inquired about possibly joining our Mentor team stick ... we'll see. My goal is to have up to a dozen or more by year's end, and all of them CMP's!

Well, our Dodger's ended up 8 back of the division leader, which is terrible considering what we had to work with. I read on their website today, the owner has pledged to bring back both the General Manager and the Field Manager next season (that's two more mistakes - but in his final address about the season he did tell everybody ticket prices were going to go UP next season - what great news!). I sent him an e-mail and asked him to please put down the crack pipe and pay attention to his investment instead.

2007-09-26T13:34:00.000-07:00

Finished up the October 1st edition of The Mortgageland Journal this past weekend. I also completed our Press Releases page for our main website. The historical timeline of the company contained on it, I feel many visitors to our website will appreciate reading. When we were doing retail originations, the general public loved that page, they looked at it all the time - therefore I assume industry people should care about that sort of stuff too.

Today I was reading the Los Angeles Dodger's homepage and saw the title of an article which said: Dodgers officially out of race - don't know who wrote it, but that's been the case for some time, maybe the author doesn't follow the team like I have. GAWD willin' they'll DUMP Manager Grady Little pretty soon now.

2007-09-24T10:30:00.000-07:00

One of our Mentors sent this to me yesterday: http://data.nationalmortgagenews.com/columns/hearing/ - "As I recall -- and I'm going by memory -- the broker movement started in the wake of the S&L crisis 20 years ago. When hundreds of thrifts went bust, laid-off loan officers became "freelancers" for Anaheim Savings, Guardian Savings, Countrywide and others. If you have any recollections about the evolution of brokers drop me an e-mail at Paul.Muolo@SourceMedia.com "

As it so happens, I saw that Friday and had already replied to him (I've known Paul for many years BTW).

I believe the mortgage broker beginning started quite some time ago, here in Southern California I for one remember they were around when I first started in this industry 41 years ago for The Mother Company (in fact, on our wholesale side, we did a lot of business with them in those early years). Come to think of it, when I left and went out on my own in 1979, at first I was a mortgage broker and brokered mortgage loans back to my former employer! I also think they began as a real presence, at different points in time in other States, so maybe in your State they were in deed a result of the later S&L crisis as Paul suggests.

If you have anything to add, why not post it HERE since I'm told Paul is a reader of our BLOG!

2007-09-19T15:10:00.001-07:00

Before we started up the Secret! University learning center, we had a long-running Press Release page which detailed the adventures of the compnay as it grew. I remember from the web stats back then, that the borrowing public clicked that page quite a bit, spent 4+ minutes on it, and enjoyed learning about our history.

Yesterday, I cut & pasted several of those older press releases (those that seemed somewhat relevant to today) and fired up an all new Press Release page. I am hopeful visitors to our main website will enjoy it.

BTW, our Dodger's SUCK - they have made me cry for the last time this season. I prey they toss the Manager out on his ear in the off season, too many good people out there who could do a better job: Like who? Mike Sosa or Kevin Kennedy ... or real more world Dusty Baker!

2007-09-13T09:46:00.000-07:00

A negative idea has been generating in my brain about industry specific internet discussion boards, that's going to be the subject of our lead article in the upcoming October 1st issue of The Mortgageland Journal. I have visited, read, and posted myself probably 10,000+ times in these boards over the past half dozen years. In addition to the logical math that I have come up with; as a long time advertiser in one of them, I got to see the inside numbers of posters vs overall membership vs reader/viewers of information in them. They have a large and wide reaching effect into our industry, and I'm coming to believe it's often been detrimental to the business.

Several minor points I have seen are 1). people ask question in them, and then rely upon the responses from strangers, as being the correct answer to their needs (when frequently I see the replies are incorrect), 2), many people substitute these boards for their industry training and education, and the biggest problem I see 3). those who provide answers more often than not are ENABLING others with help which they should have never had easy access to.

2007-09-07T14:15:00.000-07:00

The Secret! University learning center had it's 5th Anniversary celebration this past Saturday, and I almost forgot to mention it to anyone outside the company, sorry!

At the end of the first full week of the month, our Mentor program page came in at 29.556% of all the pages viewed on our website; tells me lots of people are looking for some guidance (I would be embarassed to tell you how many of them actually pulled the trigger to engaged one our our teachers though). The number one page looked at by our website visitors came in at 49.261% - our latest 'Lesson for the Times' CD Lesson (bottom of the page).

As I speak with other industry trainers, I hear the same theme, loads of 'lookers' and few people willing to actually spend money for training and industry education. It's my guess they will make the wrong move by seeking help by networking with colleagues, or look for free answers on the internet from strangers inside chat rooms, or industry discussion boards.

Given everything that's happening out there these days, one would think they would be smarter than that -- I hope so, we've got lots of good stuff available.

2007-09-04T12:08:00.000-07:00

Ya know some of these marketeers are becoming a real problem for me; I think it may be time for me to wear Depends before I turn on the computer these days!

Here's why. I just now saw a press release about this one company, in part it said: "... a leading single-family super-prime residential mortgage lender focused principally on the jumbo and super-jumbo segment of the adjustable-rate mortgage (ARM) market ...."

It's stuff like that, that makes me wet my pants laughing - see what I mean? Those guys gotta be teasing me, right? They're so wonderful, they brag about 'putting the wood' to (not ordinary prime but -->) super-prime customers with their ARM products ... hahahahaha.

That's just tooooo funny for me

2007-09-02T10:20:00.000-07:00

Good Morning! It's gonna be another boiling hot day in So Cal today. I get a real kick out of the weatherman on the news, they've been telling me, here at the beach city where I live, it will be around 80 degrees! hahahah. Friday 2:30 on my way back from lunch, it was 105 degrees in my driveway, yesterday @3:30 (late lunch) it was only 1o1! ... going to the movie show today at 12:30 and intend to stay there for probably 3 different shows, at least it will be cool there! (bet it's been more than 50 years since I snuck from one movie to another - today I'll keep my eyes out for the RESPA Police!!)

Some of you have have followed the web visitor stats I revealed about our entire website earlier in August, well month's over now. A full 20.5% of our overall website visitors looked at our Mentor page, with our Certified Mortgage Professional program coming in at 19% (our average visitor spends more than 6 minutes on our site - I like that number!) ... especially considering 85+% overall who visited us (unique visitors) came to us from organic searches on google, yahoo, etc., tells me people are looking for more and more ways to survive this industry climate, that's a good sign to me. I hope we can help YOU tomorrow!

2007-08-31T09:26:00.000-07:00

This one IS the Industry’s fault!

As a general proposition, you’ve all heard that the consumer residential real estate mortgage lending industry is cyclical. This is best illustrated by thinking of a old grand-father clock, with it’s pendulum swinging back and forth. It swings in one direction for a period of time, then it reverses itself. It is those reversals we have come to call ‘corrections.’ In the early stages of these reversals, the industry goes through a cleansing period, a sort of punishment phase. The length of each swing before the correction, is as a rule, roughly for the same time interval.

So there I was, in my late 20’s with 7 years under my belt in the biz operating a branch office, the recently implemented landmark Federal legislation - The Truth in Lending Act was only a couple of years old, and both Fannie & Freddie were both newborns, as I faced the first industry wide correction. Thankfully, I was employed at The Mother Company, which sheltered me from most of the negative impact of it (my employer then was a rather large, solid, and sizable financial organization). Shortly after Watergate, it came rolling in all across the Nation. As I recall it was because of serious troubles in the American Economy in the early ‘70’s. We had run-away inflation, and long gas lines, etc. Rates on conforming were 10% to 12% on 1st mortgages and 16% to 18% on seconds. The industry wide punishment segment of this correction lasted a few years, and since I was shielded from it I don’t remember it being all that extensive. This one wasn’t our fault, the industry didn’t do it to itself. What developed as a result, was the seven decade old subprime industry left the confines of the consumer finance companies, and began to be noticed by the more conventional mortgage world. The reversed cycle that followed was generally good for the mortgage industry and lasted more than 10 full years. I was young and fairly green way back then, and my memory could be off a bit on some of the details, but that’s what I recollect.

Only a handful of years after the MBS market was created , the Government de-regulated the Savings & Loan industry (they were most of the secondary market/portfolio buyers for residential mortgage loan transactions during that period), in ‘87-88 there was a huge explosion! Countless S&L execs foolishly began to make loans that were not on local SFR’s as they had traditionally been doing utilizing depositor’s money, the previous four decades (at modest LTV’s). Instead they began to finance large investor/builder owned apartment complexes in far-flung areas they knew little about, made risky business loans, plus funding a great many non-real estate related type loans, such as lending collateralized by cattle and such! That’s what started the snow-ball. As these S&L’s failed one by one, ultimately FSLIC failed (the S&L equivalent of FDIC at that time). Although it was the de-regulation that was the core problem that time; many S&L execs were easily fooled by being in regions they were unaccustomed to, losses were astronomical, many S&L senor execs and owners were convicted of criminal activity. A few of you veterans will remember many scandals, felony convictions, and jail sentences … Charles Keating of Lincoln Savings and others. Industry wide, nearly everyone got punished, many MI companies went under, as did a great many mortgage bankers and brokers who fell like dominos ... but basically it wasn't our fault, Government corruption and de-regulation were at the center, was my analysis at the time. Today with the Internet, I found this: http://www.inthe80s.com/sandl.shtml which summarizes it from an historical viewpoint. With my own head down and bullets flying-by close overhead, it’s not as tidy as Google shows you. The Government’s RTC bail-out (you can Google Resolution Trust Corporation) saved even more people from being punished. This industry punishment segment lasted a couple of years as well. During this one, I operated a fairly sizable nationwide wholesale company, with a $4+ Million annual overhead ($0 of that was commissions BTW), so I remember this one like it was just last month. I frequently had nightmares and was often scared to death throughout this period. As a result, the mortgage asset backed securitization market grew like gang-busters after this. The reversed cycle that followed was generally not favorable for the mortgage industry, it lasted more almost 10 full years like the last one. What I’ve written is from my memory, it was ugly, I was there and that’s how I remember it!

Two years after I closed my former company, underwent two Cancer surgeries and was an independent consultant helping mortgage operators locally, came the next correction. This last one, came as a result of the Russian Ruble crisis in the Fall of ’98. Worldwide Capital markets got squeezed big time … some of you might remember Old Stone, Conti Mortgage, Southern Pacific, and many more names back from that era, who didn't make it. This market ‘reversal’ was a quick one, the industry wide punishment was mild compared to last time; it wasn’t a long prolonged slow bleed-out like today. We didn't do that one to ourselves either. As a result, there were more than 350,000 new originators that jumped into this business, due to the paradigm shift of big commissions being offered to originators (a notion previously unprecedented) by the few lender survivors plus the new ones that developed - since there were many unemployed people available due to lender failures, this was the largest single growth period in the history of our industry … they’re exiting now. As the pendulum swung back, this reversed cycle which followed, was historically the biggest boom-time for the industry I had ever seen. Housing values soared, rates plunged to the lowest levels in more than a half century, and generally a good time was had by all for the remained of this short lived 7 year cycle.

Today as a Teacher/Mentor and the semi-retired Founder of http://www.secretuniversity.com/ I see, unlike the three previous ‘corrections’, this late 2005-2006 reversal has not been due to circumstances generally beyond our control, this one is due entirely to actions solely by industry insiders. Many of my peers and I have seen this one coming since early ’04 as it became apparent ‘the wheels were starting to come off the wagon.’ On the rise we saw originators working in their jammies with the bunny-slippers at home, broker/LO fraud starting to become a concern to wholesalers, wholesalers promoting irrational No Doc and Stated loans to low FICOs with high LTV’s, etc … The early symptoms began showing up in our newsletters, in late '03 and well into '04. An epidemic of greed prevailed nationwide for several years, with an industry flooded by unethical and unbelievably poorly educated, trained and supervised personnel who were our industry’s front-line, exploiting the public – a virtually frenzied wild-west gold-rush mentality. RESPA violations overwhelmed those that policed the industry, Wall Street greed incentivizing foolish wholesale lending program extreme offerings, that literally gave away money to borrowers, unethical behavior and greed fueled ramped fraud and abuse at all levels. By anyone’s definition, the industry did this one to itself. And, it’s going to be a long and slow bleed out, The reversed cycle that will follow, will by and large, not be complimentary for the mortgage industry. Even if it’s as short lived as the last one, this pendulum swing should last at least another 5 years, while the industry punishment segment, should be generally over by next Summer or Fall. There’s plenty of blame to go around. I do not believe the effect on the overall market will be as massive as the ‘87-88 collapse, but this one is gonna be close, and some in the know think even bigger!

As in the past, as the punishment portion ends, and this recovery ultimately begins, we’ll find many new and exciting organizations emerge from the wreckage of the retribution of this harsh reversal, and there will be countless innovative programs, products, and ways of doing presented. Even though scary as it is happening, this renewal of the business from time to time, gives us all hope, for a stronger and increasingly solid industry, that’s a critical and vibrant part of the American economy.

2007-08-27T16:05:00.001-07:00

Finished up our September 1st newsleter this afternoon; changed the name of it too! It's now The Mortgageland Journal. This will be our 46th monthly edition - WOW how time flys.

It's lead article all about industry cycles/corrections, I have been working on for what seems like forever. It got up over 10,000 words, then realized this story as I remember living it, is really big! Probably could have continued another 20,000 words easily! I ended up triming it down to just under 1,400 words (that's about 900 more than I like for a newsletter piece), but any smaller and it would have left out too much.

I feel this is a very important piece and I hope everybody in the entire industry reads it, it's a story and a viewpoint unique to the perspective of those who generally inhabit the business these days.

2007-08-24T09:23:00.000-07:00

Earlier this week, our Mentor program got engaged by a new student who came to us from one of the news-groups out there on the Internet. As it so happens, I was personally selected to be the one to help. This is going to be an exciting assignment for me (given the timing right now in this industry 'correction' cycle). This new group wants to start a nationwide wholesale operation from scratch, get approved by Fannie & Freddie, etc. If done properly, I told them I agree with their feelings this is a good time to do that, many opportunities are available - and since I have done what they need several times previously, I told them it will be my pleasure to help them avoid the many falling rocks that will fall and try to hit them as they move up the mountain.

As part of our first conversation, we discussed the critical need for bulletproof Broker Approval standards. For 30 years of my 'operation' life, 14 years with The Mother Company, the rest with my own company - we always had high standards on who we would accept business from - a feature that's been missing from most wholesalers the last 8 years or so. I'm going to design them for their group. I am very eager to help them succeed; a wonderful challenge for me again.

As I have been putting together the lead article for our September Newsletter, which is about what I saw and lived through during the last 4 industry make-overs ('corrections') - the reasons we had them, the opportunities that flowed from them, and of course who and what, got punished by them (this mortgage broker approval issue has been one important reason for this current one).

I am fascinated, as I have been recalling what I did and how I felt with each of the industy make-overs as they were happening. As I have been talking about this article I'm writing lately, it has become very obvious to me that the version some folks have of them, depends on where they were in their own careers at the time ... so I think I have a unique perspective and that it will be a note-worth analysis of the issues surrounding those 'corrections.' I hope you'll enjoy the reading!

2007-08-22T15:36:00.000-07:00

Ya know what, I have realized that I had not memoralized my thoughts on this topic here. So here's a link to sombody that interviewed me 2 weeks ago: http://www.mortgageindustrytrends.net/liquidity_crises_alt_a_market you might find my thoughts interesting (as it relates to today's industry wide mess).

He was a bit shy to also mention that I said "first Drexel then Lehman are gonna be statistics pretty quick" as well. Both got too involved with our industry - like DLJ formerly did - (besides their main function of putting MBS's together). These two and a few others, bought mortgage operations, became warehouse lenders, etc ... generally in areas where they had no instincts or experience and then SURPRISE! (similar to the wrong DNA commercial bank reveal whenever they get involved in the subprime arena).

2007-08-20T10:14:00.000-07:00

Good Morning! Going to be another HOT day here in Southern California -- some call it 'Global Warming', I call it Summer Time in August! Left the Dodger game yesterday (2 hot hotdogs, large soda and 2 ice creams later), middle of the 4th inning - we were baking (in the shade) like Thanksgiving turkeys - it's called Dry Heat!! Our Dodgers are scratching for a position in the play-offs.

I have had a hunch that inquiries at Secret! University would increase as things got worse out there in MortgageLand (the new name - MLJ - of our newsletter BTW), and it looks like it's coming true. With last week I started seeing our inquires increase, and being the worst one since this industry wide crisis began, I was excited about being able to offer our latest CD Lesson, it's called "Lesson for the Times - 301" (bottom of the page). It's a timely road map on how to survive the current industry wide 'correction.'

I'm starting the lead article for the September MortgageLand Journal newsletter, offering up an historical perspective on this and the previous three (3) 'corrections' I have witnessed. I genuinely feel it will help those who read it, understand what's happening and why.

2007-08-14T12:27:00.000-07:00

I have been working on this new lesson, almost non-stop since early yesterday afternoon, and at this rate it's going to be available on our website this week-end. Considering how fast things are changing out there for them, I bet many of our new students will appreciate this warp-speed launch; I truly hope it (and the solutions suggested in it) will help many of them not be as scared as they have been.

2007-08-13T09:18:00.000-07:00

Over these last couple of months, I have had several people who have known me for a while, suggest that I should develop a "Lesson for the Times" - since I have experienced first-hand four (4) of these consumer residential real estate mortgage industry corrections. They know my experience here, would be beneficial to all who would pick it up.

I have decide this morning to begin such an undertaking; I expect it will take me a couple of weeks to be thorough and finish it up. I'm going to explain in detail what I would do TODAY to survive this 'Extreme Industry Make-over' if I were a young mortgage broker experiencing all that's happening out there. I know how scary it can be, my own memory is very clear on how I have felt and what actions I have taken to make it to 40+ years in the industry.

I intend to have a pre-sale (begining in about a week) on this Lesson before it's complete, so folks can get their orders in first! If you have any ideas you think I should include - give me a call!

2007-08-10T11:02:00.000-07:00

A bit more on our stats today ... coming in a close second to our Mentor page, is the Certified Mortgage Professional page we have on our site. The CMP program is all about learning, and how to KNOW the answer/solution to a wide variety of industry issues, more than how to merely FIND an answer (like a high school research student on google). It too has been one of our top performers with an average PR (page rank) of 5.190, and during this same four month period, accounted for 18.821% of the total pages viewed on our site.

I like this particular program of ours a lot. Before I developed it, I searched Google for some of the others that were available, and virtally wet my pants laughing at the 'joke' qualifications to receive a CMP designation from all of the others! Ours is a lesson and a test, candidates need to pass with an 80% score, and do it "without looking up the answers." If YOU want to get a real kick, search this term on Google and read the qualifications of some of the, especially the NAMB and other trade associations ... they're a joke. That's the reason I developed ours, so our CMP designation will have real world meaning and value to our graduates.

2007-08-09T10:06:00.000-07:00

So, this morning as I was collecting the data from yesterday's website visitors to plug into my Excel spreadsheet (if I printed it out - it would be larger than my desk!), one thing struck me when I saw this phrase: "what do you need to know before becoming a mortgage broker" yielded a visitor to our website (we're #46 in Google on that one!) ... here it is: No matter where you rank in Google on any specific keyword or phrase, it only matters IF the person searching that term actually clicks to your website! So with 45 better ranked then us, did this guy click all of them? Or skip to page 7 and click us in PR position 46?

So we could have been #2 on that key phrase, but if the Google searcher had clicked the #1 link, they may have found exactly what they wanted, and never clicked us! Therefore, I see as I measure the various key words and phrases and their relative PR (page rank), it means little since it only counts if somebody clicks it! Obvious, sure ... but thought I would write down this random thought I had today. More tomorrow.

2007-08-08T10:52:00.000-07:00

I think I may have started seeing an emerging trend, right here in the middle of our 'Extreme Industry Make-Over.' As I've previously mentioned, in the Fog of War it's usually difficult to understand the outcome, while in the midst of chaos. Being as anal as I am about statistics, a characteristic I have had almost from the very beginning of my career, I'm going to share some confidential web stats with all of you this morning: You can draw your own conclusions from these facts; I'll tell you mine too.

There a number of key words and phrases which drive people to our various website pages, naturally some of them are better/more effective than others (in the top 10 on many & on page 38 etc. on some others) - but on average over the last 4 months our Mentor page has ranked (again an average) PR (Page rank) 15.785 through organic searches on the major search engines (Goodle, Yahoo, MSN, etc.). Not spectacular for an average, but moderately acceptable (our overall keywords & phrases are considerably better).

As it turns out, during this same period, 76.525% of all unique visitor traffic to our site, as a whole, have come from these same search engines (a number that I am quite proud of BTW).

Considering we have several dozens of pages on our website, I think it's remarkable that 28.439% of all who visited, read our Mentor page.

Therefore, the trend I think I'm beginning to see, is that people are looking to upgrade their own skill set, during this 'Make-Over' - so if they are a survivor, when they come out the other side they'll be stronger and more apt to succeed! And THAT'S GOOD NEWS!

2007-08-06T15:51:00.000-07:00

Before he moved out of the area, Paul was my dearest and closest friend. Athough we don't talk daily and have lunch together 4 times a week like we used to, we have kept in touch pretty much since then; I continue to have a special place in my heart for him and his family - all of whom I know/knew quite well also.

When I was an assistant manager at The Mother Company, my boss and I interviewed him for a job, he got hired and became my assistant. I participated in his training a lot. Later after we were both Managers of offices, he chased me all the way up the company corporate ladder (he was a strong competitor), and in the end passed me.

After almost a decade and a half I left The Mother Company (eight years before he finally did), and went out on my own. I heard an awful rumor Friday that his company was closing, he confirmed that to me 5 minutes ago. I am profundly sad for him and his wife Nicky, and their two grown sons Chris and Mark. I hope I can help them somehow, I intend to try.

2007-08-06T10:34:00.000-07:00

Right now, the consumer residential real estate mortgage loan industry is in what some call 'The Fog of War' - a bit tough to keep your bearings and see what's happening around you, let alone see the horizion and know which way to go; it's a real mess.

What's going on is very similar to what happened after Black Friday 1998, when the last cycle abruptly stopped (and the good times subsequently started). That will happen like that again (improved products and home values and better rates) sometime during the Fall of 2009. The intensity of today's situation is child's play as compared to the 1988 EXPLOSION - when most buyer of loans were in the Savings & Loan industry ... they ALL went out of business ... if you were a mortgage banker then - (funding loans on your own warehouse line and off-selling quarterly or so as I was) ... you would have been scared to death (I WAS!! - I remember feeling trapped) and maybe had a heart attack like many people did. THAT was the end of the world, this is merely a bump in the road, an ugly one yes, but not terminal. Soon, we'll probably see several Wall Street firm get 'convicted of felonies' and going bankrupt, weaker ones being bought out for pennies, merging, etc. - that's next from my memory of historical info. I doubt we'll see the MI companies all go BK (again), they're too busy refusing to pay claims - and they seem to be better at that then they were in the past - they and the title insurers will be waving the FRAUD flag a lot!

Everybody in the industry is a victim in one way or the other these days, and all of it coming from the GREED of the past decade ... anyhow, that's how I see it this morning.

2007-08-03T11:12:00.000-07:00

As I was thinking about writing the ‘shovel’ piece (for our August 1st newsletter), I recalled the thousands of LO’s I have communicated with in my capacity as a Teacher/Mentor for Secret! University, and as an employer these past several decades in the industry. It is fair to say, that nine out of 10 of them hoped they were strong capable sales/closer types, yet they clearly were not.

Unfortunately for so many of those fine people, the general climate and culture of their entry level job position focused on “sales” – and in many cases that notion frequently attracted the wrong attitude for professional customer contact/service. Even those they are not mortgage experts, they are indeed the face of the industry to the public, our ‘front line’ if you will.

Therefore, much of what I had to say about them, was not only directed to them but to their employers as well. The Broker/owners need to give these fine young people hope they can become a valuable part of the industry and that they have a long career future ahead of them … during this ‘Extreme Industry Make-Over’ we simply cannot afford to loose 9 out of ten of them.

If they would simply focus on problem solving and helping the customer make a decision with proper training they will develop into trusted advisor, underwriter/processor thinking individuals that customers trust their interests are being considered first, not being handled by a commissioned sales/closer like the guy that sold them their last used car!

The so-called ‘industry Guru’ types, that I mostly see as merely motivational speakers trained in pumping up the ego of sales types, also need a Make-Over themselves. Because I see their influences negatively infecting our entry level personnel, who need to portray themselves in a more professional manner, like others in the ‘fiduciary duty’ business.

I want these young LO’s – who today remain the largest segment of people employed in our industry – to have hope for their future, instead of being scared they can’t ‘sell’ without 100% LTV Stated 500FICO products available.

2007-07-28T11:54:00.000-07:00

Ever since I joined aol in 1995 I have been fascinated with the Internet, most folks my age I have found are generally pretty clueless about it, I have delightfully become an exception.

Many of you know in 1999 I developed a residential real estate mortgage brokerage website, to attract and process loan applicants (that worked quite well!) - then started to teach a live class (after I got my State teaching certification) "Website & Internet Originations" five years ago, which subsequently expanded into what is today the Secret! University learning center.

Since I first started my career in our industry, I have been very anal about statistics, never could figure out how or why that began inside my head - since I never was that much into math things in school - yet it is what it is.

One of the very first tasks I complete every morning, is to download and study our website visitor log ( I use three different software products to do that, they have different features is why I use 3 of them). As a result I have grown into a semi-knowledgable 'tech' sorta person about SEO and the like.

Today I was excited to note, we are ranked Number One on Google for the search term: "Mortgage Industry Education" ... even though we rank in the top 10 on many many dozens of keywords (in our industry niche), in the top 5 on more than a dozen or so, and number 1 or 2 in several as well ... our various results I track (and save in an excell spreadsheet) and am pretty proud of so far.

This particular one, just struck me today ... so I thought I would share ....

PS: Now, for those of you that don't know this, organic ranking in the major search engines change all the time, so we might not be #1 in 20 minutes (if you wanna check) but we should be close !

2007-07-25T13:06:00.000-07:00

Put the finishing touches on our August 1st free newsletter this morning; my shovel story will interest most who read it with an open mind. It's an example I have used verbally with most of my personal Mentor students for quite some time - thought putting it down on paper for all to see today, is just the right time. Our entire industry is going through a long over due Extreme Makeover.

BTW, our Dodger's are still in First Place in our Division!! Looks like besides Penny (agruably the best pitcher in the Big Leagues), Billingsley (7-0) is my new BFF! He's developed into a strong starter; and like I say "He's strong as garlic."

2007-07-21T09:38:00.000-07:00

For those of you who follow my thoughts here, I apologize for not adding anything in more than a week.

With all the turbulence in the industry, I have kept my focus on the many individual State law changes, and there's been a bunch - more than I'm sure the average LO or independent Mortgage Broker can keep up with. That's going to be another can of worms once those State lawmakers realize many of the originators are not in compliance with a lot of their changes, as that population generally doesn't follow industry news in trade publication - so they frequently miss the specifics, let alone the big picture.

The proposed Federal "Fiduciary Duty" Bill will have the most significant impact on the entire industry once it passes in my view. And ya know what? I'm puzzled to see just how many industry insiders (the big-shots I mean by that) are fighting it! Forcing a 'fiduciary duty' to their borrower/customer and making everybody comply with 'good faith and fair dealing' standards is NOT something anyone should resist, as I see it.

Way back (a hundred years or so) when I started off as a snot-nosed twenty-something type A high-charger know-it-all, my first industry employer insisted that we behave that way ... from day one! Therefore everyone that ever worked for me (there) or when I went out on my own, had the concept stuffed inside their brain - a good idea as I have always seen it. It protects all of us in the long run, to do the right thing by our customers. I hope it passes and becomes National law soon.

2007-07-12T17:35:00.000-07:00

I think I have previously mentionmed my oldest works at Dreamworks (recently merged with Paramount Pictures). He got moved over to Paramount from Dreamworks earlier this week and sent me this picture this afternoon! Look familiar?