{"id":104160,"date":"2009-12-26T19:23:22","date_gmt":"2009-12-27T00:23:22","guid":{"rendered":"http:\/\/mortgagenewsclips.com\/2009\/12\/26\/the-garrett-watts-report-last-issue-2009\/"},"modified":"2009-12-26T19:23:22","modified_gmt":"2009-12-27T00:23:22","slug":"the-garrett-watts-report-last-issue-2009","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/104160","title":{"rendered":"The Garrett, Watts Report (Last issue, 2009)"},"content":{"rendered":"<p><a href=\"http:\/\/garrettwatts.com\/\"><img loading=\"lazy\" decoding=\"async\" style=\"border-bottom: 0px; border-left: 0px; border-top: 0px; border-right: 0px\" src=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2009\/12\/garrett-watts110.png\" border=\"0\" alt=\"garrett-watts1\" width=\"329\" height=\"72\" \/><\/a><\/p>\n<p>To Our Clients, Colleagues and Friends,<\/p>\n<ul>\n<li>Last week we made fun of the Wells Fargo 2010 calendar for showing black and female stagecoach drivers, chiding them that they looked like they were trying to be politically cool.\u00a0 Naturally, we heard from several Wells Fargo-ites, and sure enough, a Delia Rawson carried the U.S. mail for Wells Fargo back in the 1880\u2019s. And in an 1869 photograph, an unidentified African-American driver is seen guiding the Wells Fargo stagecoach out of Salt Lake City .<\/li>\n<li>Not that many of you are using private mortgage insurance, but here are the M.I. companies ranked by how much insurance they have in force. MGIC was the first private mortgage insurer, and without interruption for over 50 years, they\u2019ve always been the biggest.<\/li>\n<\/ul>\n<table class=\"MsoTableGrid\" style=\"border-bottom-style: none; border-right-style: none; background-color: #ffff99; border-collapse: collapse; border-top-style: none; margin-left: 113.4pt; border-left-style: none; -webkit-background-clip: initial; -webkit-background-origin: initial\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\" bgcolor=\"#ffff99\">\n<tbody>\n<tr>\n<td style=\"padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; padding-top: 0in; border: windowtext 1pt solid;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$220 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-left-style: none; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">MGIC<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$173 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">PMI Group<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$155 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">Radian<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$138 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">Glenworth<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$127billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">AIG (United Guarantee)<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$106 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">Republic<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"96\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">$ 57 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in;\" width=\"168\" valign=\"top\">\n<p style=\"text-align: justify; margin: 0px; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; color: black; font-size: 10pt\">Triad<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li>The First Lady in Japan recently told people in a TV interview that she visited Venus in a UFO and that in a previous life she knew Tom Cruise, who was Japanese.\u00a0 Her husband, the Prime Minister, seems unconcerned.\u00a0 Can you imagine if Michelle Obama said something as weird as that?\u00a0 Or Mamie Eisenhower? Footnote to History:\u00a0 If Ohio Congressman Dennis Kucinich had been elected, we would have had a First Lady with a pierced tongue.\u00a0 And probably a few tattoos.<\/li>\n<li>A client at an Idaho bank asked us about Scorecards for loan officers, and we suggested that the following be tracked:\u00a0 (1) Volume, (2) gain-on-sale margin on all their loans, (3) delinquencies, (4) early payment defaults, (5) early payoffs, (6) percentage of business that is purchase v. refinance, and (7) pull- through.\u00a0 This would allow you to compare each loan officer to the companywide average.\u00a0 Maybe give them a point for each of those seven areas where they\u2019re better than the company average and take away a point when they\u2019re below.\u00a0\u00a0 That way, the higher the score, the better the loan officer, with a 7.0 being the best. For a bigger organization, maybe score them by what quartile they\u2019re in.<\/li>\n<li>We should note that Comptroller of the Currency John Dugan\u2019s term expires in the summer of 2010.\u00a0 We don\u2019t see you national bank CEO\u2019s shedding many tears.<\/li>\n<li>On Christmas day in 1776 George Washington had one of his few early victories by crossing the Delaware River in the middle of the night and defeating the mercenary Hessians in Trenton .\u00a0\u00a0 It may have been his first victory.<br \/>\n<a href=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2009\/12\/j11.jpg\"><img loading=\"lazy\" decoding=\"async\" style=\"border-bottom: 0px; border-left: 0px; border-top: 0px; border-right: 0px\" src=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2009\/12\/j1_thumb1.jpg\" border=\"0\" alt=\"j1\" width=\"350\" height=\"207\" \/><\/a><br \/>\nAfter you\u2019ve read about every great American and every great President, you always come back to Washington as the greatest of them all, the greatest American and the greatest President.\u00a0 Jefferson may have been the greatest American in defining what human rights really meant, but he never freed his slaves, even upon his death.\u00a0 Washington did.\u00a0 His will stipulated that his slaves should be freed when he died.<\/li>\n<li>Another historical event on or around Christmas was December 26, 1991 when the Supreme Soviet met and formally dissolved the USSR .\u00a0 Karl Marx wrote of enslaved workers throwing off their chains, yet nothing enslaved more people and did so more cruelly than the Communism he spawned.\u00a0 Although he didn\u2019t murder millions like Stalin or Mao, he deserves a spot in Hell right next to them.<\/li>\n<li>We wrote last week about Franklin Resources paying a dividend continuously since 1981, and someone wrote us that \u201c Franklin&#8217;s dividend history is impressive but pales in comparison to Proctor and Gamble (PG).\u00a0 PG has paid a dividend every year since 1891 and has raised its dividend every year for the past 52 years.\u00a0\u00a0 And IBM paid its first quarterly dividend in April 1913&#8230; and hasn&#8217;t missed a quarterly dividend since that time.\u201d\u00a0 Impressive.<\/li>\n<li>A certain number of our clients are starting to retain servicing, so we\u2019d point out that the biggest sub-servicer is Cenlar with $92 billion, with Dovenmuehle #2 with $70 billion.\u00a0 Both have very good reputations.<\/li>\n<li>\u201cA Toyota \u2019s a Toyota .\u201d\u00a0 It cleverly reads the same forwards and backwards. By the way, if you\u2019re a member of the Grammar Police, is it forward or forwards?\u00a0 We can never remember how that works.<\/li>\n<li>We were reading a report on Colony Financial, a newly public REIT.\u00a0 They just made a loan to giant homebuilder Wm. Lyon Homes, at, get this, 14% + an origination fee of 3%.\u00a0\u00a0 It\u2019s a first lien five-year loan.\u00a0 Sounds like Wm. Lyon was pretty desperate.<\/li>\n<li>There have always been lots of good reasons to live in Baltimore , and one of them used to be\u00a0 watching the Baltimore Orioles.\u00a0 Their manager for years was Earl Weaver, who holds the record for being tossed out of more games than anyone in baseball history. This is a hilarious video of his being tossed out of game once.\u00a0 By the way, did you ever wonder what happened to the St. Louis Browns?\u00a0 In the 1950\u2019s they moved to Baltimore and changed their name to the Orioles.\u00a0 You\u2019ll really laugh out loud at this:\u00a0 <a href=\"http:\/\/www.youtube.com\/watch?v=kl-4FSRYagc\">http:\/\/www.youtube.com\/watch?v=kl-4FSRYagc<\/a><\/li>\n<li>We have a thought on what capital levels should be, essentially just requiring more capital as you get bigger. Our theory is that with increased size comes increased complexity, and managing extraordinarily complex organizations such as $2 trillion banks becomes, at best, extremely difficult. We\u2019d propose something like this:<\/li>\n<\/ul>\n<table class=\"MsoTableGrid\" style=\"border-bottom-style: none; border-right-style: none; border-collapse: collapse; border-top-style: none; margin-left: 1.45in; border-left-style: none\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td style=\"padding-bottom: 0in; background-color: #ccffcc; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial; border: windowtext 1pt solid;\" width=\"168\" valign=\"top\" bgcolor=\"#ccffcc\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\"> Size of bank<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ccffcc; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-left-style: none; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ccffcc\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">Tier One Capital Risk-based<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">Under $100 million<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">6.00%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$100 &#8211; $500 million<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">6.25%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$500 million \u2013 $5 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">6.50%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$5 billion &#8211; $50 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">6.75%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$50 &#8211; $250 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">7.00%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$250 &#8211; $500 billion<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">7.25%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td style=\"border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.75in; padding-right: 5.4pt; border-top-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"168\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">$500 billion and up<\/span><\/span><\/p>\n<\/td>\n<td style=\"border-bottom: windowtext 1pt solid; padding-bottom: 0in; background-color: #ffff99; padding-left: 5.4pt; width: 1.25in; padding-right: 5.4pt; border-top-style: none; border-left-style: none; border-right: windowtext 1pt solid; padding-top: 0in; -webkit-background-clip: initial; -webkit-background-origin: initial;\" width=\"120\" valign=\"top\" bgcolor=\"#ffff99\">\n<p class=\"MsoNormal\" style=\"text-align: center; margin: 0in 0in 0pt; font-family: 'Times New Roman'; font-size: 12pt\" align=\"center\"><span style=\"font-family: 'Comic Sans MS'; font-size: x-small;\"><span style=\"font-family: 'Comic Sans MS'; font-size: 10pt\">7.50%<\/span><\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>We\u2019re making this up as we go, but we do think the general idea might have some merit.<\/p>\n<ul>\n<li>As for complexity as a function of size, think about a small community bank. They really only have 4-5 moving parts:\u00a0 The vast majority of their earnings are a function of (1) the yield on their loans, (2) the cost of their deposits, (3) fee income, (4) overhead, and (5) credit quality.\u00a0 Now think about Citigroup or Wells Fargo or any other mega-bank.\u00a0 How many moving parts do they have?\u00a0 Dozens?\u00a0 Hundreds?\u00a0 Do Vikram Pandit or Jamie Dimon really know what\u2019s going on in every division and every nook and cranny of their banks?<\/li>\n<li>In a sign of tough times for families, the WSJ reported that 4.3 million families had their gas and electricity turned off this year.\u00a0 We read years ago that people will pay their Cable TV bill even when they don\u2019t pay the mortgage.<\/li>\n<\/ul>\n<p>\u00b7 We just read that a little over 20% of mortgage insurance claims are being denied these days. Moody\u2019s says that the historical denial percentage has-been around 7%.<\/p>\n<p>\u00b7 We\u2019ve noted here before that the most profitable mortgage banking operations close 8-10 units per salaried employee, and that the very best close 12 per employee.\u00a0 Joe Cliver of DocuTech wrote that he was at a company in Massachusetts a couple weeks ago that funds 15 loan per FTE.<\/p>\n<p>Even with about 140 bank failures this year, there have been less than 175 in the last three years.\u00a0 That\u2019s out of 8,000 banks for a total of 2.18%.\u00a0 If you look at the last three years, what percentage of <em>mortgage bankers<\/em> folded up, 20%&#8230;.30%&#8230;40%?\u00a0 More?\u00a0 Now look at some interesting stuff from the <em>Banc Investment Daily<\/em>, showing that the average bank in this country is 57 years old.\u00a0 If you measure it on an average that\u2019s weighted by asset size, the average bank is 90 years old.\u00a0 Is there even one mortgage bank that\u2019s 57 years old, let alone 90 years old?<\/p>\n<p>Happy New Year, and have a great 2010!<\/p>\n<p><a href=\"http:\/\/garrettwatts.com\/\">Garrett, Watts &amp; Co<\/a>.<\/p>\n<p><em>Helping mortgage lenders increase revenues, control costs, and better manage risk.<br \/>\n<\/em><em> <\/em><\/p>\n<p>Joe Garrett\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 (<a href=\"mailto:JGarrett@GarrettWatts.com\">JGarrett@GarrettWatts.com<\/a>)<\/p>\n<p>Mike McAuley\u00a0\u00a0\u00a0\u00a0\u00a0 (<a href=\"mailto:MMcauley@GarrettWatts.com\">MMcauley@GarrettWatts.com<\/a>)<em> <\/em><\/p>\n<p>Corky Watts\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 (<a href=\"mailto:CWatts@GarrettWatts.com\">CWatts@GarrettWatts.com<\/a>)<\/p>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=Kdp_rMHBMe4:iQYg4X4us5s:yIl2AUoC8zA\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?d=yIl2AUoC8zA\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=Kdp_rMHBMe4:iQYg4X4us5s:D7DqB2pKExk\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=Kdp_rMHBMe4:iQYg4X4us5s:D7DqB2pKExk\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=Kdp_rMHBMe4:iQYg4X4us5s:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=Kdp_rMHBMe4:iQYg4X4us5s:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=Kdp_rMHBMe4:iQYg4X4us5s:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=Kdp_rMHBMe4:iQYg4X4us5s:V_sGLiPBpWU\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/mortgagenewsclips\/qTBe\/~4\/Kdp_rMHBMe4\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To Our Clients, Colleagues and Friends, Last week we made fun of the Wells Fargo 2010 calendar for showing black and female stagecoach drivers, chiding them that they looked like they were trying to be politically cool.\u00a0 Naturally, we heard from several Wells Fargo-ites, and sure enough, a Delia Rawson carried the U.S. mail for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-104160","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/104160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=104160"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/104160\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=104160"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=104160"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=104160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}