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<\/a><\/p>\nTo Our Clients, Colleagues and Friends,<\/p>\n
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- Doesn\u2019t the outpouring of American aid, from both the public and the private sector, show once again that Americans are the most generous people on this planet?<\/li>\n
- Is it time to buy timeshares? We snooped around a little and were blown away by how cheap some of these have gotten. When everyone is selling, it\u2019s probably a good time to be buying.<\/li>\n
- Oops, we meant to include a link to the clip from Splendor in the Grass<\/em> last week but accidentally linked to an Elvis Presley clip.\u00a0 Here\u2019s the scene we intended: http:\/\/www.youtube.com\/watch?v=YtO5rF-ORWc&feature=related<\/a><\/li>\n
- If you work for GMAC, does that mean you work for the government? We\u2019re just kidding, but the government does own 56% of the company.<\/li>\n
- Have you been following the imminent foreclosure of Stuyvesant Town and Peter Cooper Village in New York City ?\u00a0 This is New York \u2019s biggest apartment complex, with over 11,000 units.\u00a0 Here\u2019s the deal: (1) Tishman Speyer and Blackrock bought it for $5.4 billion in 2006. (2) Each invested $112 million, raised capital from other investors, and got a $3 billion first mortgage. (3) Piggybacking on the 1st, they simultaneously got a $1.4 billion second mortgage. (4) They got the $3 billion first mortgage from Wachovia, but (5) Wachovia securitized it and sold most of it. (6) Who bought the securities? The biggest investors are FNMA and Freddie Mac.\u00a0 Analysts say the soon-to-be foreclosed property has dropped in value from $5.4 billion to about $1.8 billion.<\/li>\n
- We wrote of hero Miep Gies last week, and it got us to thinking about our childhood heroes. One was cowboy star Roy Rogers. He represented the Western virtues of straight talk, courage, honesty, decency, courtesy to women and a dedication to the law.\u00a0 He always fought by the rules, and if you think back, he never once killed anyone.\u00a0 When he was forced to use his gun, he never killed people it but would just shoot the gun out of the bad guy’s hand.\u00a0
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<\/a> \u00a0<\/em><\/p>\n
\n<\/em>If you grew up as a little kid in the fifties, you loved him.\u00a0\u00a0 He had a wife named Dale, a dog named Bullet, (or maybe vice versa) and a horse named Trigger. He was just a TV character, but he was a great role model for kids.<\/p>\n- \n
- The MBA is predicting that total mortgage volume will be down 40% in 2010, with refinances off 60%.\u00a0 We\u2019re seeing too many budgets that show the company\u2019s volume increasing<\/em> this year.\u00a0 Unfortunately, plans that assume growth also have to assume all the things that go with growth, the main one being increased spending.\u00a0 If you insist on such an optimistic budget, how about also having a shadow <\/em>budget that\u2019s more reflective of falling loan activity?<\/li>\n
- It\u2019s a sad time for gourmets everywhere. Donald Goerke died last week, and he was the Campbell Soup executive who invented Spaghetti-Os, one of nature\u2019s more perfect foods.<\/li>\n<\/ul>\n
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- We were at a mid-Atlantic Bank not too long ago, and the CEO was livid over secondary market leakage.\u00a0 He was angry at the head of secondary and<\/em> their hedging advisor.\u00a0 Our audit revealed that processors had mislabeled a bunch of non-owners as owner-occupied loans, and they naturally took a big hit when they were sold.\u00a0 Two lessons here:\u00a0 (a) Figure out first why certain losses have occurred before you start assigning blame (it\u2019s often not as obvious as it appears), and (b) how about assigning the losses to the true source of the problem, in this case, production?\u00a0 You need to isolate such situations from your gain-on-sale calculation or you\u2019ll get a highly inaccurate picture of your secondary marketing department\u2019s performance. Capiche?<\/li>\n<\/ul>\n
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- This sounds callous, but the devastation in Haiti may actually benefit that poor country.\u00a0 Billions of dollars are going to flow into Haiti as near-total reconstruction takes place, and all that money will create jobs, new businesses, and for some, real wealth. There will probably be lots of corruption, but still, lots of those dollars will work their way into the economy as they\u2019re spent on food, goods and services. The human toll is incalculable and the loss of life unimaginable.\u00a0 But the new wealth that will come could create a middle-class, and middle-classes always demand (and get) democratic institutions. In a perverse way, the horrible disaster may drag the country out of its desperate poverty and toward a liberal democracy that acts in the best economic interests of its citizens.<\/li>\n
- We get asked a lot how we write this newsletter, and the answer is that it\u2019s much easier than you might think. We keep it open on our computer desktop, and when we see or think of something interesting, we jot it down.\u00a0\u00a0 It\u2019s written 30 seconds here, 60 seconds there.\u00a0 When it looks like we have about 15-16 bullet points, we edit it (albeit poorly) and send it out.\u00a0 If we tried writing it all at one sitting, it just wouldn\u2019t be the same.\u00a0 We tried it once, and it came out boring and self-conscious.<\/li>\n
- You know what cracks us up the most about our newsletter? About 3-4 times a year, we\u2019ll find someone who takes our newsletter, removes our names at the bottom, and sends it out under his company name!\u00a0 We don\u2019t get all excited about it, and it mostly makes us wonder who these people are.\u00a0 Can\u2019t you just see one of the guy\u2019s loan officers saying \u201cHey, Jack, I like our new newsletter, but I had no idea you liked baseball so much.\u00a0 You always said you hated it.\u00a0 And what\u2019s all this stuff about Cal and growing up in the fifties?\u00a0 If you went to Cal , why do you have that Oregon State diploma on the wall?\u00a0 And the fifties?\u00a0 Jack, get a grip. I\u2019m your twin brother, and we were both born in 1977!\u201d\u00a0<\/li>\n
- Last week we mentioned the coffee mugs given out by Farmers National Bank. We actually meant Farmers Bank & Trust, a great Kansas bank.\u00a0 They have a very successful mortgage operation, and one of the things we like is that they\u2019re always trying to improve and perfect their processes.\u00a0 They have an intellectual curiosity about the business that\u2019s refreshing.\u00a0 We liked them so much that we not only took one of their coffee mugs, but we also opened up a deposit account there.<\/li>\n
- The attached article is a year old, but we think it asks questions that still haven\u2019t been answered.<\/a>\u00a0 Maybe the Congressional hearings going on will get past management and question some bank Directors who seemed AWOL\u00a0\u00a0<\/li>\n
- If kids get heroes like Roy Rogers from watching them on TV, is there a generation that will look upon Richard Simmons as their hero? Here\u2019s the fitness guru himself, in all his embarrassing glory.
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<\/a><\/li>\n<\/ul>\nShouldn\u2019t there be a law about men wearing short shorts in public?\u00a0 Last year National Enquirer<\/em> caught Arnold Schwarzenegger on film wearing a Speedo bikini bottom at the beach, and Speedo\u2019s just don\u2019t look right on guys over the age of about six.\u00a0 We still have nightmares about Arnold in his G-string swimsuit.<\/p>\n
\u00a0<\/em><\/h6>\n
We\u2019ve been writing about leakage, and we\u2019ve gotten quite a few responses. Different companies have different ways of doing the calculation, but the important thing is that many of you are really focusing on it now.\u00a0 If you\u2019re uncertain about the methodology, your Hedging Advisory Service can give you guidance.\u00a0 Also, you don\u2019t want to include your hedging cost but should treat that separately. Your Advisor is probably charging you 1-2 bps, so it\u2019s not going to make a huge difference if you do include it, but don\u2019t waste your time trying to figure out the cost of the bid-ask spread. <\/em><\/p>\n
\u00a0<\/em><\/p>\n
And finally, for all you Latin lovers, here are two phrases to give to your internal audit or quality control departments: <\/em>Nil credam et omnia cavebo (Believe nothing and guard against everything) and Quid custodiet ipsos\u00a0 (And who shall guard the guardians?).<\/p>\n
We\u2019re back from New Jersey and Texas and off to Ohio and Seattle , so no newsletters for another week or so.\u00a0 But we\u2019ll see you s soon as we get back.<\/p>\n
Garrett, Watts & Co.<\/a><\/p>\n
\u201cHelping<\/em> <\/em>mortgage lenders increase revenues, control costs, and better manage risk.\u201d<\/em><\/p>\n
<\/em><\/strong><\/p>\n
Corky Watts\u00a0\u00a0\u00a0\u00a0 (408-395-5504)<\/p>\n
Joe Garrett\u00a0\u00a0\u00a0\u00a0\u00a0 (510-469-8633)<\/p>\n
Mike McAuley\u00a0\u00a0 (281-250-2536)<\/p>\n
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\u00a0 To Our Clients, Colleagues and Friends, Doesn\u2019t the outpouring of American aid, from both the public and the private sector, show once again that Americans are the most generous people on this planet? Is it time to buy timeshares? We snooped around a little and were blown away by how cheap some of these […]<\/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-194046","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/194046","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=194046"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/194046\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=194046"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=194046"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=194046"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- If kids get heroes like Roy Rogers from watching them on TV, is there a generation that will look upon Richard Simmons as their hero? Here\u2019s the fitness guru himself, in all his embarrassing glory.
- It\u2019s a sad time for gourmets everywhere. Donald Goerke died last week, and he was the Campbell Soup executive who invented Spaghetti-Os, one of nature\u2019s more perfect foods.<\/li>\n<\/ul>\n