{"id":246870,"date":"2010-01-29T13:37:45","date_gmt":"2010-01-29T18:37:45","guid":{"rendered":"http:\/\/mortgagenewsclips.com\/2010\/01\/29\/the-garrett-watts-report-january-29-2010\/"},"modified":"2010-01-29T13:37:45","modified_gmt":"2010-01-29T18:37:45","slug":"the-garrett-watts-report-january-29-2010","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/246870","title":{"rendered":"The Garrett, Watts Report (January 29, 2010)"},"content":{"rendered":"<p><a href=\"http:\/\/garrettwatts.com\/\"><img loading=\"lazy\" decoding=\"async\" style=\"border-bottom: 0px; border-left: 0px; display: inline; border-top: 0px; border-right: 0px\" title=\"garrett-watts1\" src=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/01\/garrettwatts1.png\" border=\"0\" alt=\"garrett-watts1\" width=\"388\" height=\"84\" \/><\/a><\/p>\n<p>To Our Clients, Colleagues and Friends,<\/p>\n<ul>\n<li>Lots of mortgage bankers talk about buying a bank, but aside from this writer, very few have ever done it.\u00a0\u00a0 So a huge round of applause to Rob Hirt , owner of RPM Mortgage, for closing on his purchase of Darien Rowayton Bank in Darien, Ct.\u00a0 We advised RPM on his acquisition plans in the very beginning of the process, but we take very little credit.\u00a0 It was all a result of Rob Hirt\u2019s persistence, doggedness and total focus.\u00a0 Way to go, Rob.<\/li>\n<\/ul>\n<ul>\n<li>No way were actors better in the old days.\u00a0 Johnny Depp is one of the current greats, and one of his most obscure movies, <em>Cry Baby, <\/em> showed that he\u2019s more than just a great actor. <a href=\"http:\/\/www.youtube.com\/watch?v=h_l_ilnMq0Y&amp;feature=related\">Watch these clips to see what a great singer and dancer he is<\/a>.\u00a0 And equally fun is t<a href=\"http:\/\/www.youtube.com\/watch?v=vjJsKICCt0I&amp;feature=related\">his one, also showing his great talent as a singer and stage performer<\/a> Like all Johnny Depp movies, this one takes place in good old Baltimore . And like all John Waters movies, this one features Patty Hearst in a cameo role.\u00a0 Yes, <em>that<\/em> Patty Hearst.\u00a0\u00a0\u00a0 Now shouldn\u2019t you get back to selling your loans or hedging or something?<\/li>\n<\/ul>\n<ul>\n<li>Lots of us have kids who\u2019ll be getting college acceptance letters soon, and they\u2019ll soon go off to bucolic campuses where they\u2019ll broaden their horizons, attend a variety of cultural events, and meet interesting people they\u2019ll become lifelong friends with.<br \/>\n<a href=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/01\/j16.jpg\"><img loading=\"lazy\" decoding=\"async\" style=\"border-bottom: 0px; border-left: 0px; display: inline; border-top: 0px; border-right: 0px\" title=\"j1\" src=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2010\/01\/j1_thumb6.jpg\" border=\"0\" alt=\"j1\" width=\"139\" height=\"202\" \/><\/a><\/li>\n<\/ul>\n<p>And making it even worse if it\u2019s private, it\u2019ll cost you $55,000 a year!\u00a0 For you <em>Animal House<\/em> fans, the screenplay was written by a member of the Dartmouth class of 1960, reflecting his experiences there, and the movie was actually filmed in Eugene at the University of Oregon campus.<\/p>\n<ul>\n<li>Do you eat breakfast with your spouse?\u00a0 Winston Churchill was asked if he did, and his response was \u201cMy wife and I tried it once about 40 years ago, and it was so awful that we haven\u2019t tried it since.\u201d<\/li>\n<\/ul>\n<ul>\n<li>It looks like Viewpoint Bank (FPFG) is going to fully demutualize, and this is one that actually merits investing in.\u00a0 So many mutuals don\u2019t have a real growth strategy and few use the capital for new lending growth. The new capital raised will be good for their warehouse customers.<\/li>\n<li>We were just driving past the Cal campus, and living in a college town is weird. Every year you grow a year older, but they, the college students, never get old. They are forever 18-22.\u00a0 It\u2019s just kind of interesting. Like living in a town filed with Peter Pans.<\/li>\n<li>Isn\u2019t it just perfect when two historical trends intersect at the <em>exact<\/em> same time?\u00a0 The Wednesday WSJ showed that movie-rental chain Movie Gallery will file for bankruptcy and close 1,200 of their 1,800 stores. <em>The very same day<\/em>, Netflix reported that they now have 12.3 million subscribers, up by 31% in the last year, and that they generated revenues for the quarter of $445 million.\u00a0 What a perfect example of what Schumpeter called the Capitalist Storm of Creative Destruction.<\/li>\n<\/ul>\n<ul>\n<li>Texas Capital had an outstanding quarter. Non performing loans stabilized, and they had loan growth + expansion of their net interest margin.\u00a0 Kind of a trifecta.<\/li>\n<li>From a client, regarding outsourcing our prisons: \u201c England outsourced their prisoners in the past.\u00a0 It\u2019s called Australia .\u201d<\/li>\n<\/ul>\n<ul>\n<li>Probably no one would find this of interest, but we were looking at the year-end numbers for Fair Isaac,\u00a0 and they\u2019re sitting with $382 million of cash and cash equivalents + equity of $586 million.<\/li>\n<\/ul>\n<ul>\n<li>At our last bank, we used to routinely originate SBA loans and sell them at 109-110, servicing retained, and no, that 9-10 point gain is not a typo. Prices dropped dramatically when the financial crisis hit, but they\u2019re recovering, and we hear that sellers are getting 108. Unlike the mortgage banking business which gives away too much to the loan officer, SBA loan officers almost never get a percentage of the total premium.\u00a0 The typical commission is a flat 50 bps of the loan amount. None of this 60-40 or 70-30 stuff.<\/li>\n<li>Doing a $1 million SBA loan and selling it at 108 is very cool. That\u2019s an $80,000 gain on that one loan and you\u2019ll get ongoing servicing revenue each month,<\/li>\n<li>Michigan is a tough state to lend in.\u00a0 Capitol Bancorp (CBC) has only 32% of its loan portfolio in Michigan , but 47% of their Non Performing Loans are there.<\/li>\n<li>Speaking of commission splits, we studied compensation among our client data base a few years back. Our conclusion was that higher commission splits seemed to have an initially positive impact on overall <em>revenue<\/em> as more loan officers joined the company, but once the higher commission splits had become the norm, it appeared to have a negative impact on overall <em>profitability<\/em>.\u00a0 Commission structures need to reward the company and not just the loan officer.<\/li>\n<li>Baseball\u2019s Opening Day is still 61 days away, but it\u2019s never out of season to read Ricky Henderson quotes. We\u2019ve met and talked to Ricky a number of times over the years, and he\u2019s not only the greatest lead-off hitter of all time, he\u2019s also an American original. Ask us sometime about his views on banks, bank failures, and CD\u2019s.\u00a0 But read (or re-read) his quotes. It\u2019ll be the best thing you\u2019ll read all week.<\/li>\n<li>We\u2019re speaking next month at the <a href=\"http:\/\/www.seattlemba.org\/blast\/20100223_Dinner.html\">Seattle Mortgage Bankers Association dinner<\/a>, and if you have nothing better to do on February 23<sup>rd<\/sup>, this is a pretty sharp group.<\/li>\n<li>Remember that photo last week of the guy getting married?\u00a0 We guessed that he might be wondering what his wife\u2019s sister looked like naked, but one client wrote that he was obviously wondering what Ben Bernanke would do with interest rates.\u00a0 No way.\u00a0 We contacted the fellow and he told us that he was wondering what <em>Bernanke<\/em> looked like naked. Speaking of which, who would you least like to see naked:<br \/>\n(a) Nancy Pelosi, (b) Barney Frank, (c) Joe Biden, (d) Hank Paulson, (e) Richard Nixon (when he was alive) or (f) Allan Greenberg.<\/li>\n<li>We were just listening to Tony Bennett, and we know this sounds blasphemous, but have you every thought that maybe he was a better singer than Sinatra? On the other hand, when it came to that slow dance, the one at the end of the evening, you always wanted a Sinatra song.\u00a0 And even if Tony Bennett had a better voice, it was always Sinatra you went for when you were making out, or hoping to.\u00a0 Speaking of which, what do today\u2019s teenagers listen to when making out?\u00a0 Nine Inch Nails?\u00a0 Snoop dog?<\/li>\n<li>A legend passed away Wednesday.\u00a0 J.D. Salinger (1919-2010) wrote <em>Catcher in the Rye <\/em>in 1945, and this wonderful novel went on to sell 60 million copies and is still used in high school classes everywhere. When you first read it at 14, it\u2019s hilarious.\u00a0 When you read it in your 20\u2019s, there\u2019s a sadness to it,\u00a0 and in your 30\u2019s you read it again and realize it\u2019s the tragic story of a young boy\u2019s life spiraling out of control. On the last page, \u2018\u201dThat\u2019s all I\u2019m going to tell about. I\u2019m sorry I told so many people. About all I know is, I sort of <em>miss<\/em> everybody I told you about. Don\u2019t ever tell anybody anything. If you do, you start missing everyone.\u201d\u00a0\u00a0 Goodnight Mr. Salinger. Goodnight Holden.\u00a0 You were America \u2019s first teenager, and while the writer who created you has died, you\u2019ll live on forever.<\/li>\n<\/ul>\n<p>We\u2019ve run out of things to write about, so as Arnold said in the<em> Terminator, hasta la vista, baby. <\/em>And when the Terminator came back from the future, isn\u2019t it weird that he\u2019d have an Austrian accent? By the way, we wrote the attached article 5-6 years old but it\u2019s every bit as relevant today as it was then.\u00a0 It\u2019s the <em><a href=\"http:\/\/new.garrettwatts.com\/images\/articles\/sevendeadlysins.pdf\">Seven Deadly Sins of Mortgage Bankers.<\/a><\/em><\/p>\n<p><a href=\"http:\/\/garrettwatts.com\/\">Garrett, Watts &amp; Co.<\/a><\/p>\n<p><em>\u201cHelping <\/em><em>lenders increase revenues, control costs, and better manage risk.\u201d<\/em><strong><em> <\/em><\/strong><\/p>\n<ul>\n<li>Joe Garrett\u00a0\u00a0\u00a0\u00a0\u00a0 (510-469-8633)<\/li>\n<li>Corky Watts\u00a0\u00a0\u00a0\u00a0 (408-395-5504)<\/li>\n<li>Mike McAuley\u00a0\u00a0 (281-250-2536)<\/li>\n<\/ul>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=BM2HTTaNciU:JtsUyhowZWQ: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=BM2HTTaNciU:JtsUyhowZWQ:D7DqB2pKExk\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=BM2HTTaNciU:JtsUyhowZWQ:D7DqB2pKExk\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=BM2HTTaNciU:JtsUyhowZWQ:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=BM2HTTaNciU:JtsUyhowZWQ:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=BM2HTTaNciU:JtsUyhowZWQ:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=BM2HTTaNciU:JtsUyhowZWQ:V_sGLiPBpWU\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/mortgagenewsclips\/qTBe\/~4\/BM2HTTaNciU\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To Our Clients, Colleagues and Friends, Lots of mortgage bankers talk about buying a bank, but aside from this writer, very few have ever done it.\u00a0\u00a0 So a huge round of applause to Rob Hirt , owner of RPM Mortgage, for closing on his purchase of Darien Rowayton Bank in Darien, Ct.\u00a0 We advised RPM [&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-246870","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246870","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=246870"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/246870\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=246870"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=246870"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=246870"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}