{"id":50440,"date":"2009-11-27T08:00:29","date_gmt":"2009-11-27T13:00:29","guid":{"rendered":"http:\/\/mortgagenewsclips.com\/2009\/11\/27\/the-garrett-watts-report-the-day-after\/"},"modified":"2009-11-27T08:00:29","modified_gmt":"2009-11-27T13:00:29","slug":"the-garrett-watts-report-the-day-after","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/50440","title":{"rendered":"The Garrett, Watts Report (The Day After)"},"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\/11\/garrett-watts18.png\" border=\"0\" alt=\"garrett-watts1\" width=\"310\" height=\"68\" \/><\/a><\/p>\n<p>To Our Clients, Colleagues and Friends,<\/p>\n<ul>\n<li>We always like it when governments sell off those things that can be better operated by the private sector, so we were pleased to read that Connecticut has sold off its 23 freeway rest stops.\u00a0 Private equity firm The Carlyle Group paid the State $178 million for the right to re-build and operate them.\u00a0 Most rest stop bathrooms are pretty gross, so maybe they\u2019ll do something about them.\u00a0 They also plan to put a Dunkin\u2019 Donuts at each rest stop.<\/li>\n<\/ul>\n<ul>\n<li>Remember how Apple\u2019s share of the PC market dropped to a low of 4.4% a few years back?\u00a0 Well, they win the Comeback Player Award with a 9.2% market share now.<\/li>\n<\/ul>\n<ul>\n<li>Here\u2019s an interesting office building.\u00a0 It\u2019s the corporate offices of an Ohio company that makes baskets.<br \/>\n<a href=\"http:\/\/mortgagenewsclips.com\/wp-content\/uploads\/2009\/11\/j1.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\/11\/j1_thumb.jpg\" border=\"0\" alt=\"j1\" width=\"156\" height=\"118\" \/><\/a><\/li>\n<li>Way too many companies we visit let the doc-draw person send docs to escrow without a second set of eyes taking a look at them.\u00a0 We were in a shop 5-6 years ago where this was the case, and here\u2019s what happened: They were doing a lot of 2-1 arms with a 4.5% rate for the first two years and 2% &amp; 5% caps thereafter.\u00a0 The doc-draw person assumed that a 5% life cap meant the loan could never go above 5%, which does sound pretty logical, so as a result of no one checking her work, she sent to title a ton of loans which were 4.5% for two years and then 5% for the next 28 years.\u00a0 Rates were quite a bit higher back then, and these loans had to ultimately be sold at 88.5 for an 11.5 point loss.\u00a0 If you don\u2019t have a second signature before docs go out, you should probably start doing so.<\/li>\n<li>Lenders who\u2019ve gone totally paperless tell us that their loans get purchased a minimum of one day faster!\u00a0 It was weird walking through San Francisco-based Bay Equity the other day and seeing literarily no loans files.<\/li>\n<li>To go paperless, we like what DataTrac has and we also like DocVelocity. Most of the companies we\u2019ve seen successfully make this transition have used the DataTrac piece, but there are other vendors we just haven\u2019t run across yet.<\/li>\n<li>Venezuelan Idiot-in-Chief Hugo Chavez is showing his true colors.\u00a0 He recently praised Carlos the Jackal, the terrorist who murdered innocent people for years throughout Europe, then praised Zimbabwe \u2019s Robert Mugabe and Iran \u2019s Mahmoud Ahmadinejad.\u00a0 To show the world that he\u2019s completely psycho, he then said that Uganda \u2019s Idi Amin was a good guy who was simply misunderstood.<\/li>\n<li><a href=\"http:\/\/new.garrettwatts.com\/images\/articles\/10keystosurvival.pdf\">Take a look at the attached Ten Keys to Survival in Tough Times.<\/a> Are there any specific ones you should pay attention to?\u00a0 We wrote this in 2007 when the mortgage world was falling apart, but we think it applies just as much today. Number two is critical (Maintain maximum liquidity) as is #7 (Commit to better financial reporting).\u00a0 When we look at it, though, they <em>all<\/em> still apply.<\/li>\n<li>Congratulations to MVP winners Joe Mauer and Albert Pujols.\u00a0 To those who nostalgically look back on previous decades as the good old days of baseball, today\u2019s kids will someday look back on the current era as <em>their<\/em> good old days.\u00a0 Watching Pujols has to be just as exciting as having watched Ted William s, Babe Ruth or Lou Gehrig 60-70 years ago.<\/li>\n<li>We just read a 1954 book about lawyers, and it made us wonder what corporate attorneys charged back then. Maybe $25 an hour, maybe $50?\u00a0\u00a0 And now $400 is totally normal, and some New York firms can charge up to $800-900.\u00a0 What\u2019s the most you\u2019ve seen?<\/li>\n<li>We used to think highly of Frontier Bank up in the Seattle area, but we just noticed that their Texas Ratio is 335%.\u00a0 Once you go over 100%, it\u2019s quite possible you\u2019ll fail, and at 150% it\u2019s highly probable you will.\u00a0\u00a0 A very simplified explanation of the Texas Ratio is that 100% means that your capital + your loans loss reserves is exactly equal to your bad loans. There\u2019s more to it than that, but that\u2019s enough to help you understand that for every $100 of capital &amp; reserves at Frontier, they have $335 of \u201cbad\u201d loans.<\/li>\n<li>If you\u2019re on the Board of a bank that\u2019s in trouble, you need to be very careful.\u00a0 The FDIC is going after Directors of failed banks by sending \u201cclaim letters\u201d informing them of the intent to sue.\u00a0 And don\u2019t assume that your D&amp;O insurance policy will protect you.\u00a0 Many of these policies have exclusions that don\u2019t pay on suits brought by regulatory agencies.\u00a0 We get asked occasionally to join various bank Boards, and this is a pretty big part of why we decline such invitations.<\/li>\n<li>Someone wrote us about the whereabouts of Rod P. of Capitol Commerce infamy, telling us that he lives in the multimillion dollar house that Capital Commerce \u201cbuilt\u201d. is wearing a Mohawk haircut, probably looks like an idiot, races cars, and is apparently living the good life. Question:\u00a0 Why isn\u2019t this bank robber in jail?<\/li>\n<li>Including mortgages in foreclosure, total FHA non-performing loans increased to 17.7% from 17.4%. Subprime delinquency rates increased to 26.4%.\u00a0 None of this is good news.<\/li>\n<li>Have you noticed that the stock of Hormel Foods is up 52% in the past year?\u00a0 Hormel makes the world\u2019s greatest breakfast food, Spam, and generates over $6 billion in revenue a year.\u00a0 Bacon and eggs is nice, but Spam and eggs is heaven.\u00a0 In Hawaii they serve Spam sushi.<\/li>\n<\/ul>\n<p>We used to think that we would end up someday with only three national papers, the <em>Wall Street Journal<\/em>, <em>The Washington Post<\/em>, and the <em>New York Times<\/em>.\u00a0 We can probably exclude the <em>Washington Post<\/em> now, as they just closed their remaining bureaus around the country.\u00a0 This symbolic retreat from being a truly national newspaper was evidenced by their statement that they need to \u201c\u2026 concentrate our journalistic firepower on our central mission of covering Washington \u2026 and the region.\u201d<\/p>\n<p>We were in Columbus, Ohio again last week, and we really like it!\u00a0 A clean, vibrant downtown, nice neighborhoods and friendly people.\u00a0 Next stop, two days in Seattle where we seem to go at least twice a month. If you have a company or bank in New Hampshire , Vermont , Hawaii or the Virgin Islands , call us and maybe we can give you a special deal. These are all beautiful places we\u2019d like to visit.<\/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.<\/em><\/p>\n<p>Corky Watts\u00a0 (<a href=\"mailto:Cwatts@garrettwatts.com\">Cwatts@garrettwatts.com<\/a>)<\/p>\n<p>Joe Garrett (<a href=\"mailto:Jgarrett@garrettwatts.com\">Jgarrett@garrettwatts.com<\/a>)<\/p>\n<p>Mike McAuley\u00a0 (<a href=\"mailto:Mmcauley@garrettwatts.com\">Mmcauley@garrettwatts.com<\/a>)<\/p>\n<div class=\"feedflare\">\n<a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=g9JO-ORF-oA:lMAmNS60_PA: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=g9JO-ORF-oA:lMAmNS60_PA:D7DqB2pKExk\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=g9JO-ORF-oA:lMAmNS60_PA:D7DqB2pKExk\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=g9JO-ORF-oA:lMAmNS60_PA:F7zBnMyn0Lo\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=g9JO-ORF-oA:lMAmNS60_PA:F7zBnMyn0Lo\" border=\"0\"><\/img><\/a> <a href=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?a=g9JO-ORF-oA:lMAmNS60_PA:V_sGLiPBpWU\"><img decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~ff\/mortgagenewsclips\/qTBe?i=g9JO-ORF-oA:lMAmNS60_PA:V_sGLiPBpWU\" border=\"0\"><\/img><\/a>\n<\/div>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/feeds.feedburner.com\/~r\/mortgagenewsclips\/qTBe\/~4\/g9JO-ORF-oA\" height=\"1\" width=\"1\"\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>To Our Clients, Colleagues and Friends, We always like it when governments sell off those things that can be better operated by the private sector, so we were pleased to read that Connecticut has sold off its 23 freeway rest stops.\u00a0 Private equity firm The Carlyle Group paid the State $178 million for the right [&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-50440","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/50440","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=50440"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/50440\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=50440"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=50440"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=50440"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}