Been hearing that for a week now, as I follow up with potential equity partner/investor funders for my venture. Think I might spend 6 weeks on Copacabana Beach in Rio laying/ tanning on that semi-nude beach waiting for the magical time called ‘2010′ when everything will be wonderful when all the while I want to Race to The Finish Line!

This journey began as I perceived some initial indications of a positive economic recovery. During those five (5) months, I have watched as the stock market has gone from approximately 6,600 to 10,000. I have seen industry news articles segue from describing the housing and mortgage business as moribund – to flat – to rebounding off the bottom. From palpable panic over scant sources of warehouse facilities, I have witnessed several old and new sources enter or re-enter that market. While perhaps not equaling the number of facilities once available, it appears that financial organizations seem happy and willing to provide warehouse lines to companies with solid management.

Many of the folks I have spoken with, unfortunately, have only one housing/mortgage cycle under their belts, and/or seem to lack forward thinking ability. Initially, the problem of warehouse lending was the primary reason for rejecting the opportunity. Then came such short-sighted remarks, to wit, “… we’re scared of anything but Agency paper, Peter… there’s no liquidity…”, as if they couldn’t image there are literally hundreds of mid-sized banks and thrifts dreaming of getting back in (or entering) the mortgage business; and they couldn’t envision a renewed securities market with a return to a near normalcy in the not too distant future.

So, to conform to that skepticism (whether wrong-headed, as I believe, or not), I recently completely rewrote my business plan and cash flow pro forma to include the more popular FHA & Conforming loan products, stipulating that the roll out of the more profitable non-agency product would occur only when there are multiple secondary market exit strategies for same. Frankly, I expected a robust, positive reaction. However, all I’ve seen so far is a luke-warm uptick in interest.

I have seen industry news pieces in the past 60 days about a handful of mortgage veterans attracting investment capital and getting back into business. It is rather disheartening when I look at their experience and background which – not meaning to boast – is far inferior to my own.

I’ve shut down my mortgage professional educational & training facility (www.americanmoneycenter.com) so I could devote my efforts full time to this endeavor. I’m becoming more and more concerned that I’m about to start hearing the ever-dreaded “after the first of the year” stall, and that’s going to drive me to scream.

Once again, I would like to stress that the sooner we are up and running, the better. Every week of delay is another week the competition is maturing their own launch. The non-agency market WILL return. Those who are ready and poised to capture a substantial piece of this enormous market will garner significant profits.

In closing, I’m reminded of two old sayings; “Fortune favors the brave” and “He who hesitates is lost.”

Is ANYONE listening? If so, I implore you to earn yourself a big, fat fee by sourcing an investor looking for a tremendous ROI. It is NOT an *if*… or even a *when*… but *WHO* … my team and I …We are who!

I want us to get on with it, and head for the finish line; neither of us has the time for an e-mail pen pal, right? Please call me so we can get movin’.

Given the liquidity difficulties in the subprime secondary market, and today’s fashionable alternatives of FHA and Conforming loan products which have become ubiquitous, it has become necessary to modify our singular vision and offer the broader range of lending alternatives to fit the range of applicants the company’s future loan broker customers are seeing today.

Once the capital acquisition has been achieved, we will immediately develop a series of related subsidiaries due to the synergizes and quality control of those firms: (the engine which will drive the entire organization) an FHA, ‘Next Generation’ Subprime & Conforming nationwide wholesale residential real estate mortgage lending subsidiary, a public escrow company, a mortgage servicing operation, an equipment finance lease subsidiary, an insurance agency, a mortgage professional educational & training facility, and at IPO (3 or four years down-stream) an FDIC insured national commercial Bank.

At the end of this adventure into the capital raising sector of Wall Street, we’ll have a solid and well position organization which will stand the test of time and one both our customers and employees will be proud to be a part of.

Ok then, what sort of results have I accomplished? Well, for one thing, I know more than YOU! As of this morning, I know exactly 1,000 things that don’t work. So … if you were to try and raise $2 Million in these interesting financial times for such a venture, you’re gonna make those 1,000 mistakes too – like I already have. Therefore, I am fairly happy that I have learned those lessons … however now that reality has “taught me a lesson” I’m finally ready to hammer the check :-}

Secondary Transactions Listed, Sold
Around $858 million in mortgages owned by Residential Capital LLC were put up for sale by GMAC Inc. last month. Marshall Ilsley Corp. sold 800 primarily non-performing residential loans, according to an announcement. A portfolio of 321 single-family mortgages acquired in July by SilverLeaf Financial LLC is now being marketed on an individual loan basis, a news release stated.
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Mortgage Loan Exchanges Launch
DebtMarket announced its launch in August. Sellers list loan portfolios for sale on DebtMarket. Also launching last month was LoanMLS Inc. The company said in a news release that it is an online loan exchange providing a central information point for buyers and sellers.
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Warehouse Lending Opportunities
Southwest Securities FSB said in a statement that it hired a new representative to solicit warehouse lending business in the East and Midwest. Southwest said it provides residential funding capacity for U.S. mortgage bankers by taking a short-term ownership interest in the mortgages. Warehouse lending consultant Barry Epstein recently commented that banks don’t understand how lucrative warehouse lending can be. He warned that mega-banks will control the market if mid-sized mortgage bankers can’t find funding for their originations.
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Secondary Update
The Mortgage Bankers Association last month has proposed a draft purchase and sale agreement for whole loans. In a selling notice announcement, Fannie Mae said Refi Plus loans with loan-to-values above 105 percent can continue to be delivered beginning Sept. 1. Correspondent lender Affiliated Mortgage Co. has become a preferred investor for Lenders One Mortgage Cooperative, a press release indicated.

… so … my point? STAY UP TO DATE WITH EVENTS AND DON’T LOOK IGNORANT :-}

I have spent the better part of this Summer, working with Investment Bankers and others, trying to get a $2 Million equity investor/partner to help me start up a long over-due ‘Agency Alternative Next – Generation Subprime’ wholesale operation funding mortgage broker sourced Portfolio Quality residential real estate mortgage loans. As that becomes reality, we will be re-purposing our mortgage professional training and educational facility.

This will also result in a coming name change to AMC Institute, our learning center will be focusing instead on creating a completely new curriculum over these next several months, and we strongly encourage you and definitely invite you to contact us with your input on the sort of classes, lessons etc. you would like to see from us when we re-open in the Spring!

The Federal Housing Administration has decided that “direct endorsement” lenders should be fully liable for the mortgages they originate through loan brokers while saying that these third-party salesmen no longer need to register or meet the agency’s net worth requirements. The new policy change appears to be a major boost for brokers, whose ranks have been decimated during the housing and mortgage crisis. “Mortgage brokers will continue to originate FHA-insured mortgages through their relations with approved mortgagees,” the agency said. “However, they will no longer receive independent FHA approval for origination eligibility.” The new policy relieves brokers from filing audited financial statements with FHA and basically mirrors the hands-off approach that Fannie Mae and Freddie Mae follow with respect to brokers. FHA is making this change as part of a risk reduction effort (REDUCTION? R U KIDDING ME?) and refocusing of its resources. However, the agency is adopting a policy that prohibits brokers and commission-based lender staff from ordering appraisals. FHA commissioner David Stevens stressed that FHA is adopting appraisals policies that are consistent with the Home Valuation Code of Conduct but not the entire HVCC that Fannie and Freddie have adopted.

In another news piece I saw today the FHA Commissioned finally fess-up and said Yep, we’re below 2% capital requirement …. I’ll translate that for you: 2% in reserve and 7% in defaults … so his dumb solution is to open up FHA to every Tom, Dick & Harry mortgage broker (with no commercial office space, no audited financial, no FHA experience BUT plenty of experience on STUFFING 4 YSP on every loan)!

Listen up kids, our Government is getting stupider every day!!

Presently, as many of you know, it is a division of Americas Money Center, Inc. – therefore I’m thinking about changing its name to AMC Institute; before Americas Money Center, Inc. is sold, because it will undergo a major curriculum change after that capital event. One of the key people has suggested that it should possibly provide, in part, an education and training facility for the mortgage brokers who will be doing business with its new nationwide lending sister company. More specifically, possibly provide a particular training and testing section to award various compliance levels to the brokers who learn the company Underwriting Guidelines and Matrix the best. Possibly resulting in their files always being moved to the top of the pile (or whatever) … do to the Gold Star (or whatever) which they could achieve … so it’s a win – win.

Some sort of twist to that general concept, I’m thinking might be a very good idea!

Today I saw a statistic that the Government now controls 90% of the residential real estate mortgage industry (with FHA on the verge of exploding – something I told you all about more than a month ago – and the GSE’s in more trouble and getting tighter) – and that should SCARE THE CRAP outta you!

Better days are on the horizon :-}