We're living through some interesting times in our industry. First, the passage of the Housing and Economic Recovery Act of 2008 (Public Law No. 110-289) was a very good idea, it will help a wide-cross section of Americans in so many ways (I translated it from Lawmaker/legislator back into English over a 3 week period in my Blog during August in case you don't want to read the seven inch stack of paper containing all the words in that legislation); it enabled the subsequent take-over (and a $200 Billion 'cash injection') of Fannie & Freddie which was long overdue (gotta straighten them out, they both been plagued with scandal and 'looting from within' for a decade), and THAT keep the CEO's of Fannie & Freddie from leaving with Big severance packages (they tried to get out of town with $25 Million, but 110-289 stopped that).
 Because of the heavy risk AIG has in insuring-backing many mortgage instruments (CDO's, MBS, etc.), they would have made a much bigger mess in our economy had they failed, they were/are too important to fail (plus all the Government did was make them a BIG [well secured/ collateralized] loan). Given what's been happening in the credit markets, all of this was necessary ....
Today's $700 Billion capital markets stability deal (TARP) now re-named the Emergency Economic Stabilization Act, Hank Paulson is trying to put together with Congress, it will make capital flow once again (in a lot of places here and abroad), but especially in the mortgage finance sector (that's been choking lately) ... and THAT'S real good for homeowners and everybody in our industry. We'll get through this, and then on to long over-due regulatory reform.
If you are on the origination/production side of the residential real estate mortgage lending industry yourself, you may very well know the sort of individuals who can help with this mess.
The single biggest issue facing the Treasury Secretary and all those that will vote to make his proposal (as modified) into Law over the next couple of days is … HOW to value those TOXIC assets. Although that is merely the first step, which will be followed by who and how to ‘hold’ them, the ‘wisdom and timing’ necessary to off-sell them at a later date, plus the ‘re-regulation of the oversight’ that we all saw was lacking the past several years (we don’t need any new laws - what we need is ENFORCEMENT AND AGGRESSIVE PUNISHMENT of wrong-doers who violate any of the 253 laws that regulate our industry already) … all of those challenges and others, will have different skilled player needed, so those tasks can go relatively smoothly … but back to Today … WHO’S the sort of individuals the TARP people will need to leap over this first hurtle?
Lower, mid-level, and administrative supervisors - those who have been in the trenches - who have been in residential mortgage underwriting for most of the past 10+ years (definitely since before the Aug ‘98 correction) and those with residential mortgage servicing employment during this same period, are the exact types that will be needed to work and guide those who are attempting to Value those Assets, so a sensible number can he offered to sellers and backed up by the logic of knowing the facts at the level of the people I encourage the TARP folks to engage.
If you know people like these, I strongly encourage you to influence them to make contact with their Congressional representatives, send their Resumes in, and follow through so they get considered as resources of Country needs to help get us all out of this mess ….
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