For our Clients, Colleagues, and Friends, | |
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For those of you wanting to know what earnings-per-loan for mortgage originators looked like for the 4th quarter of 2023, you’ll probably need to wait another 3 to 4 weeks. The 4th quarter always takes a bit longer. The MBFRF reporting deadline is not until the end of February, so the MBA Performance Report's number should be out toward the end of March. Below is a depressing trip down memory lane, and our guess is that the 4th quarter numbers won’t look good. Our guess is that they will come in at a 40 bps to 50 bps loss.
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The Texas MBA once again nailed it with its Southern Secondary Marketing Conference earlier in the week in Houston. Jared Edmonds of Gateway First Bank and Paul Pritchett of JP Morgan organized probably the best regional secondary conference we've been to in many years in terms of content, and Jared hosted Mike for a session on "Seven Habits of Highly Effective Secondary Marketing Managers." If you're a CEO who wants a good benchmark for your Secondary Marketing Manager, or if you're a Secondary Marketing Manager who aspires to be exceptional rather than average, be sure to look at the attachment: Seven Habits of Highly Effective Secondary Marketing Managers.
- One of Joe's brothers is a D.C. lobbyist, and here are his four rules of lobbying: (1) Never talk when a tape recorder is on. (2) Never write anything down. (3) Never talk on the telephone if you can talk face to face. And (4) never talk if you can wink. Always funny, but #3 is good advice for all of us.
- I love this item from Joe: "A few weeks ago, I mentioned that I was going to see if Radio Free Europe had led the Hungarians to believe that we’d support them if they rose up against their communist government. As you know, they did rebel in 1956, and without any aid from us, the Russian army rolled in and slaughtered thousands of young Hungarians. I wanted to read the transcript of the Radio Free Europe broadcasts to Hungary to see if we did have some responsibility for what happened, so I decided to go to Stanford’s Hoover Institution where the transcripts are kept. I was interviewed for half an hour about my intentions for seeking out this research and then was assigned a 10:30 a.m. to 3:30 p.m. time slot.
- "When I got there, I was given a locker. I had to put my phone, my hat, my pen, and my notebook in it. When the check-in person leaned over her desk and saw that my coat had pockets, I had to put my coat in there, too. I was then shown to my section of a long table where I would sit. There was a gray pad there, with instructions showing me that laptops should go in the upper left corner, pencil and papers in the lower right, and the box of original transcripts in the middle on the top. Here’s how you have to organize your workspace:
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- "The instructions also warned that you had to be fully visible at all times. If you opened the book and kept the lid up (below on the right), it would extend maybe eight inches, and I guess if you kind of crouched down, you could hide behind it. Here’s one of the boxes with the dreaded top extending up, a big no-no. They had people watching for this:
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- "I had reserved five boxes of 1956 transcripts, and while the list of what would be broadcast each day was in English, the actual transcripts of what was said were in Hungarian. Oh, well. But I haven’t given up. My next step is to try the National Archives.
- "One interesting side note is that I got to see how unattractive the Stanford campus is. There’s no there, there."
- The San Francisco Giants have signed Jordan Hicks, a pitcher whose fastball has hit 105 mph. Do you think Ted Williams could have gotten any hits off someone throwing 105 mph? (I do.)
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- Here’s UWM’s Mat Ishbia on an earnings call last year: “… everyone wants a rate drop, but I kind of like where it's at right now. It keeps going, and they keep building this monstrosity, if that's the right word, of an opportunity. And will that opportunity last for three months, six months, or three years? I don't know, but I'm going to be ready, and we're going to be ready at UWM when nobody else is. And when will it come? I don't know how big it will be. It's going to be pretty big…rates don't have to go to 3%. Rates go to 5.875% and you’ve got $4 trillion of loans that are refi eligible.” Question from Garrett, McAuley: Are you or will you be ready? You can bet UWM will be.
- A while ago we asked people to write us about what they might have done differently about their college experience. We completely forgot about it, but here, six months later, are some of the responses:
- “I would have taken advantage of much more. I should have double-majored and, stayed after college and gotten a master’s or doctorate in one of the two majors.”
- “I simply had an amazing experience despite picking a below-average school, mostly because it was free. My classes were so interesting that I graduated with 40 extra units. I had wonderful interactions with my professors (probably because I stood out as less dumb than the other dumb kids), I had loads of typical ‘college fun,’ and I got a fabulous education.”
- “I shouldn’t have joined a sorority. I spent all four years living with people pretty much just like me. I should have spread my wings more.”
- “I wish I had joined a sorority.”
- “I wish I spent more time on my social life. I was surrounded by attractive, bright, interesting, single women, something I didn’t appreciate at the time.”
- “I wouldn’t really change much. Maybe not kill as many brain cells, but that’s about it.”
- “I would have gone to a larger school instead of a smaller private school (close to home). I always wonder ‘what might have been’ had I ventured off instead of sticking with what I was comfortable with.”
- “I wish I’d kept a diary. It would be fun to look back on what it was like to be 20 again.”
- “I should have taken more obscure courses instead of ones I was comfortable with.”
- “My parents pushed me or go to Wellesley, an all-women’s college. Looking back, I wish I’d gone to a co-ed school.”
- Were you a Boy Scout? We bet you still remember word for word the Boy Scout Oath: “On my honor, I will do my best to do my duty to God and my country; to obey the Scout Law; to help other people at all times; to keep myself physically strong, mentally awake, and morally straight.”
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Remember when U.S. stamps honored great American role models like Lincoln, Franklin, and Washington? Here are some recent stamps, and here’s the question: What do these four have in common? Answer: Jimi Hendrix, Janis Joplin, Miles Davis, and Ray Charles were all heroin addicts. Nice role models, right?
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Joe recently came up with a list of his favorite movies, one through 100. Here’s the list, along with a little about how he did so with 3x5 cards, and how he started with over 300 favorites and narrowed it down to 100: My Top 100 Movies.
- Speaking of college, do college students still give each other nicknames? Here are some Joe says he remembers: We called Janet Cash “Johnny.” Jan Rosenbaum became “Rosebud.” Barry Schneider’s girlfriend was “Suzie Cream Cheese.” (Neither of us can remember why we called her that.) Linda McDonald became “Lyndon.” We called Kennedy Richardson “Jack,” as in Jack Kennedy. Although I didn’t know him, there was a bond trader on Wall Street everyone called “The Human Piranha.” Any fun names you remember from when you were in college?
- A reason for conspiracy theories might be that grand theories help us make order out of chaos. There isn’t some big conspiracy behind every historical event. But isn’t a lot of history just the result of mistakes, bad decisions, incompetence, compromise, distortions, corruption, stupidity… and bad (or good) luck?
- One of the "interesting" things about Berkeley is that everyone has an opinion on something, and even the most ordinary stores cover their walls with political statements. Joe told me how a hot dog place on Durant has the walls plastered with libertarian stuff, and the neighborhood grocery store on Claremont has political cartoons all around the check-out stand. Last week, he went to a plumbing supply place on San Pablo to buy some bathroom fixtures, and the owner there had all sorts of anti-bank stuff taped to the wall. Here's one that caught his eye for our medical profession readers:
- “The medical profession speaks out on the First Republic bailout: The allergist voted to scratch it, the dermatologist advised not to make any rash decisions, the gastroenterologist had a gut feeling about it, the neurologist thought the administration had a lot of nerve, and the obstetricians felt they were all under a misconception. The ophthalmologists considered the ideas short-sighted, the pathologists yelled ‘over my dead body,’ while the pediatricians said, ‘Oh, grow up.’ The podiatrists thought it was a step forward, but the anesthesiologists thought the whole idea was a gas, while the cardiologists didn’t have the heart to say no. In the end, the proctologists left the decision up to the a--holes in Washington.” Clever.
- Have you noticed that Hillary Clinton is starting to look a little like Queen Victoria?
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For those of you mortgage originators still losing money, how about considering this goal for the rest of the year?: Refusing to lose money in any single month. Period. We have clients who make money every month, month after month after month. One of them put it this way: “We’re just a blue-collar kind of company. We try to keep it really simple, and we just don’t spend more money than we take in as revenue. Calling it basic math is probably too fancy a term. It’s more like basic arithmetic.”
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Mike will pass along more of the ways our best clients made money in 2023 (hint: it's not only through servicing income) during the Lenders One Summit in Los Angeles this Tuesday. He'll share "A Look at 2023: How Some Members Made Money and Others Didn’t." There's a lot of great content at the L1 Summit, but don't miss his session.
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"Helping lenders increase revenue, lower costs, and better manage risk." | |
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“Pretend I’m a newly issued GNMA 6.5% MBS. Now will you
try to understand me?”
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