“Metrocities Mortgage LLC says it’s paid an undisclosed sum to satisfy “known and unknown” repurchase claims on its past loans.

The move to retire past and future buybacks is one aspect of a roughly $125 million investment in Metrocities Mortgage by Sterling Partners, said Paul Wylie, Metrocities founder and chief executive officer.

“The fact that we have the foresight to settle up with investors means we don’t have to look over our shoulders as other lenders do as loans continue to go bad, probably over the next six quarters,” Wylie told Inman News. ”

http://www.inman.com/hstory.aspx?ID=64702

The LOs who made their living on subprime were also probably use to charging more per loan. They won’t cut it in a prime market.

It’s a cleansing that our industry needs.

http://www.raincityguide.com/2007/04/13/this-just-in-zero-interest-loans-at-a-cost-of-zero-with-a-monthly-payment-of-zero-apr-0/

Here is what I fear will happen: Just like with MILA, we will see the mortgage brokers that mainly originated only subprime, scramble to shift into the Alt-A and prime origination market. But there’s too much competition for those loans now and not enough business to go around. MILA couldn’t make the transition fast enough and ran out of money. I am hoping that we don’t see huge layoffs on the retail side. I really feel for people when this happens.

Maybe we should just rebuild the levy and pretend like our mortgage lending system isn’t built below sea level in a hurricane zone.

It is possible that the greedy gobblers might not be greedy gobblers. Maybe no one ever took the time to help them learn how to make money in this industry any other way.

Yes, I know there are unsavory loan originators. I also know there are people who try to finance investment properties as owner occupied and who overstate their income so they can buy homes they cannot afford. If a LO does this knowingly then they are commiting fraud too.

This mess should not be pinned 100% on LOs.

Woops…I don’t want to forget greedy Wall Street from this comment!

I’m hoping that what we’re going thru will correct the industry (as much as it can). I think we should see a lot of “scum LOs” be flushed down the crapper. (1) they probably existed mostly on subprime and stated income type loans which are not as available (2) it’s not quite so easy to make a buck these days (3) broker scum now needs to be licensed in the state of WA (unlike banker scum does not go through testing, finger printing and FBI background checks).

With the tightening of underwriting, less programs and less buyers, the greedy gobblers will dry up and go away.

What in my post makes you think I missed that point? It really sounds like -you- are the one missing the point. The point is that people are trying to talk about the problem with LO’s in general at this point in time while you just keep saying “Well I don’t do that.” The point is not that -you- are a terrible LO, it’s that the industry has attracted a lot of greedy, uneducated people looking to make a quick buck by screwing over their clients. And if -you- and other “good” LO’s don’t do something about it, then it’ll make all of you look like scum.

We all in the industry are to blame. It’s entirely our responsibility, and the ones who take the responsibility will be the ones who hold the keys to the lending industry in the next generation of lending.

Yes, it will be a hard time for us all. However, times of famine follow times of feasting, so hopefully we’ve saved up. The ones that haven’t simply will diminish away because they did not prepare.

Kindly,

Thanks for stopping by raincityguide. From your background in coaching, mentoring, and sales training, I imagine you understand the concept of helping people grow by pushing them outside their comfort zone. I call this being a teacher. On a widely-read blog like RCG, readers learn from watching what’s happening, even if they’re not entering the debate via comments. It’s called the fish-bowl method of facilitation.

When I hear LOs talk about the industy problems and offer statements like “well, I’M not doing any of that,” it’s really important to help LOs understand that even though he or she might do a great job, consumers judge the group as a whole, by the lowest common denominator. Everyone in the group is better off raising the lowest common denominator standards to a higher level.

Gee, I thought my response was quite tame. So, what would an “above the belt” response looked like?

Tony, I’m concerned for local retail mortgage brokers/LOs. I’m concerned about buyback provisions and more job losses. Am I nuts? What do you think’s going to happen?

In terms of mortgage experience, some of the new/newer LOs that I have met have been the most morally developed people in the classroom.

I don’t think the unethical outnumber the ethical.

There will always be a small percentage of people out there who have every intention of breaking the law. These are the folks that we need our regulators to go after.

Then there’s another small segment of people who are ethically gifted. Somehow, they always know what to do. I’ve met a few LOs that fall into this catagory. I don’t fall into this category; I am far from perfect.

I believe the majority of LOs are in the middle. They want to do the right thing, but they just don’t know what the right thing is.

This is where self-regulation can really help an emerging profession: By reaching the majority in the middle of the bell curve.

If the majority only rely on their own personal moral code, then that’s arguing in favor of subjectivism which dissolves into moral chaos, which pretty much describes the state of loan origination at this moment in history.

One person’s opinion of predatory lending is another person’s opinion of capitalism.