Viva LeadsCon!

We're off to the first annual LeadsCon show in fabulous Las Vegas. Check back next week for a recap of the event. Looking forward to hanging with all the buyers, sellers and service providers who make lead gen such a fun space.

Time for a Refresher Course?

It could be time for mortgage brokers to hit the books. New compliance and licensing standards may be on the horizon.

Today, Treasury Secretary Henry Paulson proposed that imposing tougher standards on mortgage brokers could help us dig out of this current credit mess. He's asking for "strong nationwide licensing standards" for mortgage brokers in order to instill confidence back into the market.

"Regulations needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it," Paulson said.

How do you feel about nationwide licensing standards? In one respect, a nationwide plan could help brokers do more business across a variety of states and also cut down on redundant paperwork and compliance issues that arise up from doing business in multiple states. On the other hand, would turning over licensing to the Feds cause more problems by installing a one-size-fits-all policy that discounts local differences in real estate markets? I guess we'll have to wait and see exactly what the "tougher standards" are before making a decision. In the meantime, it might not be a bad idea to dig out your Real Estate Principals textbook.

On a side note, is anyone else distracted by Paulson's resemblance to 2-time AL MVP Cal Ripken Jr.?

Will the real Treasury Secretary please stand up?

The Fed Steps In

Today, the Fed moved to add liquidity to the credit markets. To make a long story short, they are allowing investment houses and banks to buy ultra-safe US Treasury Bonds in in exchange for debt that includes risky and out-of-favor mortgage-backed securities.

"Pressures in some of these markets have recently increased again," the Fed said in a statement. "We all continue to work together and will take appropriate steps to address those liquidity pressures." The other banks involved are the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank.

How will this affect brokers? With the Fed's move today and the recent increases in the FHA and Conventional loan amounts there is definitely an ability to do more deals than there was just a few weeks ago.

Now is the time to work on increasing your business. Get out there and close more loans!

FHA Loan Limits Increase! Governator Wants You to Close More Loans.

Yesterday, the FHA raised the limits on mortgages it guarantees. In a move that could help thousands of homeowners out here in California, the cap was increased from a former limit of $362,790, to a new high of $729,750 in certain parts of the state.

What does this mean to mortgage lead buyers? First off, it means that your pool of potential loans just got much larger. It also means that you can exercise some flexibility in your LTV cap, loan amounts and credit grades. Quite simply, it means that a lot of leads which were "no good" yesterday suddenly look very attractive!

Today is a great day to re-visit any borderline borrowers who you were unable to help over the past several months. Thanks to the new FHA programs, you may now be able to help them.

With our March-Mega Lead Madness promotion in full swing, it's also a great time to jump back into working leads in a big way. There is a ton of opportunity out there with the new FHA limits.

Even the Governator agrees! As Gov. Arnold Schwarzenegger said in prepared remarks, the new FHA limits “will help more working Californians achieve the American dream of homeownership through less expensive and more secure loans.”

Homeowners need your help. Now get out there and close more loans!

March Mega-Lead Madness is Back!

It's March! That means it's time for college hoops and BigMortgageLeads's annual March Mega-Lead Madness promotion. During March Mega-Lead Madness new customers can Receive 10 Free Leads with the purchase of 100. There's never been a better time to try our fresh, real-time Internet mortgage leads. Fill out our form and a representative will contact you within 24 hours to set up your account, or call us at 800-873-3066 to get started sooner. Act now, before the shot clock expires on this great deal!

Party Now, Pay Later

If America's negative savings rate, rising foreclsoures, and ballooning household credit card debt weren't enough reasons to worry about how we're going to pay for everything and everyone in the future, now comes the story on TheStreet.com about company issued 401(k) debit cards that allow people to borrow money against their retirement plan.

Wait, let me get this straight ... the idea of a 401(k) is to incentivize people to set money aside for retirement, but now we're going to let them borrow against their 401(k) to pay for vacations, iPhones and plasma TVs? Sounds like a great plan to me!

As expected, a few party poopers aren't that keen on the idea.

"By making it a debit card, you make it sound like the loan that you take on the 401(k) for everyday purchases," says Jean Setzfand, AARP's Director of Financial Security. "In our opinion, a 401(k) loan should only be taken as a loan of last resort, for a dire medical situation, or if there's no other way to get a home loan, not to go shopping."

Lighten up Jean! So what if we end up spending all of the money we had set aside for retirement? I'm sure social security will take care of all of us when we hit retirement age. For now, I say, "Party on!"

People Smarter than Us Disect the Sub-prime Crisis

I came across this article on the Freakonomics blog about Carmen Reinhart and Kenneth Rogoff, two economists from the National Bureau of Economic Research, who are working on a paper entitled, Is the 2007 U.S. Sub-Prime Financial Crisis So Different? An International Historical Comparison.

The authors have some interesting things to say about the current credit crunch and how it mirrors other economic downturns worldwide over the past 60 years. Surprisingly, our current problems aren't that much different than any other crisis since WW2 (basically, had you been studying Sweden's 1991 housing crash you could've seen our mortgage meltdown coming a mile away). As they explain, with a little help from Russia's preeminent novelist:

Tolstoy famously begins his classic novel Anna Karenina with "Every happy family is alike, but every unhappy family is unhappy in their own way." While each financial crisis no doubt is distinct, they also share striking similarities, in the run-up of asset prices, in debt accumulation, in growth patterns, and in current account deficits. The majority of historical crises are preceded by financial liberalization, as documented in Kaminsky and Reinhart (1999). While in the case of the United States, there has been no striking de jure liberalization, there certainly has been a de facto liberalization. New unregulated, or lightly regulated, financial entities have come to play a much larger role in the financial system, undoubtedly enhancing stability against some kinds of shocks, but possibly increasing vulnerabilities against others.

I'd suggest downloading the full paper here. It's only about 15 pages and even includes several color coded charts and graphs,.

For those of you who don't feel like going through the effort and just want to know when they predict this thing will all be over, the paper offers the following:

At this juncture, the book is still open on the how the current dislocations in the United States will play out. The precedent found in the aftermath of other episodes suggests that the strains can be quite severe, depending especially on the initial degree of trauma to the financial system (and to some extent, the policy response). The average drop in (real per capita) output growth is over 2 percent, and it typically takes two years to return to trend. For the five most catastrophic cases (which include episodes in Finland, Japan, Norway, Spain and Sweden), the drop in annual output growth from peak to trough is over 5 percent, and growth remained well below pre-crisis trend even after three years. These more catastrophic cases, of course, mark the boundary that policymakers particularly want to avoid.

Well said.