February 18th, 2011 10:50 PM by Eric Fang
We know that in the old days(before 2011), there weresome banks who were too big to fail, and the governmentdid try the best to save them. And indeed the bankswere saved(I don't want to mention the name(s)).
Today, I met a mortgage industry veteran, who was a VPof a very large mortgage broker company, and I was oneof the top originators then. And that company had hundredsloan originators nationwide during 2008-2009, and now most of the agents already left the company. And I heardthat the main reason for the failure was line of creditswas not managed properly during the busy times of 2009-2010.We locked lots of the loans then, but we could not closebecause we sold the loans too slow to the investors(the normal one week turn around turn into one month).Our clients were not happy, so were the loan originators,and the falter of the company was overnight. And the us goverment did not need to save them, and the company stilloperates the business in two states now.
That's one of the risks to expend the business. When thecompany is too big, we had better know how to manage the big monster.
We did have a very good conversation. We did talk a lot about the industry trend and the challenges ahead of usfor the wholesale loan originators and the possibilityor working together in the future(I am not sure whetherI want to do correspondent loans again yet).
Though there are lots of challenges ahead of us, we stillbelieve that we can survive since we have the trustsfrom our loyal clients and friends. When we have more business, we will still try our best to make our clients happy to get the deal done smoothly with the best rates on the market.