Side Commentary and thoughts: Sorry I’ve been unable to post much over the summer here and at RCG. I’ve been exceptionally busy with lots of projects and family stuff. Plus, I’m freaking out that one of my kids is going to be a Freshman in high school starting in a week or so. But, I’m intensely following the developments of the Agencies (Freddie and Fannie) and the changing mortgage guidelines (FHA, Conventional programs) and how it will impact the market and what it means for positioning our small business going forward. Unfortunately, in the escrow business, our business is highly dependent upon how real estate agents and loan officers perform and have positioned their business to weather this storm. If they do no business, we follow suit. There are some exceptions to this, but it is mostly the way it is.
I could write lots of posts on the challenges escrow firms (true independents like our office that are not owned by mortgage brokers or real estate brokers or title companies) face when our incomes are derived from our customers (agents and lending industry) and not our paying clients: buyers, sellers and those refinancing. It is one of the other great wonders of the world and in my view, costly to consumers. I suppose you could say, “when in Rome, do as the Romans do.”
The IndyMac debacle was interesting because we received work from their Bellevue office. It was interesting because about a week prior to their FDIC takeover (which many argue quite effectively due in large part to the lovely Senator from New York, Mr. Schumer’s letter to the OTS which subsequently initiated some $1.3 Billion in depositor withdrawals in an 11 day time period) we e-mailed staff that we worked with and they indicated no talk of problems at all. Why is it that staff sometimes is the least likely to see the writing on the wall? Anyway, the rest is history. Losing the IndyMac work was not helpful.
Money is what drives this real estate market folks and the tougher it is to obtain financing the tougher time this market will have, both nationally and in our Puget Sound region. Following all the developments in the local and national scene has been exhausting to keep up with, but I must comment that I’ve really enjoyed the conversations here and the active debates.
I have to confess that I have never been so fascinated by this economic-environment-lesson in business, banking, finance and how it all works. I have learned so much, and yet still feel as if I’m not even scratching the surface of understanding it all. I know I don’t understand it all. If there is any discouragement or frustration I have about this correction, it is still centered and pointing clearly at the real estate industry’s moving parts (with emphasis on the lending community) for creating and fostering this mess. There are still countless industry participants that still blame the media for this (I heard this again at a BBQ I attended a few days ago). And, there are a lot of frustrated sellers who just can’t sell in this environment. Got some friends in that situation. It is not fun observing the financial bleeding and you can do nothing, never mind the social impacts and families being broken up over finances. The social-economic issue is for another blog.
WAMU
A few days ago Mrs. S-Crow received an e-mail from a loan officer/customer who is at WAMU. I presume that we were one of many recipients of the e-mail that discussed WAMU’s offer of 5% CD’s which is higher than most banks and credit unions are offering.
Calculated Risk also mentioned the development this afternoon. Lots of speculation about what this means for WAMU.
