| How Many Net Branches Will Shut Down In 2007?
Will the fall of so many sub-prime lenders cause
many more net branches to shut their doors?
For a while now the sub-prime market has been out of control.
15 years ago someone was lucky to get an 85% full
DOC sub-prime loan approved. With reserves and a
DTI of under 45. The last few many 100% stated
sub-prime loans were funded.
These types of loans have never made any sense for
w2 wage earners at any LTV much less at 100%LTV.
Real underwriters looked at files in the past. The
days of common sense UW are long gone and clerks
now look at files for things that often have
little to do with a borrower’s ability to repay a
loan. It seems standards have gone down in nearly
every direction, so all of this mess seems long
over due. And if it continues how many net branch
companies will shut their doors this year as a
result of loan repurchases, and tougher audits?
I think the best way to be safe dealing with Net Branches is
to avoid a company with any sign of problems to begin with.
A List of Signs.
revoked state license(s)
fines from states
unstable lender lists.
cash flow compliance
un-paid vendors
un-paid recruiters
employees leaving
Senior management leaving
employees or IC’s who left and are now going public about abuses, ETC.
phone calls not returned
emails not returned
litigation
w2s or 1099s not sent out by required date.
w2s or 1099s sent out with "errors"?
low hiring standards
no experience required.
no job application or resume required.
loan officers are allowed to process loans at home, without being a licensed branch in their home state.
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