GMAC mortgage company is shutting down its retail operations, offices, loan officers et al. In our office we have a GMAC representative who was given the news today. He will have a space till October and then they are closed. I believe they have been in business since 1982 and were in the top 10 of mortgage originators. One by one the market is dissolving the players who can't continue to fund in a profitable manner.
This is trying times, the worst since the great depression. Although, I believe we will turn the corner after the election the field is full of broken dreams. Less players and a need for the government to assist in new good loans. The past is the past, those loans are clearing the books with record foreclosures. In many parts of the country foreclosures comprise over 40-45% of the sales. This will eventually end. The property and mortgages in question are mainly the sales in 2005 area and later. Most areas report about a 30% drop in pricing from the highs. That would not wipe out most properties bought in 2004 and earlier in most areas.
At some point we will clear the books of bad debt. When this happens we can begin a new. Lets hope this time another financial genius doesn' t come up with a plan to innovate the industry with great ideas of prosperity for all.
Richard
That's too bad for your GMAC Rep. Everyone seems to be barely hanging on. Those that can hang on will see good days ahead I do believe.
Yep, my favorite mortgage guy called me today about this....he's only going to be around until the middle of this month though!
Too bad "clearing" the books has to always hit so close to HOME!
I guess I shouldn't be surprised by this. But...I'm surprised by this!
I think it is that they are having trouble funding loans. I think they have been out sourcing to local banks at very little margin.
Yes, what survives will flourish one day.
We must all hang on!
Richard
Richard- "What survives will flourish one day" how true.
Joe
Yes, very close to GMAC folks in Michigan. They were basically giving away the farm just to stay competitive, which obviously caught up to them. Sad, but nature of the beast these days.
This is really beyond scary when you think about all the ramifications of the recent events in real estate and related industries. I hope we bottom soon. This is getting old.
It is getting harder and harder to tell who will be standing from one day to the next. Our GMAC office has closed and Countrywide will e gone in a couple of weeks. I don't even see a mortgage person anymore. They used to come by every week with goodies but nothing now. I hope the bottom does come soon but I think it will be 2010 at the soonest.
Thornburg mortgage made it official that they were out of money and closing. Trying times indeed. I keep track of banks and there is still a lot of capital going down the tubes. Nice homes by the way!
Wow, that does surprise me. But I think it is a big sign of the times!
It seems to me that the savings and loans are getting a lot of the business. Most of them stood a little more conservative in the loan wars. They were looking for more equity type buyers.
Unfortunately, they probably won't be able to handle it when things finally pick up.
Richard
I went through the same thing last year when First Magnus shut down Have him give me a call, we are hiring experienced loan officers in NJ. gregory.d.knox@flagstar.com
Do not worry. The strong loan officers will have opportunities with other companies that are hiring. The weak loan officers will need to find new careers. It appears that Bank of America and Countrywide plan to drop the bottom 25% of producers.
Roy Kelley
There seems to be a general contraction in the lending industry so it shouldn't be a surprise as companies go out of business.
It is demand and supply. Many lenders are challenged with loss mitigation, risk management, compliance, high costs. Every branch has to answer to the bottom line in profits and losses. Many exceed budget allowances while experiencing loses. Each local branch that struggles effects the whole organization.
With demand at a low, due to many other factors than subprime loans. The gp is insecure and at a high personal debt ratio. The allowable debt ratios has decreased so much, that even with people who have great credit, they are getting denied for having little savings/reserves and high debt. This is a huge cost to lenders. If they aren't funding loans than they are not making profits.
The issue is more with all citizens and their ability to manage debt and savings, than it is a gov bailout or change in lenders. Who knows what the outcome will be.
Greg , I will pass on your info.
To everyone, we are in credit contraction and tightening. The speads have widened and have stayed wide. When the selling prices stop declining and firm the spreads will narrow with the renewed confidence. And then, I can't say how or what or why but it will all start over again. Just a little different than the last time.
Richard