Good Morning:
Chas mentioned late Friday “it was a good week.” My reply was a bit snarly at-the-time, but it was a good week.
My focus, or at least what I’m thinking about at this point….
warehouse capabilities (funding loans that need to be funded)
pipeline; reviewing what is our “real” pipeline
prudent underwriting and funding
GMAC <580 Manual loans; while we have the criteria in place, what are they really going to purchase? Are they going to get tougher
exceptions; clearing the existing and stopping the future
we have the ability to be very profitable this month if we can turn the line 1.5 times
AUS files; scenario strategies that will get winning results (May15th type thoughts and planning)
what loan officers and processors are out there just looking out for themselves?
getting our wholesale sales people back selling; we’ve had them in problem control and preventive maintenance for the past 60 days. Question is..what to sell and how to sell it right?
people; lot’s of feelings and emotions on the sleeve – here in the office and the field
paying attention to what we do well; I ask everyone to be sure that problems don’t bleed over into the areas that should not be effected.
Looking for blind spots,
Danny
Monday, March 31, 2008
Friday, March 28, 2008
One of the signs of a company’s ability to become great is its Unity.
That Unity has excelled in managing our warehouse lines. In particular, the problem entitled “GMAC.” We began the month with 23 million on that line and we are down to less than 3 million. This has been an amazing feat and I thank God for Matilda, Mary, Bryon, and a host of others (you know who you are) for clearing that line down. It has been an Alethes TEAM effort and you are appreciated.
Woody, Cynthia, John, Roy and the rest of the accounting team…I thank God for how you have stayed in the fight with GMAC and managed the finance side of this thing. You’ve been tasked with putting together the pieces you’ve been handed and you’ve done an amazing job.
In a conference call last month, we heard Mr. Covey say “you don’t get into trouble, you behave your way there. And you don’t talk your way out, but you instead behave your way out.”
Thanks for the Unity; Morris and Swindol would be proud.
Thanks for those not mentioned above for putting up with the rest of us during this time. Thanks for the day-to-day work you do.
Danny
That Unity has excelled in managing our warehouse lines. In particular, the problem entitled “GMAC.” We began the month with 23 million on that line and we are down to less than 3 million. This has been an amazing feat and I thank God for Matilda, Mary, Bryon, and a host of others (you know who you are) for clearing that line down. It has been an Alethes TEAM effort and you are appreciated.
Woody, Cynthia, John, Roy and the rest of the accounting team…I thank God for how you have stayed in the fight with GMAC and managed the finance side of this thing. You’ve been tasked with putting together the pieces you’ve been handed and you’ve done an amazing job.
In a conference call last month, we heard Mr. Covey say “you don’t get into trouble, you behave your way there. And you don’t talk your way out, but you instead behave your way out.”
Thanks for the Unity; Morris and Swindol would be proud.
Thanks for those not mentioned above for putting up with the rest of us during this time. Thanks for the day-to-day work you do.
Danny
Thursday, March 27, 2008
Good Morning
I’ll get right to the guts of the matter:
we need loans bought off the warehouse line
at present we are 5 million short of what is needed to fund out our projected closings for this month
we need 5 million more loans bought off the line today through Monday morning at 10am.
If you are not doing something that is critical, please contact Bryon to help with exceptions
Everyone…pray
I will be using some new terms in the next few days. They, and their definitions, are -
May 15th: I’m thinking about what we are going to look like without all the low end manual underwrites
Retooling: exactly at it implies, but towards People and Systems
If you were in a meeting and/or discussion with me yesterday, think about what we discussed and move forward with those directions.
If you are not sure, call or come see me.
Understand, or at least accept, that we do not have time to think through a lot of details right now.
We must be changing BUT with a high level of ROBUST EVALUATION AND CORRECTION. Let me clarify….ROBUST EVALUATION AND CORRECTION.
This is not a game though it could be thought of as high-stakes poker or a chess masters final. What is at risk here are people moving into houses, people’s homes; people’s income; people’s jobs. What is at risk are people.
Please take this all very serious. We’ve been in training for a long time for this day and it is performance time; period-the-end-performance. No games, no playing. Please see that you and your co-workers are engaged in what is important. If you are not sure, ask questions – do not not ask questions.
One final note; a couple of you have asked me about being more specific about what to pray for. I’ll just say…
”All of this, but specifically the people. Pray for each other. Pray for me. Pray that we would all get our direction, guidance, wisdom, revelations, and discernment from the One and Only God; the Father, Son, and Holy Spirit. And not just for the tough stuff; not just for the trials we are going through. But for the triumphs also.
Give thanks for still being in business. Give thanks for life. I see some people’s struggles and problems and just give thanks because except for the mercy of God, there go I. God doesn’t make junk – you and I are made in God’s image. We are called. This is a fallen world and we have a mandate to work His creation. With my personal relationship with Jesus Christ comes a more specific call, a mandate: to disciple, baptize, and teach others to observe all that HE commanded.”
This is not about being easy. This is not about everything being all stress-free and mushy. This is about life.
For me, this is about doing it Right; this is about somehow glorifying God through our business principles, our people, and our community (Alethes). It is not about my salvation though – that is done. So, if I don’t seem as stressed as you think I should be. That’s why.
So, having said all that….please know that each of you are doing a great job. These are trying times and it is easy for me to hammer the negatives and get into my persister mode. Those of you that slow me down, those that ask questions, those that cause me to pay attention to my blind spots…thank you. There are a lot of triumphs in the midst of this. We have made great strides in increasing our performance.
Thanks, (and so much for just the guts!)
Danny
I’ll get right to the guts of the matter:
we need loans bought off the warehouse line
at present we are 5 million short of what is needed to fund out our projected closings for this month
we need 5 million more loans bought off the line today through Monday morning at 10am.
If you are not doing something that is critical, please contact Bryon to help with exceptions
Everyone…pray
I will be using some new terms in the next few days. They, and their definitions, are -
May 15th: I’m thinking about what we are going to look like without all the low end manual underwrites
Retooling: exactly at it implies, but towards People and Systems
If you were in a meeting and/or discussion with me yesterday, think about what we discussed and move forward with those directions.
If you are not sure, call or come see me.
Understand, or at least accept, that we do not have time to think through a lot of details right now.
We must be changing BUT with a high level of ROBUST EVALUATION AND CORRECTION. Let me clarify….ROBUST EVALUATION AND CORRECTION.
This is not a game though it could be thought of as high-stakes poker or a chess masters final. What is at risk here are people moving into houses, people’s homes; people’s income; people’s jobs. What is at risk are people.
Please take this all very serious. We’ve been in training for a long time for this day and it is performance time; period-the-end-performance. No games, no playing. Please see that you and your co-workers are engaged in what is important. If you are not sure, ask questions – do not not ask questions.
One final note; a couple of you have asked me about being more specific about what to pray for. I’ll just say…
”All of this, but specifically the people. Pray for each other. Pray for me. Pray that we would all get our direction, guidance, wisdom, revelations, and discernment from the One and Only God; the Father, Son, and Holy Spirit. And not just for the tough stuff; not just for the trials we are going through. But for the triumphs also.
Give thanks for still being in business. Give thanks for life. I see some people’s struggles and problems and just give thanks because except for the mercy of God, there go I. God doesn’t make junk – you and I are made in God’s image. We are called. This is a fallen world and we have a mandate to work His creation. With my personal relationship with Jesus Christ comes a more specific call, a mandate: to disciple, baptize, and teach others to observe all that HE commanded.”
This is not about being easy. This is not about everything being all stress-free and mushy. This is about life.
For me, this is about doing it Right; this is about somehow glorifying God through our business principles, our people, and our community (Alethes). It is not about my salvation though – that is done. So, if I don’t seem as stressed as you think I should be. That’s why.
So, having said all that….please know that each of you are doing a great job. These are trying times and it is easy for me to hammer the negatives and get into my persister mode. Those of you that slow me down, those that ask questions, those that cause me to pay attention to my blind spots…thank you. There are a lot of triumphs in the midst of this. We have made great strides in increasing our performance.
Thanks, (and so much for just the guts!)
Danny
Wednesday, March 26, 2008
It has really hit this morning that we only have 4 days left of our fiscal year and how different this March has been from the previous two Marches'. Though, I pray we get as good results from year-end audits!
Summarized below are the results of some meetings I had yesterday:
1. Tuesday Morning meeting with Prod/Ops supervisors and exceptions; Compliance and Corporate Branch also attended. Due to a conflict, the meeting was cut short, and I failed to take notes. As I remember, we discussed the new processes surrounding the elimination of <580 manual FHAs and upcoming processes with AUS. We will pick this meeting back up
2. Bryon: we discussed...
possibility of all 550 and below FHA Manuals being underwritten by one underwriter with a review by Bryon
tougher underwriting standards to further eliminate the possibility of problem loans
elimination of level 2 and 3 suspense files; these files will be declined and given to Sales
AUS procedures...I am waiting on responses from a few people on this subject
new underwriting and closing procedures
AUS files are going to put us in a new state of operations
manual underwrites over 580; assigning one underwriter to these files
begin a "May 15th" mentality NOW
how ProLender enhances some of the new processes we discussed
3. Bryon/David/Brandi: Front-End Compliance. Changes coming about in this area will be announced.
4. Discussions with Jason:
GMAC's credit score hits are regardless of AUS approval
We are taking the Higher FHA Loan Limits on a case by case but we still have only one investor to purchase these loans
We are getting quite a few loans being registered. One thing that was not considered when we required the <580s to be registered by this Thursday was the Lender B loans that are also registered. This will make it more difficult to know our <580 pipeline on Friday.
5. Chas/Paul:
setting Pull-Through benchmarks for AEs on the AUS files
what this is all going to look like on May 15th and to start selling like that today
what does an AE look like on May 15th
AEs training on AUS
6. Woody: short meeting to discuss GMAC's viability, budget items, and future volume levels.
So, that is a bit of reflection on yesterday. My focus remains on "where are we going and what will we look like?" I'm looking for the truth in this mire; what are the scenarios we have available to us? What paths bring the best results? What defines "best results?"
One comment: watch the gossiping and complaining. What you are discussing with each other....does it have substance or are you just whining? Is it something you have control over?....if not, you are whining and gossiping and thus tearing yourself down.
Praying,
Danny
Summarized below are the results of some meetings I had yesterday:
1. Tuesday Morning meeting with Prod/Ops supervisors and exceptions; Compliance and Corporate Branch also attended. Due to a conflict, the meeting was cut short, and I failed to take notes. As I remember, we discussed the new processes surrounding the elimination of <580 manual FHAs and upcoming processes with AUS. We will pick this meeting back up
2. Bryon: we discussed...
possibility of all 550 and below FHA Manuals being underwritten by one underwriter with a review by Bryon
tougher underwriting standards to further eliminate the possibility of problem loans
elimination of level 2 and 3 suspense files; these files will be declined and given to Sales
AUS procedures...I am waiting on responses from a few people on this subject
new underwriting and closing procedures
AUS files are going to put us in a new state of operations
manual underwrites over 580; assigning one underwriter to these files
begin a "May 15th" mentality NOW
how ProLender enhances some of the new processes we discussed
3. Bryon/David/Brandi: Front-End Compliance. Changes coming about in this area will be announced.
4. Discussions with Jason:
GMAC's credit score hits are regardless of AUS approval
We are taking the Higher FHA Loan Limits on a case by case but we still have only one investor to purchase these loans
We are getting quite a few loans being registered. One thing that was not considered when we required the <580s to be registered by this Thursday was the Lender B loans that are also registered. This will make it more difficult to know our <580 pipeline on Friday.
5. Chas/Paul:
setting Pull-Through benchmarks for AEs on the AUS files
what this is all going to look like on May 15th and to start selling like that today
what does an AE look like on May 15th
AEs training on AUS
6. Woody: short meeting to discuss GMAC's viability, budget items, and future volume levels.
So, that is a bit of reflection on yesterday. My focus remains on "where are we going and what will we look like?" I'm looking for the truth in this mire; what are the scenarios we have available to us? What paths bring the best results? What defines "best results?"
One comment: watch the gossiping and complaining. What you are discussing with each other....does it have substance or are you just whining? Is it something you have control over?....if not, you are whining and gossiping and thus tearing yourself down.
Praying,
Danny
Tuesday, March 25, 2008
Good Morning. I've been asked if it is ok to pass this on to others and the answer is yes (Paul has it plastered to his office door). Yes, it is ok to pass this on to others.
I had a few "gulps" yesterday. A couple of them were due to someone waiting on me to respond. If you have something on hold, and you believe you are waiting on me to reply, or "focus" on it - please don't. Please set time to meet with me...and be prepared for the meeting - or if you need to meet to discuss, that's good and ok. But please, do not be waiting for me to respond.
My focus, (and God could very well has a different path for me and I'm trying to pay atttention!)...as I was saying, my focus right now is primarily on...
1. bringing to a close the <580 Manual Underwrite FHA Loans
2. re-tooling our business with a focus on AUS approved loans and
3. doing both well.
Doing this well:
1. bringing to a close the <589 Manual Underwrite FHA Loans: I'm asking for wisdom and discernment in this area. There is concern, and rightly placed, of GMAC Correspondent's volitality and that by a stroke of an executive's pen they decide to stop purchasing these low credit score loans. Thus, leaving us and others with these loans on our warehouse lines. If that was to happen, we would in essence be shut down.
Yet, that would have some severe consequences to GMAC; because they've put out their announcement, and they are giving us time to close out our existing pipelines. GMAC could have followed Chase's lead and cut these loans off with barely a 24 hour notice. Because they choose this path, and because GMAC Bank is continuing to take these loans through April, by intent is to follow their lead.
You all should have received our announcement last night about these <580 loans; It has some key dates and "have-to's" in it. We'll update that as new information comes forward.
The Underwriting on these loans will continue to tighten up. At present, we are...
Denying incompletely processed loans (we will not have time to work these loans through processing)
Documenting income very very well
Writing out how income was used for qualifying
We are document files very well
all conditions met prior to drawing docs
Verbal VOEs are very thorough
we are preparing a new process for this task
4506's are being pull on all of these loans to verify income
We are running AUS on all FHA Manual Underwritten Loans <580 scores to see if we can get approval (this is also for training purposes)
2. re-tooling our business with a focus on AUS approved loans: I will be asking a lot of questions along these lines.
There are a few on this staff that have a lot of experience in this area. Now that the playing field is leveled out, we have the opportunity to achieve some really good results.
Note that this manual underwrite agenda had taken place 6 months ago, it would have been very devasting.
Because we've been able to focus more on the AUS approved files, we have around 20% more of the AUS Approved files than before.
Doing this well will take a lot of talking; a lot of asking questions; a lot of discernment; a lot of proper guidance; a lot of paying attention; a lot of listening; a lot of prayer.
A lot of prayer.
Danny
I had a few "gulps" yesterday. A couple of them were due to someone waiting on me to respond. If you have something on hold, and you believe you are waiting on me to reply, or "focus" on it - please don't. Please set time to meet with me...and be prepared for the meeting - or if you need to meet to discuss, that's good and ok. But please, do not be waiting for me to respond.
My focus, (and God could very well has a different path for me and I'm trying to pay atttention!)...as I was saying, my focus right now is primarily on...
1. bringing to a close the <580 Manual Underwrite FHA Loans
2. re-tooling our business with a focus on AUS approved loans and
3. doing both well.
Doing this well:
1. bringing to a close the <589 Manual Underwrite FHA Loans: I'm asking for wisdom and discernment in this area. There is concern, and rightly placed, of GMAC Correspondent's volitality and that by a stroke of an executive's pen they decide to stop purchasing these low credit score loans. Thus, leaving us and others with these loans on our warehouse lines. If that was to happen, we would in essence be shut down.
Yet, that would have some severe consequences to GMAC; because they've put out their announcement, and they are giving us time to close out our existing pipelines. GMAC could have followed Chase's lead and cut these loans off with barely a 24 hour notice. Because they choose this path, and because GMAC Bank is continuing to take these loans through April, by intent is to follow their lead.
You all should have received our announcement last night about these <580 loans; It has some key dates and "have-to's" in it. We'll update that as new information comes forward.
The Underwriting on these loans will continue to tighten up. At present, we are...
Denying incompletely processed loans (we will not have time to work these loans through processing)
Documenting income very very well
Writing out how income was used for qualifying
We are document files very well
all conditions met prior to drawing docs
Verbal VOEs are very thorough
we are preparing a new process for this task
4506's are being pull on all of these loans to verify income
We are running AUS on all FHA Manual Underwritten Loans <580 scores to see if we can get approval (this is also for training purposes)
2. re-tooling our business with a focus on AUS approved loans: I will be asking a lot of questions along these lines.
There are a few on this staff that have a lot of experience in this area. Now that the playing field is leveled out, we have the opportunity to achieve some really good results.
Note that this manual underwrite agenda had taken place 6 months ago, it would have been very devasting.
Because we've been able to focus more on the AUS approved files, we have around 20% more of the AUS Approved files than before.
Doing this well will take a lot of talking; a lot of asking questions; a lot of discernment; a lot of proper guidance; a lot of paying attention; a lot of listening; a lot of prayer.
A lot of prayer.
Danny
Monday, March 24, 2008
I'll begin today by asking everyone to reflect on last week and last month, if not the last 6 months. You'll agree that we have had a stressful trip, but one we need to remember so that we learn and maybe not repeat the mistakes; so we can purposefully build on the successes. Reflect and recognize the changes we've made, new pressures we've succeeded in overcoming, and the new level of intensity we are working. We need to recognize this so we can know we have changed and can continue to change.
As you reflect, take some time and read the focus' I sent out; read some of your previous emails; look at the path we've been down; review some of the things we/you were concerned about and what came to pass and what did not.
It has been difficult to maintain profitability during these changing times and sustainability is a real focus right now. I am thankful for how God continues to bring us through the battles and I want you all to know you are to be commended for fighting what has become a weary fight. At the bottom of this email you'll find an email from Woody where he passes on some of the congradulatories from GMAC. Thank you for staying in the game. Chasing these exceptions, running numbers, completing spreadsheets, analyzing cash flows.....it all gets old, and as Woody said to me; very weary. Thank you for staying engaged.
With the upcoming loss of the <580 manuals we'll be exploring new ground. I believe Alethes can come through this with incredible results because we've got some great people who have the willingness to redefine themselves in this redefining industry.
So, my focus today is primarily on asking questions along the lines "changing strategies" due to the loss of the <580 manaul underwrites...
Communicating the changes?
we will put out an official statement about our lock and underwriting guidelines in the early afternoon
Defining the boundaries of <580
what Lock periods are exceptable through 4/3?
what to do with existing pipelines?
suspended files, how to work conditions to get to approval
pipelines; what is our true pipeline?
What is the message we send out today about <580
What strategy scenarios do consider for moving forward?
DU vs DO
LP
eMagic?
Help desk for processing in field
What are our competitors doing?
How does this change our LO Hiring model?
How does this change our thoughts about Processors?
Employee vs Contract?
More emphasis on Corporate?
More Corporate hired processors in field?
Compliance: what changes should this cause us to consider
Communication?
Are there other investors we've not paid attention to in the past because of the manual underwrites and we should now?
People Processes
do we have the right people?
are they in the right spots?
is there immediate training that is needed?
is everyone engaging?
robust evaluation and correction
Please know that this is the time for "all-hands-on-deck." This is a time for serious engaging by all. We will undoubtedly be moving people to get the best results; some of this will be temporary, some permanent, but change will be a part of our agenda. Please be communicating with your staff.
To that end,
Danny
As you reflect, take some time and read the focus' I sent out; read some of your previous emails; look at the path we've been down; review some of the things we/you were concerned about and what came to pass and what did not.
It has been difficult to maintain profitability during these changing times and sustainability is a real focus right now. I am thankful for how God continues to bring us through the battles and I want you all to know you are to be commended for fighting what has become a weary fight. At the bottom of this email you'll find an email from Woody where he passes on some of the congradulatories from GMAC. Thank you for staying in the game. Chasing these exceptions, running numbers, completing spreadsheets, analyzing cash flows.....it all gets old, and as Woody said to me; very weary. Thank you for staying engaged.
With the upcoming loss of the <580 manuals we'll be exploring new ground. I believe Alethes can come through this with incredible results because we've got some great people who have the willingness to redefine themselves in this redefining industry.
So, my focus today is primarily on asking questions along the lines "changing strategies" due to the loss of the <580 manaul underwrites...
Communicating the changes?
we will put out an official statement about our lock and underwriting guidelines in the early afternoon
Defining the boundaries of <580
what Lock periods are exceptable through 4/3?
what to do with existing pipelines?
suspended files, how to work conditions to get to approval
pipelines; what is our true pipeline?
What is the message we send out today about <580
What strategy scenarios do consider for moving forward?
DU vs DO
LP
eMagic?
Help desk for processing in field
What are our competitors doing?
How does this change our LO Hiring model?
How does this change our thoughts about Processors?
Employee vs Contract?
More emphasis on Corporate?
More Corporate hired processors in field?
Compliance: what changes should this cause us to consider
Communication?
Are there other investors we've not paid attention to in the past because of the manual underwrites and we should now?
People Processes
do we have the right people?
are they in the right spots?
is there immediate training that is needed?
is everyone engaging?
robust evaluation and correction
Please know that this is the time for "all-hands-on-deck." This is a time for serious engaging by all. We will undoubtedly be moving people to get the best results; some of this will be temporary, some permanent, but change will be a part of our agenda. Please be communicating with your staff.
To that end,
Danny
Friday, March 21, 2008
Well, I'm trying not to focus on much today. Reflect? Pray? Most definietely.
I've been asked if it is ok to pass these email on to others; yes.
To wrap up yesterday:
GMAC announced they would no longer accept locks on Manual Underwrites after 4/3/2008. We will get the specifics out on Monday. Please tell anyone that asks to wait until we put out an "official" announcement.
We expect that we will take locks through 4/3 and close the loans out through April
We will probably not lock a Manual/<580 unless it is approved
We will be very carefull about giving approvals on incomplete files
We will probably suspend a lot of files
The scenarios we laid out yesterday in the 1006 meeting and. yesterday's Focus, about Approved vs. Suspended vs Denied are suspended at this time
NOTE: please do not sepculate with each other or with clients on this matter. PLEASE wait for an announcement from me before talking particulars
The Future
I have spoke to some of you and we have some scenarios I will write up over the weekend. Please email me with any ideas and/or questions.
We are considering how we launch the temporary High Loan limits for FHA
We are reviewing our overall AUS strategy: adding people in-house to run DU and LP. We are also looking at the DU vs DO vs eMagic options
We are considering a Hi Level Help Desk; what does that mean? how would it work? who would man it? would it include processing? would it help people to know how to put together a file? will it help us be better?
Better Loan Officers and Processors: after a meeting yesterday, I realized there was concern about what direction I was going by holding some Loan Officer's feet to the fire on their processing and submissions; to the point they have resigned or been terminated. Was I trying to clean up the industry?
No...I am not. I do intend to clean up the loans we are funding: from origination through funding.
We have not been profitable, and barely sustainable witht he type of loans we have been getting
The new FHA guidelines imposed by the investors does not make that any easier
BUT....I am also very concerned about those loans being funded through Lender B/brokered out. When we run someone off because they "don't get it," I don't want them staying onboard with Alethes and submitting the trash somewhere else.
So, having said all that.....please try to put this all behind you for the weekend and relax.
This is a special time that Christians celebrate the death and resurrection of their Lord Jesus Christ. That is what I'll be doing and pray you would all know Him and do the same.
Danny
I've been asked if it is ok to pass these email on to others; yes.
To wrap up yesterday:
GMAC announced they would no longer accept locks on Manual Underwrites after 4/3/2008. We will get the specifics out on Monday. Please tell anyone that asks to wait until we put out an "official" announcement.
We expect that we will take locks through 4/3 and close the loans out through April
We will probably not lock a Manual/<580 unless it is approved
We will be very carefull about giving approvals on incomplete files
We will probably suspend a lot of files
The scenarios we laid out yesterday in the 1006 meeting and. yesterday's Focus, about Approved vs. Suspended vs Denied are suspended at this time
NOTE: please do not sepculate with each other or with clients on this matter. PLEASE wait for an announcement from me before talking particulars
The Future
I have spoke to some of you and we have some scenarios I will write up over the weekend. Please email me with any ideas and/or questions.
We are considering how we launch the temporary High Loan limits for FHA
We are reviewing our overall AUS strategy: adding people in-house to run DU and LP. We are also looking at the DU vs DO vs eMagic options
We are considering a Hi Level Help Desk; what does that mean? how would it work? who would man it? would it include processing? would it help people to know how to put together a file? will it help us be better?
Better Loan Officers and Processors: after a meeting yesterday, I realized there was concern about what direction I was going by holding some Loan Officer's feet to the fire on their processing and submissions; to the point they have resigned or been terminated. Was I trying to clean up the industry?
No...I am not. I do intend to clean up the loans we are funding: from origination through funding.
We have not been profitable, and barely sustainable witht he type of loans we have been getting
The new FHA guidelines imposed by the investors does not make that any easier
BUT....I am also very concerned about those loans being funded through Lender B/brokered out. When we run someone off because they "don't get it," I don't want them staying onboard with Alethes and submitting the trash somewhere else.
So, having said all that.....please try to put this all behind you for the weekend and relax.
This is a special time that Christians celebrate the death and resurrection of their Lord Jesus Christ. That is what I'll be doing and pray you would all know Him and do the same.
Danny
Thursday, March 20, 2008
I will be in the office today around 9:30, but in a meeting from 10-Noon.
Yesterday had a couple of new problems arise; or, I should say, new twists to old problems.
1. Chase stopped accepting credit scores below 580 for manual underwrites. This narrows the playing field down to just 2 known level 1 lenders that now accept that product; GMAC and Wells. As you know we only deliver to GMAC.
Jason first heard about this new change from Dawn Pieper at GMAC. She does not believe GMAC will change their policy of accepting these files but is concerned about being "adverse selected." Meaning: GMAC only gets the low credit score loans.
The problem?: this could cause an influx of these loans to Alethes (Jason got phone calls from new loan officers yesterday asking about minimum scores)-
too many low credit scores vs high scores (we battle that daily)
neighborhood watch ratios 6 months to 2 years from now
many of these loans are poorly processed
the originators are B/C type individuals masquerading as loan officers
our loan flow processes get bogged down with bad files / phone calls / hysteria....please do not think this an exaggeration
the good loans we get everyday get messed up with the badly processed loans
I'll come back to the possible solution below
2. the other problem; continued People problems and though we had a new incident yesterday, this is not isolated. This is a continued problem that is a result of months, even years, of not dealing with the real issues. We are not trained properly, and we want the problem to just go away. While we have to patient with these problems (we are working with each other - people), we have to be deligent.
This is are biggest long-term problem and we will continue to address this on a daily basis. Sharon and I check-in every morning and work through not only an on-going problem, but revisit past problems so we can learn from them. As Bryon has said..."this ain't rocket-science, it's tougher."
Focus today:
1. New Credit Score Floor; these are the possibilities of what came out of conversations between Jason, Bryon, Chas, and I yesterday
loans Below 580 will be either denied or approved - no suspenses
badly processed files will be killed even before getting to an underwriter
this will help us get cleaner files, not today and tomorrow, but next month
we will not take loans Below 580 without loans Above 580 and AUS files
1 to 1 ratio
this will stop the adverse selection
this would not be easy, today, to monitor and will be on the back of Paul to run reports and keep track of with Jason keeping it in check
I'm working under the assumption that the reporting features in ProLender will help us
we do not accept manual underwrites from TPO (maybe just new TPOs) below 580
the lower scores can have more back side problems and we have more problems from TPO follow up documents
Note: we have to be aware of not getting into "tiered-pricing" violations
2. Continued focus on warehouse line amounts ; pray for Don's call to Horizon Bank today. We are still waiting on their decision for another 1- to 20 million line
3. Loan Officers: old and repeated problems came up yesterday with "seasoned" loan officers. Many continue to NOT be engaged in the pure fact that this market has, and continues to, change. We are probably going to terminate a few more of these loan officers that have been with us for years; and processors.
We continue to get bogged down in the mire of their badly processed files.
I will be walking around today and reviewing files in racks today; processing, submissions, underwriting, and closing. I will be pulling some of these files to review with John Glenn and Paul Findley. We want well processed files. If a file is badly processed, it could have fraud in it; it is costing us too much money to work through our system - corporately, we are not making money on these files.
My answer to this problem has been..."show them what they are doing wrong and they'll correct it." That is not working. Many of these loan officers do not believe they have a problem.
I believe the only answer is...let them go somewhere else and after two or three moves they'll get beat down and finally change. During this time, we'll hire new loan officers and require a high level of performance from them and they'll conform. This will possibly work, in part, because many of these loan officers will have left a previous employer for the same reasons ours are leaving. They will evenually conform to the industry because they get tired of fighting.
This is a shame, but we will require higher levels of performance from the field.
3. Exceptions :
Glover was purchased and Garland is being reviewed by GMAC today.
Bell: Sunne is working this file. Bryon has reviewed and given her some suggestions.
4. File Submission to Funding Process : new processes that went into effect yesterday are being monitored. I'll be working with Bryon and team to see how this is performing
5 . Thinking about the direction we take for moving forward
types of business: new business models?
warehouse lines
processing
sales
Loan Officers
Processors
7. ProLender : I assume the training went well...even heard that it was "cool." There is a lot of work to be done to get this ready by month's end. Scott and John have WebEx training set-up for the off-site personnel. Please insure you are encouraging them.
Is everyone paying attention?
Is everyone REALLY preparing to learn this software?
What are we missing?
Off-Site personnel?
Reminder: DataTrac is gone in 12 days.
8. Performance : this is a key. Please insure we are getting 360 pereformance.
9. DU and DO: we are looking at better ways to get this done in the field. Please be considering
10. Underwriting- what has changed recently...
From: Bryon Cunningham Sent: Wednesday, March 19, 2008 9:26 AMTo: Danny SmithSubject: RE: Underwriting
Cradle to grave, 1 uw handle file from uw to closing.
Increase loan declinations
Suspended loan procedure (3 levels) Level 1 resubmit back to UW, Level 2 resubmit file back for full UW, Level 3 refer file to Paul Findley.
Carrie as liaison between operations and sales
Team to communicate UW questions via e-mail
WYCY given to sales, under 550 credit score not accepted.
Exceptions worked by UWs.
Eliminated Jr. UW position.
All loans below 550 credit score require second review by Bryon Cunningham.
New condition distribution procedure.
All declined loans input into FHA connection.
Promoted Kelly/Denise to underwriters.
Ok...this enough for one day.
Keep up the good work......
Thanks,
Danny
Yesterday had a couple of new problems arise; or, I should say, new twists to old problems.
1. Chase stopped accepting credit scores below 580 for manual underwrites. This narrows the playing field down to just 2 known level 1 lenders that now accept that product; GMAC and Wells. As you know we only deliver to GMAC.
Jason first heard about this new change from Dawn Pieper at GMAC. She does not believe GMAC will change their policy of accepting these files but is concerned about being "adverse selected." Meaning: GMAC only gets the low credit score loans.
The problem?: this could cause an influx of these loans to Alethes (Jason got phone calls from new loan officers yesterday asking about minimum scores)-
too many low credit scores vs high scores (we battle that daily)
neighborhood watch ratios 6 months to 2 years from now
many of these loans are poorly processed
the originators are B/C type individuals masquerading as loan officers
our loan flow processes get bogged down with bad files / phone calls / hysteria....please do not think this an exaggeration
the good loans we get everyday get messed up with the badly processed loans
I'll come back to the possible solution below
2. the other problem; continued People problems and though we had a new incident yesterday, this is not isolated. This is a continued problem that is a result of months, even years, of not dealing with the real issues. We are not trained properly, and we want the problem to just go away. While we have to patient with these problems (we are working with each other - people), we have to be deligent.
This is are biggest long-term problem and we will continue to address this on a daily basis. Sharon and I check-in every morning and work through not only an on-going problem, but revisit past problems so we can learn from them. As Bryon has said..."this ain't rocket-science, it's tougher."
Focus today:
1. New Credit Score Floor; these are the possibilities of what came out of conversations between Jason, Bryon, Chas, and I yesterday
loans Below 580 will be either denied or approved - no suspenses
badly processed files will be killed even before getting to an underwriter
this will help us get cleaner files, not today and tomorrow, but next month
we will not take loans Below 580 without loans Above 580 and AUS files
1 to 1 ratio
this will stop the adverse selection
this would not be easy, today, to monitor and will be on the back of Paul to run reports and keep track of with Jason keeping it in check
I'm working under the assumption that the reporting features in ProLender will help us
we do not accept manual underwrites from TPO (maybe just new TPOs) below 580
the lower scores can have more back side problems and we have more problems from TPO follow up documents
Note: we have to be aware of not getting into "tiered-pricing" violations
2. Continued focus on warehouse line amounts ; pray for Don's call to Horizon Bank today. We are still waiting on their decision for another 1- to 20 million line
3. Loan Officers: old and repeated problems came up yesterday with "seasoned" loan officers. Many continue to NOT be engaged in the pure fact that this market has, and continues to, change. We are probably going to terminate a few more of these loan officers that have been with us for years; and processors.
We continue to get bogged down in the mire of their badly processed files.
I will be walking around today and reviewing files in racks today; processing, submissions, underwriting, and closing. I will be pulling some of these files to review with John Glenn and Paul Findley. We want well processed files. If a file is badly processed, it could have fraud in it; it is costing us too much money to work through our system - corporately, we are not making money on these files.
My answer to this problem has been..."show them what they are doing wrong and they'll correct it." That is not working. Many of these loan officers do not believe they have a problem.
I believe the only answer is...let them go somewhere else and after two or three moves they'll get beat down and finally change. During this time, we'll hire new loan officers and require a high level of performance from them and they'll conform. This will possibly work, in part, because many of these loan officers will have left a previous employer for the same reasons ours are leaving. They will evenually conform to the industry because they get tired of fighting.
This is a shame, but we will require higher levels of performance from the field.
3. Exceptions :
Glover was purchased and Garland is being reviewed by GMAC today.
Bell: Sunne is working this file. Bryon has reviewed and given her some suggestions.
4. File Submission to Funding Process : new processes that went into effect yesterday are being monitored. I'll be working with Bryon and team to see how this is performing
5 . Thinking about the direction we take for moving forward
types of business: new business models?
warehouse lines
processing
sales
Loan Officers
Processors
7. ProLender : I assume the training went well...even heard that it was "cool." There is a lot of work to be done to get this ready by month's end. Scott and John have WebEx training set-up for the off-site personnel. Please insure you are encouraging them.
Is everyone paying attention?
Is everyone REALLY preparing to learn this software?
What are we missing?
Off-Site personnel?
Reminder: DataTrac is gone in 12 days.
8. Performance : this is a key. Please insure we are getting 360 pereformance.
9. DU and DO: we are looking at better ways to get this done in the field. Please be considering
10. Underwriting- what has changed recently...
From: Bryon Cunningham Sent: Wednesday, March 19, 2008 9:26 AMTo: Danny SmithSubject: RE: Underwriting
Cradle to grave, 1 uw handle file from uw to closing.
Increase loan declinations
Suspended loan procedure (3 levels) Level 1 resubmit back to UW, Level 2 resubmit file back for full UW, Level 3 refer file to Paul Findley.
Carrie as liaison between operations and sales
Team to communicate UW questions via e-mail
WYCY given to sales, under 550 credit score not accepted.
Exceptions worked by UWs.
Eliminated Jr. UW position.
All loans below 550 credit score require second review by Bryon Cunningham.
New condition distribution procedure.
All declined loans input into FHA connection.
Promoted Kelly/Denise to underwriters.
Ok...this enough for one day.
Keep up the good work......
Thanks,
Danny
Wednesday, March 19, 2008
March 19, 2008
I am out of the office most, if not all day and will stay continue to stay engage in the areas mentioned yesterday.
1. warehouse line amounts : you should be on Roy's daily notice. Please insure you are. In comes out every morning around 9:30. Jessica and I met briefly to discuss some aspects of warehouse usage. This is now critical that we "balance" the Tx Banks accurately. In addition, Roy reminded me that we now have a 10 percent haircut on GMAC loans that go to NattyMac. We will need to remember to NOT use NattyMac for GMAC loans. And this brings up another conversation we will need to have in relationship with NattyMac and how to use it in general.
2. Loan Officers:
Resignations and Terminations due to file quality: we are continuing to put pressure in the area of performance. Termination vs. Hiring Levels: I sent a seperate email out last night to some of you along these lines; if you did not get and would like it, please ask Paul.
Increasing Loan Quality - how do we bring LOs' abilitity to submit a good file up . See the attached email for details of direction.
This continues to be a battle and I believe it is severly tied to our ability to work with people.
Mark is in training Wednesday and Thursday at Profiles; knowing how to work with Loan Officers is paramount to the results we will achieve and the The People Process continues to be an area we struggle with improving; Profiles training is a resource we continue to not use very well.
Training: Sunne, Mark, and I are discussing
Chas and Paul are now discussing file submissions quality specifically with all loan officers deemed necessary by underwriting
3. Exceptions : we need to continue to refocus on this problem everyday. I will send a seperate email along this subject, but these six items are my focus with the appropriate people.
clearing the two loans that will cause a cash call on Thursday
Bell loan: get update from Chas on status of refinance
report from Bryon on 30 day or more aged loans
determine specific strategy to clear each aged exceptions
Note: by the 28th of this month, all loans on GMAC's warehouse line will be at 30 days or more. Every loan at that point will require a minimum 10% cash-call.
GOAL: clear GMAC's warehouse line by Friday, 3/28/2008 at 5pm.
4. File Submission to Funding Process : we made some changes on the front end of this area yesterday, In summary,
all conditions will now be reviewed by the underwriter on screen and then only those she/he need will be printed. The premliminary write up of this new procedure is in place and this procedure will start today. This is a dramatic change from where we have been and will save a minimum of 3-4 man hours per day printing conditions.
In addition, we are continuing to ask; What are we missing? Do we have the right people in the right seats
5 . Thinking about the direction we take for moving forward
types of business: new business models?
warehouse lines
processing
sales
Loan Officers
Processors
7. ProLender training starts today
Is everyone paying attention?
Is everyone REALLY preparing to learn this software?
What are we missing?
Off-Site personnel?
Reminder: DataTrac is gone in 12 days.
8. Performance
Pick back up evaluations and corrections
What are we doing right?
What are we doing wrong?
What problems do I have today?
What could I have done 6 months ago to not have today's problems?
What problems am I going to have tomorrow and next month and this time next year?
What can I change today?
What questions to I need to ask?
There is a lot of work going on in other areas. This is just what I'm Purposefully Engaged in. The LTS Online field test is in process with Watersedge and possibly All Homes. This software has been one year in development and implementation; the LTS Team have been testing the system and processes for almost 9 months. Our development company (Eureka) has issued a press release and we will get that out to everyone in the next few days.
People Process
After reflecting on the problems of the past few weeks, even months, 90% of our troubles have been along the lines of People. Not necessarily problem people, but problems with people working together, struggling with each other, engaging in constructive conflict, conflict resolution, knowing what to engage in, what is a priority, how well he/she is doing, how something works, and a host of other areas you are thinking about right now.
It all comes back to the people...to you and I and the people around us.
I believe God put us here for a reason: a calling. Are you engaged in your calling? Are you responding to the Caller correctly? What does that mean?
Look back over this email. Read it a few times. I challenge you to show me anything that can be done without people. How well are you equipped to work with people? How well are you preparing yourself for next month, and next year, to work with people. Please don't think you will be able to just roll with the punches. At Alethes, you have to Purposefully grow.
Thanks eveyone. I realize I don't say Thank You often enough...I am trying.
Thank you.
Danny
1. warehouse line amounts : you should be on Roy's daily notice. Please insure you are. In comes out every morning around 9:30. Jessica and I met briefly to discuss some aspects of warehouse usage. This is now critical that we "balance" the Tx Banks accurately. In addition, Roy reminded me that we now have a 10 percent haircut on GMAC loans that go to NattyMac. We will need to remember to NOT use NattyMac for GMAC loans. And this brings up another conversation we will need to have in relationship with NattyMac and how to use it in general.
2. Loan Officers:
Resignations and Terminations due to file quality: we are continuing to put pressure in the area of performance. Termination vs. Hiring Levels: I sent a seperate email out last night to some of you along these lines; if you did not get and would like it, please ask Paul.
Increasing Loan Quality - how do we bring LOs' abilitity to submit a good file up . See the attached email for details of direction.
This continues to be a battle and I believe it is severly tied to our ability to work with people.
Mark is in training Wednesday and Thursday at Profiles; knowing how to work with Loan Officers is paramount to the results we will achieve and the The People Process continues to be an area we struggle with improving; Profiles training is a resource we continue to not use very well.
Training: Sunne, Mark, and I are discussing
Chas and Paul are now discussing file submissions quality specifically with all loan officers deemed necessary by underwriting
3. Exceptions : we need to continue to refocus on this problem everyday. I will send a seperate email along this subject, but these six items are my focus with the appropriate people.
clearing the two loans that will cause a cash call on Thursday
Bell loan: get update from Chas on status of refinance
report from Bryon on 30 day or more aged loans
determine specific strategy to clear each aged exceptions
Note: by the 28th of this month, all loans on GMAC's warehouse line will be at 30 days or more. Every loan at that point will require a minimum 10% cash-call.
GOAL: clear GMAC's warehouse line by Friday, 3/28/2008 at 5pm.
4. File Submission to Funding Process : we made some changes on the front end of this area yesterday, In summary,
all conditions will now be reviewed by the underwriter on screen and then only those she/he need will be printed. The premliminary write up of this new procedure is in place and this procedure will start today. This is a dramatic change from where we have been and will save a minimum of 3-4 man hours per day printing conditions.
In addition, we are continuing to ask; What are we missing? Do we have the right people in the right seats
5 . Thinking about the direction we take for moving forward
types of business: new business models?
warehouse lines
processing
sales
Loan Officers
Processors
7. ProLender training starts today
Is everyone paying attention?
Is everyone REALLY preparing to learn this software?
What are we missing?
Off-Site personnel?
Reminder: DataTrac is gone in 12 days.
8. Performance
Pick back up evaluations and corrections
What are we doing right?
What are we doing wrong?
What problems do I have today?
What could I have done 6 months ago to not have today's problems?
What problems am I going to have tomorrow and next month and this time next year?
What can I change today?
What questions to I need to ask?
There is a lot of work going on in other areas. This is just what I'm Purposefully Engaged in. The LTS Online field test is in process with Watersedge and possibly All Homes. This software has been one year in development and implementation; the LTS Team have been testing the system and processes for almost 9 months. Our development company (Eureka) has issued a press release and we will get that out to everyone in the next few days.
People Process
After reflecting on the problems of the past few weeks, even months, 90% of our troubles have been along the lines of People. Not necessarily problem people, but problems with people working together, struggling with each other, engaging in constructive conflict, conflict resolution, knowing what to engage in, what is a priority, how well he/she is doing, how something works, and a host of other areas you are thinking about right now.
It all comes back to the people...to you and I and the people around us.
I believe God put us here for a reason: a calling. Are you engaged in your calling? Are you responding to the Caller correctly? What does that mean?
Look back over this email. Read it a few times. I challenge you to show me anything that can be done without people. How well are you equipped to work with people? How well are you preparing yourself for next month, and next year, to work with people. Please don't think you will be able to just roll with the punches. At Alethes, you have to Purposefully grow.
Thanks eveyone. I realize I don't say Thank You often enough...I am trying.
Thank you.
Danny
Monday, March 17, 2008
March 17, 2008
My focus today is
1. warehouse line amounts
level available on NattyMac
level available on TxBanks
2. New TxBank lines
how to use
3. Exceptions
clearing the two loans that will cause a cash call on Thursday
Bell loan: get update from Chas on status of refinance
report from Bryon on 30 day or more aged loans
determine specific strategy to clear each aged exceptions
4. Underwriting
changes in intensity; credit scores, approved vs suspended vs denied
5. Suspended files
how we work these files
6. Thinking about the direction we take for moving forward
types of business
warehouse lines
processing
sales
1. warehouse line amounts
level available on NattyMac
level available on TxBanks
2. New TxBank lines
how to use
3. Exceptions
clearing the two loans that will cause a cash call on Thursday
Bell loan: get update from Chas on status of refinance
report from Bryon on 30 day or more aged loans
determine specific strategy to clear each aged exceptions
4. Underwriting
changes in intensity; credit scores, approved vs suspended vs denied
5. Suspended files
how we work these files
6. Thinking about the direction we take for moving forward
types of business
warehouse lines
processing
sales
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