The short answer was ”I am healthily optimistic about where the mortgage business is headed and Alethes’ position in the end result.” I went on to talk about such items as history, industry changes still to come, the media, change and trust; we have to recognize where we've been, but not just from an observation point-of-view. We have to be willing to change and we have to trust ourselves. Our change must be responsive and proactive, not reactive. I’ll resist the opportunity to talk about trust at-this-time, but I know that I have to trust myself and I have to trust those who are originating, processing, underwriting and closing loans for Alethes.
I’m sure you’ve read the various articles published recently, that while loan originations have decreased, loan fraud has increased; and the top indicator is misrepresentation on the loan application.
These reports, coupled with live compliance problems in every lender’s back office has caused lenders/investors to mandate new restrictions, representations and warrants on their brokers.
One of the challenges we're facing is the changes that our lenders are imposing industry-wide through new wholesale agreements. Many of these new agreements do not include provisions for the lenders/investors due diligence; instead, the responsibility is put back on the broker (Alethes) to repurchase the loan even if they, the lender, do not do perform sound underwriting and closing.
At this point, I’d like to re-state Alethes’ three long-term goals:
- To be the premier lender in the markets we serve,
- To have the right to go public if we so desire and
- To be a Top 10 place to work
As part of our desire to achieve the results of the three goals Alethes, LLC, its executive team and myself are committed to the origination and delivery of quality loans, whether banked or brokered.
Over the next few weeks, Alethes will begin instituting various measures to insure our viability in this changing market. Some of these measures will involve new agreements with our investors, new file retention policies and changes to whom and how we broker-out loans.
While there will be changes in many areas, please be assured we are thoroughly reviewing our options and our competition’s handling of the same events. Still, there will undoubtedly be some areas in which each and every one of you will have an issue.
I promise to keep you as readily informed as I possibly can.
Sincerely,
Danny L. SmithPresident & CEOAlethes, LLC
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