Are these the people responsible for the financial mess this country is in?” a worker at Wednesday’s New England Mortgage Banking Conference welcoming reception wondered aloud.
“They seem awfully cheerful.”
Indeed, guests laughed, joked and back-slapped at the champagne reception, which packed the spacious Rosecliff mansion in Newport, R.I.
But the good humor masked a sense of strain several bankers admitted to last week due to the same financial stress which this month alone has seen the subprime mortgage market-related failure of one investment banking giant, the sale of another, and the federal government takeovers of mortgage loan guarantors Fannie Mae and Freddie Mac this month.
And late on Thursday, during the conference, the Federal Deposit Insurance Corp. seized $307 billion Washington Mutual Bank, the second retail banking giant it has taken into conservatorship since July, and reportedly the largest-ever in U.S. history. The FDIC sold most of Seattle-based Washington Mutual’s assets to J.P. Morgan Chase for $1.9 billion the same day.
While NEMBC guests enjoyed the beautiful waterfront views and mild September weather at the Sept. 24-26 conference, many who have attended since the 1980s noted that its location had been switched back to Newport for the first time since 2003, when it moved to Providence to accommodate larger lender crowds that came with booming home sales.
Conference attendance reached nearly 3,000 in 2005, but plummeted to 1,246 this year.
“It was certainly smaller, as we had anticipated, but we felt there was good value in the quality and the intimacy [of industry veterans re-connecting],” said Charles Nilsen, New England regional manager for Chase Home Finance and board chairman-elect of lead event organizer the Massachusetts Mortgage Bankers Association.
MMBA Executive Director Kevin Cuff said, “The quality and professionalism of the people here represent the true mettle of the mortgage industry.”
Champagne Smiles
Lenders at the Rosecliff reception agreed, saying they believe people at this year’s conference are the survivors of the industry battles that have decimated their numbers in the past year.
They and their colleagues have survived for a reason, they said: because they maintained tough lending standards even as Wall Street investment banks wanted to buy loans that were profitable, but easy for unqualified borrowers to obtain and unsustainable.
“The crowd here today is your seasoned lenders,” remarked Mounzer M. Aylouche, who manages lender relationships for Massachusetts affordable housing loan agency Mass-Housing.
“Ninety percent of the brokers are really good, hardworking people,” added Victor Manganiello, president of First Boston Mortgage Corp., a Woburn broker. Manganiello admitted business has “never been harder than it is now,” in his 22 years in mortgage lending.
At the conference, regulators from the six New England states confirmed that the numbers of licensed lender and broker businesses have declined at least 25 percent compared to last year.
Massachusetts Division of Banks Chief Director of Examinations Steven H. Cofsky said the state licensed about 1,200 lender and broker companies this year, compared to about 1,700 in 2007.
Connecticut Department of Banking Deputy Commissioner Alan J. Cicchetti said the state had 18,000 licensed loan originators last year, but just 12,000 since renewals were processed this summer.
Earlier in the day, Amy Tierce, Needham, Mass.-based regional manager for Fairway New England Mortgage, said numbers in the industry are “way down,” but added that “for those of us who know what we’re doing, business is fine.” news banking 16:32:20 16:51:59 09-26-2008 bankerandtradesman 469 By Amy Wyeth
Are these the people responsible for the financial mess this country is in?” a worker at Wednesday’s New England Mortgage Banking Conference welcoming reception wondered aloud.
