To Our Clients, Colleagues and Friends:

· Here’s a conversation we had with a Northeast client recently:

Him: My rep at ABC says I’ve personally guaranteed the loans I sell them.  Is that true?

Us:   You need to look at the Agreement you’ve signed with them.  It’s not typical, but it’s possible.
Him:  I can’t, I don’t have a copy.” 
Here’s a reminder:  You should have all the agreements you have ever signed (and we include things like leases on equipment) well filed and easily accessible, If you can’t find them, call up your reps and get copies.  Spend an hour or two on this sometime next week.  Get organized.  Get those Agreements all in one place.

· Last week was the FDIC’s 75 anniversary.  It was truly one of the most important innovations in banking of the past hundred years.  Happy birthday, FDIC, and whether you like or dislike the New Deal, this one was a great idea.

· Having a hard time getting going with Reverse Mortgages?  We know a recruiter (we’ve known her for 15+ years, and we think very highly of her) who has developed a substantial pool of Reverse Mortgage candidates who have built, run and worked for successful reverse mortgage platforms.  If you’re interested, let us know and we’ll put you in touch with her.  

· Over time, housing prices simply cannot go up faster than the increase in household income.  We got the following from a Lehman report, and it says it all.

· Don’t know why, but funny names of banks amuse us.  How about this one?  First Bank of Snook.  In Snook, Texas , of course.  

· Zions Bank has disclosed that it will shift $1.5 billion par value worth of securities from its available-for-sale portfolio to its held-for-maturity portfolio. Apparently it consists of 85 collateralized debt obligations. We think Zions is a great bank, and we don’t want to sound snide, but isn’t that maneuver just a little too convenient?

· If you need to raise your capital ratios but can’t raise new capital, the easiest way is to shrink the balance sheet.  Lehman Brothers, which has been raising new capital, also took steps to shrink their balance sheet by a whopping $147 billion.

· On this day in 1963 (June 20) Leave it to Beaver went off the air. The Beave was starting to show a mustache and his voice was cracking. Five years later he enrolled at the University of California , Berkeley and absolutely no one made a big deal about it.  The show is still famous for having been the venue for the nastiest line ever uttered on network television.  Being clean cut and wholesome lads, however, we can’t put it in our newsletter.

• Do you remember Roger Staubach, the Quarterback of the U.S. Naval Academy and the Dallas Cowboys?  After retiring from football, he started a commercial real estate company. A few days ago he sold the company for $613 million.  Go, Roger.
• What have we been doing lately?  Lots of FOCIS Risk Assessments for mortgage bankers, along with those we do for warehouse lenders. These are companies who understand risk management, and who simply want a FOCIS Risk Assessment to see where the potholes are in their organizations. We’ve been busy in Oregon and Oklahoma this past week.  We also have companies who are looking for new warehouse lines, and they want to include a FOCIS Report as part of their application.

The head of secondary for a mid-west client recently did something that embarrassed him deeply, and which has probably hurt his career. A reporter called him on a story about his employer. The secondary guy was very forthcoming, and he said some things that were very uncomplimentary about his employer.   When the story appeared, he was quoted by name. Ouch.  Lesson:  Reporters don’t need to ask permission to quote you by name.  If you are willing to talk but don’t want your name used, the key words you must tell the reporter are that this is off the record and not for attribution.  Reporters are very good at getting information out of people, and they can be very seductive in their approach.  So talk if you want, but if you don’t want your name in the article, make certain to start the conversation telling them that everything you say is “off the record and not for attribution.”

Quote of the week from American Patriot Tom Paine: :  “The human spirit is never finished when it is defeated…it is finished only when it gives up.”

Even if you’ve bombed in your initial efforts at Reverse Mortgages, the demographics are too compelling to not try again. It’s a huge and growing market, and there’s plenty of room for competition. As always, have a plan.

Joe Garrett and Corky Watts  -  Garrett, Watts & Co.