Is this a good time…or a bad time to open a new Home Mortgage branch? Or does economic climate matter?

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We’re all familiar with the headlines regarding the home mortgage market. More people are defaulting on their loans. Credit standards have tightened so the riskier loans are not being made so readily. Several large mortgage companies like Countrywide have been suffering.

In this climate, is now a good time to take advantage of the weakness of certain competitors and try to pick up on sectors of the markets not being fully serviced? Or are the waters just so choppy now that one would be foolish to try to start a new mortgage business in this climate? I am a corporate banker by trade, specializing in 8 to 9 figure loans for middle market & large corporate customers. This is very different than the consumer market for home mortgages, but many of the same credit principles apply in terms of measuring and mitigating risk. If you are experienced in the home mortgage business, I would particularly appreciate reading your feedback on this question, and your view of the current market

2 Comments
  1. Reply
    robert KS LEE.
    April 30, 2011 at 12:22 am

    i think u r better don’t take the risk 4 the time being as u can see the world share markets r slumping.think twice first.

  2. Reply
    Jo B
    April 30, 2011 at 1:13 am

    Only think of opening it if the lenders are low low risk (in which case they are already being serviced). I guess lower Fed rates could improve things.

    My feeling is that US government debt is bad news and I reckon the USD is going to depreciate more and more (massively). With this in sight, the seas are choppy.

    Heard behaviour will be that there are bargains to be had. Certain segments as mentioned are not so correlated. For example, mining companies with 90% of demand from china had their shares take a 20% slide… only to be corrected. It was just investor confidence (or lack of).
    In Australia, many banks are looking at new opportunities or bargains that are available as a result and high risk always brings new opportunities.

    Depends on your appetite for risk.

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